SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
May 23, 1994
Date of Report .........................................................
(Date of earliest event reported)
CHRYSLER FINANCIAL CORPORATION
........................................................................
(Exact name of registrant as specified in its charter)
State of Michigan 1-5966 38-0961430
......................................................................
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File No.) Identification No.)
27777 Franklin Rd., Southfield, Michigan 48034
..............................................
(Address of principal executive offices)
(810) 948-3060
Registrant's telephone number, including area code....................
<PAGE>
Item 5. Other Events.
On May 23, 1994, the registrant entered into a Revolving Credit
Agreement, dated as of May 23, 1994, among the registrant, Chemical
Bank, as Agent, the several commercial banks party thereto as
Co-Agents, and Chemical Securities Inc., as Arranger. Concurrently
with entering into this agreement, the registrant terminated other
prior agreements wherein it had granted security interests in
substantially all of its United States assets securing all of its
indebtedness for borrowed money and certain other indebtedness and
contractual obligations, thus terminating such security interests in
the pledged property.
On May 23, 1994, the registrant entered into a Fourth Amended and
Restated Commitment Transfer Agreement, dated as of May 23, 1994,
among the registrant, the several financial institutions parties
thereto and Chemical Bank, as agent.
On May 23, 1994, the registrant entered into a Guarantee
Agreement, dated as of May 23, 1994, made by the registrant to and in
favor of Guaranteed Parties as defined therein in order to guarantee
the obligations of its subsidiary, Chrysler Credit Canada Ltd., under
a Revolving Credit Agreement dated as of May 23, 1994 among Chrysler
Credit Canada Ltd., Royal Bank of Canada, as agent, Canadian Imperial
Bank of Commerce and Bank of Nova Scotia, as co-agents, and the
Lenders parties thereto.
On May 23, 1994, the registrant entered into a Short Term
Receivables Purchase Agreement, dated as of May 23, 1994, among the
registrant, Chrysler Credit Corporation, U.S. Auto Receivables
Company, American Auto Receivables Company, Chemical Bank, as agent,
the several commercial banks parties thereto, and Chemical Bank Agency
Services Corporation, as Administrative Agent.
On May 23, 1994, American Auto Receivables Company and Chrysler
Credit Corporation, subsidiaries of the registrant, entered into a
Short Term Participation and Servicing Agreement, dated as of May 23,
1994, among American Auto Receivables Company, Chrysler Credit
Corporation, the banks and other financial institutions named as
purchasers therein, Chemical Bank, as Agent, and Chemical Bank Agency
Services Corporation, as Administrative Agent.
On May 23, 1994, U.S. Auto Receivables Company and Chrysler Credit
Corporation, subsidiaries of the registrant, entered into a Short Term
Bank Supplement, dated as of May 23, 1994, among U.S. Auto Receivables
Company, Chrysler Credit Corporation and Manufacturers and Traders
Trust Company, as Trustee, to the Pooling and Servicing Agreement
dated as of May 31, 1991 with respect to CARCO Auto Loan Master Trust
Short Term Bank Series.
On May 23, 1994, the registrant entered into a Long Term
Receivables Purchase Agreement, dated as of May 23, 1994, among the
registrant, Chrysler Credit Corporation, U.S. Auto Receivables
Company, American Auto Receivables Company, the several commercial
banks parties thereto, Chemical Bank, as Agent, and Chemical Bank
Agency Services Corporation, as Administrative Agent.
On May 23, 1994, American Auto Receivables Company and Chrysler
Credit Corporation, subsidiaries of the registrant, entered into a
Long Term Participation and Servicing Agreement, dated as of May 23,
1994, among American Auto Receivables Company, Chrysler Credit
Corporation, the banks and other financial institutions named as
purchasers therein, Chemical Bank, as Agent, and Chemical Bank Agency
Services Corporation, as Administrative Agent.
On May 23, 1994, U.S. Auto Receivables Company and Chrysler Credit
Corporation, subsidiaries of the registrant, entered into a Long Term
Bank Supplement, dated as of May 23, 1994, among U.S. Auto Receivables
Company, Chrysler Credit Corporation and Manufacturers and Traders
Trust Company, as Trustee, to the Pooling and Servicing Agreement,
dated as of May 31, 1991 with respect to CARCO Auto Loan Master Trust
Bank Series.
On May 23, 1994, the registrant entered into a Short-Term
Receivables Purchase Agreement, dated May 23, 1994, among the
registrant, Chrysler Credit Canada Ltd., the chartered banks named
therein as purchasers, and Royal Bank of Canada, as Agent.
On May 23, 1994, Chrysler Credit Canada Ltd., a subsidiary of the
registrant, entered into a Short-Term Retail Purchase and Servicing
Agreement, dated May 23, 1994, among Chrysler Credit Canada Ltd., the
chartered banks named therein as parties thereto, and Royal Bank of
Canada, as Agent.
<PAGE>
On May 23, 1994, the registrant entered into a Long-Term
Receivables Purchase Agreement, dated May 23, 1994, among the
registrant, Chrysler Credit Canada Ltd., the chartered banks named
therein as purchasers, and Royal Bank of Canada, as Agent.
On May 23, 1994, Chrysler Credit Canada Ltd., a subsidiary of the
registrant, entered into a Long-Term Retail Purchase and Servicing
Agreement, dated May 23, 1994 among Chrysler Credit Canada Ltd., the
chartered banks named therein as parties thereto, and Royal Bank of
Canada, as Agent.
On May 23, 1994, Chrysler Credit Canada Ltd., a subsidiary of the
registrant, entered into Bank Series 1994-1 Supplement, dated as of
May 23, 1994, among Chrysler Credit Canada Ltd., Royal Bank of Canada,
as Agent, the several banks parties thereto, and The Royal Trust
Company, as Custodian, to the Master Custodial and Servicing
Agreement, dated as of September 1, 1992.
On May 23, 1994, Chrysler Credit Canada Ltd., a subsidiary of the
registrant, entered into Bank Series 1994-2 Supplement, dated as of
May 23, 1994, among Chrysler Credit Canada Ltd., Royal Bank of Canada,
as Agent, the several banks parties thereto, and The Royal Trust
Company, as Custodian, to the Master Custodial and Servicing
Agreement, dated as of September 1, 1992.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Listed below are the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this Report:
(a) Financial statements of businesses acquired.
None
(b) Pro forma financial information.
None
(c) Exhibits:
10-A Copy of Revolving Credit Agreement, dated as of May
23, 1994, among Chrysler Financial Corporation,
Chemical Bank, as Agent, the several commercial
banks party thereto as Co-Agents, and Chemical
Securities Inc., as Arranger.
10-B Copy of Fourth Amended and Restated Commitment
Transfer Agreement, dated as of May 23, 1994, among
Chrysler Financial Corporation, the several
financial institutions parties thereto and Chemical
Bank, as agent.
10-C Copy of Guarantee Agreement, dated as of May 23,
1994, made by Chrysler Financial Corporation to and
in favor of Guaranteed Parties as defined therein.
10-D Copy of Revolving Credit Agreement, dated as of May
23, 1994, among Chrysler Credit Canada Ltd., Royal
Bank of Canada, as agent, Canadian Imperial Bank of
Commerce and Bank of Nova Scotia, as co-agents, and
the Lenders parties thereto.
10-E Copy of Short Term Receivables Purchase Agreement,
dated as of May 23, 1994, among Chrysler Financial
Corporation, Chrysler Credit Corporation, U.S. Auto
Receivables Company, American Auto Receivables
Company, Chemical Bank, as agent, the several
commercial banks parties thereto, and Chemical Bank
Agency Services Corporation, as Administrative
Agent.
10-F Copy of Short Term Participation and Servicing
Agreement, dated as of May 23, 1994, among American
Auto Receivables Company, Chrysler Credit
Corporation, the banks and other financial
institutions named as purchasers therein, Chemical
Bank, as Agent, and Chemical Bank Agency Services
Corporation, as Administrative Agent.
10-G Copy of Short Term Bank Supplement, dated as of May
23, 1994, among U.S. Auto Receivables Company,
Chrysler Credit Corporation and Manufacturers and
Traders Trust Company, as Trustee, to the Pooling
and Servicing Agreement dated as of May 31, 1991
with respect to CARCO Auto Loan Master Trust Short
Term Bank Series.
10-H Copy of Long Term Receivables Purchase Agreement,
dated as of May 23, 1994, among Chrysler Financial
Corporation, Chrysler Credit Corporation, U.S. Auto
Receivables Company, American Auto Receivables
Company, the several commercial banks parties
thereto, Chemical Bank, as Agent, and Chemical Bank
Agency Services Corporation, as Administrative
Agent.
10-I Copy of Long Term Participation and Servicing
Agreement, dated as of May 23, 1994, among American
Auto Receivables Company, Chrysler Credit
Corporation, the banks and other financial
institutions named as purchasers therein, Chemical
Bank, as Agent, and Chemical Bank Agency Services
Corporation, as Administrative Agent.
10-J Copy of Long Term Bank Supplement, dated as of May
23, 1994, among U.S. Auto Receivables Company,
Chrysler Credit Corporation and Manufacturers and
Traders Trust Company, as Trustee, to the Pooling
and Servicing Agreement, dated as of May 31, 1991
with respect to CARCO Auto Loan Master Trust Bank
Series.
10-K Copy of Short-Term Receivables Purchase Agreement,
dated May 23, 1994, among Chrysler Financial
Corporation, Chrysler Credit Canada Ltd., the
chartered banks named therein as purchasers, and
Royal Bank of Canada, as Agent.
10-L Copy of Short-Term Retail Purchase and Servicing
Agreement, dated May 23, 1994, among Chrysler Credit
Canada Ltd., the chartered banks named therein as
parties thereto, and Royal Bank of Canada, as Agent.
10-M Copy of Long-Term Receivables Purchase Agreement,
dated May 23, 1994 among Chrysler Financial
Corporation, Chrysler Credit Canada Ltd., the
chartered banks named therein as purchasers, and
Royal Bank of Canada, as Agent.
10-N Copy of Long-Term Retail Purchase and Servicing
Agreement, dated May 23, 1994, among Chrysler Credit
Canada Ltd., the chartered banks named therein as
parties thereto, and Royal Bank of Canada, as Agent.
10-O Copy of Bank Series 1994-1 Supplement, dated as of
May 23, 1994, among Chrysler Credit Canada Ltd.,
Royal Bank of Canada, as Agent, the several banks
parties thereto, and The Royal Trust Company, as
Custodian, to the Master Custodial and Servicing
Agreement, dated as of September 1, 1992.
10-P Copy of Bank Series 1994-2 Supplement, dated as of
May 23, 1994, among Chrysler Credit Canada Ltd.,
Royal Bank of Canada, as Agent, the several banks
parties thereto, and The Royal Trust Company, as
Custodian, to the Master Custodial and Servicing
Agreement, dated as of September 1, 1992.
<PAGE>
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 hereunto duly authorized.
CHRYSLER FINANCIAL CORPORATION
Date: May 23, 1994 By: /s/Robert A. Link
----------------------------
Robert A. Link
Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
10-A Copy of Revolving Credit Agreement, dated as of May 23, 1994,
among Chrysler Financial Corporation, Chemical Bank, as
Agent, the several commercial banks party thereto as Co-
Agents, and Chemical Securities Inc., as Arranger.
10-B Copy of Fourth Amended and Restated Commitment Transfer
Agreement, dated as of May 23, 1994, among Chrysler Financial
Corporation, the several financial institutions parties
thereto and Chemical Bank, as agent.
10-C Copy of Guarantee Agreement, dated as of May 23, 1994, made
by Chrysler Financial Corporation to and in favor of
Guaranteed Parties as defined therein.
10-D Copy of Revolving Credit Agreement dated as of May 23, 1994,
among Chrysler Credit Canada Ltd., Royal Bank of Canada, as
agent, Canadian Imperial Bank of Commerce and Bank of Nova
Scotia, as co-agents, and the Lenders parties thereto.
10-E Copy of Short Term Receivables Purchase Agreement, dated as
of May 23, 1994, among Chrysler Financial Corporation,
Chrysler Credit Corporation, U.S. Auto Receivables Company,
American Auto Receivables Company, Chemical Bank, as agent,
the several commercial banks parties thereto, and Chemical
Bank Agency Services Corporation, as Administrative Agent.
10-F Copy of Short Term Participation and Servicing Agreement,
dated as of May 23, 1994, among American Auto Receivables
Company, Chrysler Credit Corporation, the banks and other
financial institutions named as purchasers therein, Chemical
Bank, as Agent, and Chemical Bank Agency Services
Corporation, as Administrative Agent.
10-G Copy of Short Term Bank Supplement, dated as of May 23, 1994,
among U.S. Auto Receivables Company, Chrysler Credit
Corporation and Manufacturers and Traders Trust Company, as
Trustee, to the Pooling and Servicing Agreement dated as of
May 31, 1991 with respect to CARCO Auto Loan Master Trust
Short Term Bank Series.
10-H Copy of Long Term Receivables Purchase Agreement, dated as of
May 23, 1994, among Chrysler Financial Corporation, Chrysler
Credit Corporation, U.S. Auto Receivables Company, American
Auto Receivables Company, the several commercial banks
parties thereto, Chemical Bank, as Agent, and Chemical Bank
Agency Services Corporation, as Administrative Agent.
10-I Copy of Long Term Participation and Servicing Agreement,
dated as of May 23, 1994, among American Auto Receivables
Company, Chrysler Credit Corporation, the banks and other
financial institutions named as purchasers therein, Chemical
Bank, as Agent, and Chemical Bank Agency Services
Corporation, as Administrative Agent.
10-J Copy of Long Term Bank Supplement, dated as of May 23, 1994,
among U.S. Auto Receivables Company, Chrysler Credit
Corporation and Manufacturers and Traders Trust Company, as
Trustee, to the Pooling and Servicing Agreement, dated as of
May 31, 1991 with respect to CARCO Auto Loan Master Trust
Bank Series.
10-K Copy of Short-Term Receivables Purchase Agreement, dated May
23, 1994, among Chrysler Financial Corporation, Chrysler
Credit Canada Ltd., the chartered banks named therein as
purchasers, and Royal Bank of Canada, as Agent.
10-L Copy of Short-Term Retail Purchase and Servicing Agreement,
dated May 23, 1994, among Chrysler Credit Canada Ltd., the
chartered banks named therein as parties thereto, and Royal
Bank of Canada, as Agent.
10-M Copy of Long-Term Receivables Purchase Agreement, dated May
23, 1994, among Chrysler Financial Corporation, Chrysler
Credit Canada Ltd., the chartered banks named therein as
purchasers, and Royal Bank of Canada, as Agent.
10-N Copy of Long-Term Retail Purchase and Servicing Agreement,
dated May 23, 1994, among Chrysler Credit Canada Ltd., the
chartered banks named therein as parties thereto, and Royal
Bank of Canada, as Agent.
10-O Copy of Bank Series 1994-1 Supplement, dated as of May 23,
1994, among Chrysler Credit Canada Ltd., Royal Bank of
Canada, as Agent, the several banks parties thereto, and The
Royal Trust Company, as Custodian, to the Master Custodial
and Servicing Agreement, dated as of September 1, 1992.
10-P Copy of Bank Series 1994-2 Supplement, dated as of May 23,
1994, among Chrysler Credit Canada Ltd., Royal Bank of
Canada, as Agent, the several banks parties thereto, and The
Royal Trust Company, as Custodian, to the Master Custodial
and Servicing Agreement, dated as of September 1, 1992.
Exhibit 10-A
CONFORMED COPY
==============================================================================
$4,580,000,000
REVOLVING CREDIT AGREEMENT
Dated as of May 23, 1994
CHRYSLER FINANCIAL CORPORATION,
as BORROWER
and
CHEMICAL BANK,
as AGENT
and
ABN AMRO BANK, N.V., BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
THE BANK OF NEW YORK, THE BANK OF NOVA SCOTIA,
BANQUE NATIONALE DE PARIS, CANADIAN IMPERIAL BANK OF COMMERCE,
THE CHASE MANHATTAN BANK, N.A., COMERICA BANK, CREDIT LYONNAIS,
CREDIT SUISSE, THE FIRST NATIONAL BANK OF CHICAGO,
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
NATIONAL WESTMINSTER BANK PLC, NATIONSBANK OF NORTH CAROLINA, N.A.,
ROYAL BANK OF CANADA, SOCIETE GENERALE, SWISS BANK CORPORATION,
THE TORONTO-DOMINION BANK and UNION BANK OF SWITZERLAND,
as CO-AGENTS
and
CHEMICAL SECURITIES INC.,
as ARRANGER
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . 15
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . 15
2.1 The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . 16
2.3 Liquidity Facility Loans. . . . . . . . . . . . . . . . . . . . . 16
2.4 Repayment of Revolving Credit Loans and Liquidity Facility Loans. 17
2.5 Lending Procedures. . . . . . . . . . . . . . . . . . . . . . . . 18
2.6 Evidence of Debt. . . . . . . . . . . . . . . . . . . . . . . . . 18
2.7 Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.8 Termination or Reduction of Commitments . . . . . . . . . . . . . 19
2.9 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . 19
2.10 Minimum Amount of Eurodollar Tranches . . . . . . . . . . . . . . 20
2.11 Interest Rate and Payment Dates . . . . . . . . . . . . . . . . . 20
2.12 Conversion and Continuation Options . . . . . . . . . . . . . . . 21
2.13 Computation of Interest and Fees. . . . . . . . . . . . . . . . . 21
2.14 Inability to Determine Eurodollar Rate. . . . . . . . . . . . . . 22
2.15 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . 22
2.16 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.17 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.18 Transfer of Eurodollar Loans. . . . . . . . . . . . . . . . . . . 25
2.19 Changes in Capital Requirements . . . . . . . . . . . . . . . . . 25
2.20 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.21 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.22 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.23 Replacement of Banks. . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 30
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.3 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . 30
3.4 Corporate Authorization; No Violation . . . . . . . . . . . . . . 30
3.5 Government Authorization. . . . . . . . . . . . . . . . . . . . . 31
3.6 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . 31
3.7 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . 31
3.8 No Material Litigation. . . . . . . . . . . . . . . . . . . . . . 31
3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.11 Investment Company Act; Other Regulations . . . . . . . . . . . . 32
3.12 Ownership of Property; Liens. . . . . . . . . . . . . . . . . . . 32
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 32
4.1 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . 32
4.2 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 34
5.1 Financial Statements, etc.. . . . . . . . . . . . . . . . . . . . 34
5.2 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . 35
5.3 Maintenance of Existence and Property . . . . . . . . . . . . . . 35
5.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 36
6.1 Limitation on Indebtedness and Guaranties . . . . . . . . . . . . 36
6.2 Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . 37
6.3 Fixed Charges Coverage Ratio. . . . . . . . . . . . . . . . . . . 37
6.4 Limitation on Transactions with Affiliates. . . . . . . . . . . . 38
6.5 Limitation on Amendments to Income Maintenance Agreement. . . . . 38
6.6 Limitation on Fundamental Change. . . . . . . . . . . . . . . . . 38
6.7 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . 39
6.8 Multiemployer Plans; etc. . . . . . . . . . . . . . . . . . . . . 41
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . 44
8.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . 44
8.4 Reliance by Agent and CASC. . . . . . . . . . . . . . . . . . . . 44
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 45
8.6 Non-Reliance on Agent, Other Banks and CASC. . . . . . . . . . . 45
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.8 Agent in its Individual Capacity. . . . . . . . . . . . . . . . . 46
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.10 The Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 47
9.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 47
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.3 Clearing Accounts . . . . . . . . . . . . . . . . . . . . . . . . 48
9.4 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . 49
9.5 Survival of Representations and Warranties. . . . . . . . . . . . 49
9.6 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . 49
9.7 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 50
9.8 Right of Set-off. . . . . . . . . . . . . . . . . . . . . . . . . 51
9.9 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.10 New Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.11 Increase in Commitments . . . . . . . . . . . . . . . . . . . . . 53
9.12 Changing Designations of Liquidity Facility Banks . . . . . . . . 53
9.13 Tax Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.16 Submission to Jurisdiction; Waivers . . . . . . . . . . . . . . . 54
9.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.18 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . 54
SCHEDULE
SCHEDULE I Commitments
EXHIBITS
EXHIBIT A Form of Addendum
EXHIBIT B Form of Closing Certificate
EXHIBIT C-1 Form of Opinion of Simpson Thacher & Bartlett
EXHIBIT C-2 Form of Opinion of General Counsel of the Company
EXHIBIT D-1 Form of Assignment and Acceptance
EXHIBIT D-2 Form of New Bank Supplement
EXHIBIT D-3 Form of Commitment Increase Supplement
EXHIBIT E Form of Revolving Credit Loan/Liquidity Facility Loan
Promissory Note
EXHIBIT F Capital Note Subordination Terms
<PAGE>
REVOLVING CREDIT AGREEMENT dated as of May 23, 1994 among
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the "Company"), the
several commercial banks from time to time parties to this Agreement
(collectively, the "Banks"; individually, a "Bank"), ABN AMRO BANK, N.V.,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, THE BANK OF NEW
YORK, THE BANK OF NOVA SCOTIA, BANQUE NATIONALE DE PARIS, CANADIAN IMPERIAL
BANK OF COMMERCE, THE CHASE MANHATTAN BANK, N.A., COMERICA BANK, CREDIT
LYONNAIS, CREDIT SUISSE, THE FIRST NATIONAL BANK OF CHICAGO, THE LONG-TERM
CREDIT BANK OF JAPAN, LIMITED, MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
NATIONAL WESTMINSTER BANK PLC, NATIONSBANK OF NORTH CAROLINA, N.A., ROYAL
BANK OF CANADA, SOCIETE GENERALE, SWISS BANK CORPORATION, THE TORONTO-
DOMINION BANK and UNION BANK OF SWITZERLAND, as Co-Agents (in such
capacity, the "Co-Agents"), CHEMICAL SECURITIES INC. ("CSI"), as arranger
for the Banks hereunder, and CHEMICAL BANK, a New York banking corporation
("Chemical"), as agent for the Banks hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms defined
in the caption to this Agreement shall have the meanings set forth therein,
and the following terms have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Accumulated Funding Deficiency" shall mean any "accumulated
funding deficiency" as defined in Section 302 of ERISA.
"ACH" shall mean an Automated Clearing House.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit A, by which a Bank becomes a party to this Agreement.
"Affected Bank" shall have the meaning set forth in subsection
2.17(b).
"Affiliate" of any Person, shall mean any other Person that,
directly or indirectly, controls or is controlled by or is under
common control with such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled
by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" shall mean Chemical Bank and CSI, in their respective
capacities as agent for the Banks under this Agreement and arranger of
the Commitments, together with any of their respective successors.
"Agreement" shall mean this Credit Agreement, as the same may be
amended, modified or supplemented from time to time.
"Applicable Base Rate Margin" shall mean, with respect to each
Base Rate Loan at any date, the applicable percentage per annum set
forth below based upon the Status and Utilization on such date
(provided that if the Commitments have been terminated prior to such
date, the Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I, II, III or IV Level V
Status Status
<S> <C> <C>
If Utilization is less than or
equal to 33-1/3%: 0.0000% 0.1250%
If Utilization is greater than 33-1/3%: 0.0000% 0.2500%
</TABLE>
"Applicable Eurodollar Margin" shall mean, with respect to each
Eurodollar Loan at any date, the applicable percentage per annum set
forth below based upon the Status and Utilization on such date
(provided that if the Commitments have been terminated prior to such
date, the Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
Status Status Status Status Status
<S> <C> <C> <C> <C> <C>
If Utilization
is less than
or equal to
33-1/3%: 0.3125% 0.4000% 0.4000% 0.5000% 0.7500%
If Utilization
is greater
than 33-1/3%: 0.4375% 0.5250% 0.5250% 0.6250% 0.8750%
</TABLE>
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most recently
estimated by the Agent as the then current net annual assessment rate
that will be employed in determining amounts payable by Chemical to
the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or any successor) of time deposits made
in Dollars at Chemical's domestic offices.
"Available Commitment" shall mean, as to any Bank, at a
particular time, an amount equal to the excess, if any, of (a) the
amount of such Bank's Commitment at such time over (b) the aggregate
unpaid principal amount at such time of all Revolving Credit Loans and
Liquidity Facility Loans made by such Bank.
"Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Effective Federal Funds
Rate in effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chemical as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced.
"Base CD Rate" shall mean the sum of (a) the product of (i) the Three-
Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be
a Business Day, the next preceding Business Day) by the Federal
Reserve Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Federal Reserve Board, be published in Federal
Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported for such day or such
next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00 a.m.,
New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Agent from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. If for any reason the Agent shall
have determined (which determination shall be conclusive absent
clearly demonstrable error) that it is unable to ascertain the Base CD
Rate or the Effective Federal Funds Rate or both for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms thereof, the Base Rate shall
be determined without regard to clause (b) or (c), or both, of the
first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate, the Three-
Month Secondary CD Rate or the Effective Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Effective Federal Funds Rate,
respectively.
"Base Rate Loans" shall mean Loans hereunder at such time as they
are made and/or being maintained at a rate of interest based upon the
Base Rate.
"Board" shall mean the Board of Directors of the Company, the
Executive Committee thereof or any other committee consisting of two
or more directors of the Company designated by the Board of Directors
having authority to exercise, when the Board of Directors is not in
session, the powers of the Board of Directors (subject to any
designated limitations) in the management of the business and affairs
of the Company.
"Borrowing Date" shall mean any Business Day specified in a
notice pursuant to subsection 2.2 or 2.3 as a date on which the
Company requests Loans to be made hereunder.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close, except that, when used in connection with a
Eurodollar Loan with respect to which the Eurodollar Rate is
determined based upon the Telerate screen in accordance with the
definition of Eurodollar Rate, "Business Day" shall mean any Business
Day on which dealings in foreign currencies and exchange between banks
may be carried on in London, England and New York, New York.
"Canadian Corporation" shall mean any corporation which (a) is
organized under the laws of Canada or any province of Canada and (b)
conducts substantially all of its business within Canada.
"Capital Base" shall mean, at any date, the sum of (a) the lesser
of (i) Subordinated Debt and (ii) 100% of Consolidated Tangible Net
Worth plus (b) Consolidated Tangible Net Worth.
"Capital Notes" shall mean any notes made by the Company in favor
of Chrysler that are issued for cash at par and are subordinated on
the terms set forth in Exhibit F in right of payment to the Senior
Debt.
"CASC" shall mean Chemical Bank Agency Services Corporation, a
Delaware corporation (and any successor).
"Chrysler" shall mean Chrysler Corporation, a Delaware
corporation.
"Chrysler Capital" shall mean Chrysler Capital Corporation, a
Delaware corporation.
"Chrysler First" shall mean Chrysler First Inc., a Pennsylvania
corporation.
"Clearing Account" shall mean, as to any Bank, the bank account
designated in its Addendum, or such other bank account as such Bank
shall designate in writing to the Agent from time to time, provided
that such other bank account shall be maintained at the office of an
ACH member.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Commercial Bank" shall mean any Person (a) licensed to engage in
commercial banking business and (b) which on the date it becomes a
Bank hereunder (i) is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes and (ii) is entitled to an exemption from, or is
not subject to, United States backup withholding tax.
"Commitment" shall mean, as to any Bank, its obligation to make
Revolving Credit Loans and, in the case of Liquidity Facility Banks,
Liquidity Facility Loans to the Company hereunder in an aggregate
principal amount at any one time outstanding not to exceed the amount
set forth opposite such Bank's name on Schedule I, as such amount may
be reduced or increased from time to time as provided herein;
collectively, as to all the Banks, the "Commitments".
"Commitment Percentage" shall mean, as to any Bank at any time,
the percentage of the aggregate Commitments then constituted by such
Bank's Commitment.
"Commitment Period" shall mean, as to the Commitment of any Bank,
the period from and including the Effective Date (or, in the case of
any New Bank, from the date that such New Bank becomes party to this
Agreement as provided in subsection 9.10) to but not including the
Termination Date or such earlier date as the Commitments shall
terminate as provided herein.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Company and is treated as a single employer under
Section 414 of the Code.
"Consolidated Tangible Net Worth" shall mean, at any date, the
amount which would appear in accordance with GAAP on a consolidated
balance sheet of the Company and its Subsidiaries opposite the heading
"total shareholders' investment" (or any similar item) plus the
aggregate unpaid principal amount of the Capital Notes, less the
aggregate net book value (after deducting any reserves applicable
thereto) of all items of the following character which are included in
the consolidated assets of the Company and its Subsidiaries:
(a) franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill,
experimental or organizational expense, and other like
intangibles;
(b) deferred charges and prepaid expenses (other than
prepaid interest, insurance and taxes);
(c) unamortized debt discount and expense;
(d) assets which are pledged or deposited as security for or
for the purpose of paying any obligations, contingent or
otherwise, which are not included in consolidated liabilities;
and
(e) amounts in respect of capital stock, promissory notes
and other securities issued by the Company or a Subsidiary and
held in its treasury.
"Contractual Obligation" shall mean, as to any Person, any
enforceable provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party
or by which it or any of its property is bound.
"D&P" shall mean Duff & Phelps Credit Rating Company and its
successors.
"Default" shall mean any of the events specified in Section 7,
whether or not any requirement for the giving of notice, lapse of
time, or both, or the happening of any other condition, has been
satisfied.
"Dollars" or "$" shall mean lawful currency of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary other than a
Foreign Subsidiary.
"Effective Date" shall mean the date on which the conditions
specified in subsection 4.1 shall be satisfied.
"Effective Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions
between members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average quotations for the day
of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, in the case of any Eurodollar Loan,
with respect to each day during each Interest Period (other than any
seven-day Interest Period) pertaining to such Eurodollar Loan, the
rate of interest determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period, provided, that in the event
that such rate does not appear on Page 3750 of the Telerate Service
(or otherwise on such service), the "Eurodollar Rate" shall be
determined by reference to such other publicly available service for
displaying eurodollar rates as may be agreed upon by the Agent and the
Company. In the absence of such agreement, and in the case of any
seven-day Interest Period pertaining to such Eurodollar Loan, the
"Eurodollar Rate" shall instead be the rate per annum equal to the
average (rounded upward, if necessary, to the nearest 1/100th of 1%)
of the respective rates notified to the Agent by each of the Reference
Banks as the rate at which such Reference Bank is offered Dollar
deposits at or about 10:00 A.M., New York City time, two Business Days
prior to the beginning of the relevant Interest Period, in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Tranche" shall mean and be a collective reference to
Eurodollar Loans having the same Interest Period, whether or not
originally made on the same day.
"Event of Default" shall mean any of the events specified in
Section 7, provided that any requirement for the giving of notice, the
lapse of time, or both, or the happening of any other condition, has
been satisfied.
"Excess Utilization Period" shall mean any Utilization Period
with respect to which the Utilization exceeds 33-1/3%.
"Existing Credit Agreement" shall mean the Combined Amended and
Restated Revolving Credit Agreement dated as of July 29, 1992 among
the Company, the banks parties thereto and Chemical Bank, as Agent.
"Facility Fee Rate" shall mean, for any day, the rate per
annum set forth below opposite the Status in effect on such day:
<TABLE>
<CAPTION>
Facility Fee
Status Rate
<S> <C>
Level I Status 0.1875%
Level II Status 0.2000%
Level III Status 0.2250%
Level IV Status 0.2500%
Level V Status 0.3750%
</TABLE>
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System of the United States.
"Final Date" shall have the meaning set forth in subsection 2.7.
"Finance Business" shall mean (a) the small loan, personal
finance, consumer finance or installment credit business (including
the business of making collateral loans secured by credit obligations
or personal property), (b) the sales finance business and the business
of purchasing and selling notes and accounts receivable (whether or
not repayable in installments) and interests therein, (c) the
commercial financing and factoring business as generally conducted,
including the leasing of tangible personal property, and (d) any
business (including, without limitation, securitization and other
receivables-based transactions) related to or conducted in connection
with any business of the character referred to in the foregoing
clauses (a), (b) and (c) other than insurance underwriting.
"Finance-Related Insurance Business" shall mean the business of
(a) insuring articles and merchandise the sale or leasing of which is
financed in the ordinary course of the Finance Business, and (b)
insuring the lives of individuals who are liable for the payment of
the amounts owing on such sales or leases and writing accident and
health insurance on such individuals; provided, however, that Finance-
Related Insurance Business shall also include other insurance business
that is not described in (a) or (b) above to the extent that such
insurance business does not produce at any time aggregate premiums
written (net of reinsurance ceded) by all Subsidiaries in an amount
greater than 50% of the aggregate amount of all premiums written (net
of reinsurance ceded) at such time in all of the insurance business of
such Subsidiaries.
"Finance Subsidiary" shall mean any Domestic Subsidiary that is
engaged primarily in the Finance Business.
"Fitch" shall mean Fitch Investors Service, Inc. and its
successors.
"Foreign Subsidiary" shall mean any Subsidiary that (a) is
organized under the laws of any jurisdiction outside the United States
of America, Puerto Rico and Canada, or (b) conducts the major portion
of its business outside the United States of America, Puerto Rico and
Canada.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time, except that for
the purposes of determining compliance with the covenants set forth in
Section 6, "GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on December 31, 1993 applied
consistently with those used in compiling the financial statements
included in the 1993 Annual Report.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranty" shall mean, as to any Person, (a) any guaranty by such
Person of any indebtedness or other obligation of any other Person
(other than the Company or any Subsidiary), or any assurance with
respect to the financial condition of such other Person (other than
the Company or any Subsidiary), including, without limitation, any
purchase or repurchase agreement, any indemnity or any keepwell, take-
or-pay, through-put or other arrangement having the effect of assuring
or holding harmless any third Person against loss with respect to any
obligation of such other Person (other than the Company or any
Subsidiary) and (b) the face amount of all letters of credit and
acceptances issued for the account of such Person and, without
duplication, all drafts drawn thereunder. For the purposes of this
definition and subsection 6.1, the principal amount of obligations
entitled to the benefits of any Guaranty relating to any transaction
involving the origination of Consumer Finance Receivables or Wholesale
Automobile Receivables by the Company or any Subsidiary for the
account of, or the sale of Consumer Finance Receivables or Wholesale
Automobile Receivables originated by the Company or any Subsidiary to,
any other Person, shall, to the extent such Guaranty is attributable
to the retention by the Company or such Subsidiary of credit risks
relating to such Receivables, be deemed to be limited to the Reserve
Percentage of the outstanding balance of such Receivables as of the
relevant date of determination (the "Reserve Amount"), provided, that
if the maximum amount of recourse to the Company and its Subsidiaries
pursuant to any such Guaranty in respect of such credit risks shall
have been agreed to in writing, the principal amount of such
obligations shall instead be deemed to equal the lesser of (i) 100% of
such maximum amount and (ii) the relevant Reserve Amount.
As used in this definition:
"Consumer Finance Receivables" shall mean Receivables
arising out of the retail sale or lease of passenger automobiles,
light-duty trucks or recreational vehicles and originated in
accordance with the customary credit and collection policies of
the Company and its Subsidiaries with respect to Receivables of
such type generally.
"Wholesale Automobile Receivables" shall mean Receivables
arising out of extensions of credit by the Company and its
Subsidiaries to automobile dealers for the purchase of new
passenger automobiles, light-duty trucks and recreational
vehicles (including such extensions resulting from the purchase
by the Company and its Subsidiaries from Chrysler or any of its
Subsidiaries of receivables from automobile dealers representing
the deferred payment of the purchase price of new passenger
automobiles, light-duty trucks and recreational vehicles
purchased by such dealers from Chrysler or such Subsidiary) and
originated in accordance with the customary credit and collection
policies of the Company and its Subsidiaries with respect to
Receivables of such type generally.
"Reserve Percentage" shall mean, at any date of
determination, (a) with respect to any Consumer Finance
Receivables, an amount equal to five times the average credit
loss experience (expressed as a percentage) of the Company and
its Subsidiaries determined in accordance with GAAP with respect
to Receivables of such type for the period of eight consecutive
fiscal quarters ending on the last day of the most recent fiscal
period as to which financial statements have been delivered (or
are required to have been delivered) pursuant to Section
5.1(a)(i) or (ii), provided, that in no event shall the Reserve
Percentage with respect to any Consumer Finance Receivables be
less than 9.75% and (b) with respect to any Wholesale Automobile
Receivables, an amount equal to five times the average credit
loss experience (expressed as a percentage) of the Company and
its Subsidiaries determined in accordance with GAAP with respect
to Receivables of such type for the period of eight consecutive
fiscal quarters ending on the last day of the most recent fiscal
period as to which financial statements have been delivered (or
are required to have been delivered) pursuant to Section
5.1(a)(i) or (ii), provided, that in no event shall the Reserve
Percentage with respect to any Wholesale Automobile Receivables
be less than 10.50%.
"Income Maintenance Agreement" shall mean the Income Maintenance
Agreement, dated as of December 20, 1968, as amended on April 19,
1971, May 29, 1973, July 1, 1975, June 4, 1976 and March 27, 1986,
between Chrysler and the Company, as the same may be further amended,
modified or supplemented from time to time in accordance with
subsection 6.5.
"Indebtedness" shall mean, as applied to any Person at any date,
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services which would appear on a
consolidated balance sheet of such Person (or, in the case of the
Company and its Subsidiaries, the Company) prepared in accordance with
GAAP, (b) obligations of such Person under leases which appear as
capital leases on a consolidated balance sheet of such Person prepared
in accordance with GAAP and (c) any withdrawal obligation of such
Person or any Commonly Controlled Entity thereof to a Multiemployer
Plan.
"Interest Period" shall mean with respect to any Eurodollar
Tranche:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Tranche and ending seven days or one, two, three or
six months thereafter, as selected by the Company in its notice
of borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar
Tranche and ending seven days or one, two, three or six months
thereafter, as selected by the Company by irrevocable notice to
the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto (or, if
no such period is specified, ending one month thereafter);
provided that, the foregoing provisions are subject to the following:
(A) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day;
(B) no Interest Period may be selected by the Company
if such Interest Period would end after the Termination
Date; and
(C) any Interest Period of at least one month's
duration that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
relevant calendar month.
"Level" shall mean any of Level I, Level II, Level III, Level IV
or Level V.
"Level I" shall mean any of the following long-term senior
unsecured debt ratings: A- or better by S&P, A3 or better by Moody's,
A- or better by D&P or A- or better by Fitch.
"Level II" shall mean any of the following long-term senior
unsecured debt ratings: BBB+ by S&P, Baa1 by Moody's, BBB+ by D&P or
BBB+ by Fitch.
"Level III" shall mean any of the following long-term senior
unsecured debt ratings: BBB by S&P, Baa2 by Moody's, BBB by D&P or
BBB by Fitch.
"Level IV" shall mean any of the following long-term senior
unsecured debt ratings: BBB- by S&P, Baa3 by Moody's, BBB- by D&P or
BBB- by Fitch.
"Level V" shall mean any of the following long-term senior
unsecured debt ratings: BB+ or lower (or unrated) by S&P, Ba1 or
lower (or unrated) by Moody's, BB+ or lower (or unrated) by D&P or BB+
or lower (or unrated) by Fitch.
"Lien" shall mean, with respect to any property of any Person,
any mortgage, pledge, hypothecation, encumbrance, lien (statutory or
other), charge or other security interest of any kind in or with
respect to such property (including, without limitation, any
conditional sale or other title retention agreement, and any financing
lease under which such Person is lessee having substantially the same
economic effects as any of the foregoing). It is understood that any
filings, instruments or other documents evidencing the Liens created
pursuant to the Existing Credit Agreement and the Trust Agreement
referred to therein shall not be deemed to constitute or create
"Liens" for the purposes of this Agreement.
"Liquidity Facility Bank" shall mean each of the Banks that have
agreed to make Liquidity Facility Loans hereunder as indicated on
Schedule I and each other Bank that shall hereafter be designated as a
Liquidity Facility Bank in accordance with the provisions of
subsection 9.7 or 9.12.
"Liquidity Facility Loan" shall have the meaning set forth in
subsection 2.3(a).
"Loan" shall mean any Revolving Credit Loan or Liquidity Facility
Loan made by any Bank hereunder.
"Material Asset Disposition" shall have the meaning assigned in
subsection 6.6.
"Maximum Disposition Amount" at any date of determination shall
mean the greater of (a) $500,000,000 and (b) an amount equal to 5% of
the book value of the consolidated assets of the Company and its
Subsidiaries as of the last day of the most recent fiscal period as to
which financial statements have been delivered (or are required to
have been delivered) to the Agent pursuant to subsection 5.1(a).
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"New Bank" shall have the meaning set forth in subsection 9.10.
"1993 Annual Report" shall mean the Company's annual report to
stockholders for the fiscal year ended December 31, 1993.
"Non-U.S. Subsidiary" shall mean each Subsidiary other than a
U.S. Subsidiary.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any
successor corporation.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a
trust, an unincorporated association, a joint venture or other entity
or a government or any agency or political subdivision thereof.
"Plan" shall mean any pension plan which is covered by Title IV
of ERISA and in respect of which the Company or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) of ERISA.
"Prohibited Transaction" shall mean any "prohibited transaction"
as defined in Section 406 of ERISA or Section 4975 of the Code.
"Rating Agencies" shall mean the collective reference to D&P,
Fitch, Moody's and S&P.
"Real Estate Business" shall mean the acquisition, development,
leasing, financing, management, maintenance and disposition of real
property, including, without limitation, automotive dealership
facilities and dealership site control arrangements.
"Receivables" shall mean, at any date, any and all amounts owing
to the Company and its Subsidiaries on account of receivables arising
out of their conduct of their business.
"Reference Banks" shall mean Chemical, NBD Bank, N.A., Royal Bank
of Canada and Swiss Bank Corporation; provided, that, for the purposes
of determining the Eurodollar Rate with respect to any seven-day
Interest Period, Chemical shall be the sole Reference Bank.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Required Banks" shall mean, at any date, Banks having at least
51% of the aggregate amount of the Commitments at such date or, if the
Commitments have been terminated, the holders of at least 51% of the
outstanding principal amount of the Loans hereunder.
"Requirement of Law" shall mean, as to any Person, the
Certificate of Incorporation and By-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of
its property is subject.
"Responsible Officer" shall mean, at any particular time, the
Chairman of the Board, the President, the chief financial officer, the
Vice President-Corporate Finance and Development, the Treasurer or the
Controller of the Company.
"Revolving Credit Loans" shall have the meaning set forth in
subsection 2.1(a).
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw Hill, and its successors.
"Senior Debt" shall mean, at any date, all Indebtedness of the
Company except Subordinated Debt and Capital Notes.
"Significant Subsidiary" shall mean, at the time of any
determination thereof, (a) any Finance Subsidiary and (b) any other
Subsidiary of the Company the assets of which constitute at least 5%
of the consolidated assets of the Company and its Subsidiaries as
stated on the consolidated financial statements of the Company and its
Subsidiaries for the most recently ended fiscal quarter of the
Company, provided, that the term "Significant Subsidiary" shall not
include any Special Purpose Subsidiary.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan.
"Special Purpose Subsidiary" shall mean any Subsidiary created
for the sole purpose of purchasing assets from the Company or any
Finance Subsidiary with the intention and for the purpose of using
such assets in a securitization transaction.
"Status" shall mean, as to the Company, the existence of Level I
Status, Level II Status, Level III Status, Level IV Status or Level V
Status, as the case may be. For the purposes of this definition,
"Status" will be set at the lowest Level assigned to the Company by
any Rating Agency, unless only one Rating Agency has assigned such
Level to the Company, in which case the Company's Status will be set
at the second lowest Level assigned to the Company by any Rating
Agency.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum
applicable reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established
by the Federal Reserve Board and any other banking authority to which
Chemical is subject with respect to the Base CD Rate (as such term is
used in the definition of "Base Rate"), for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities
approximately equal to three months. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"Subordinated Debt" shall mean, at any date, all Indebtedness of
the Company which is subordinated to Senior Debt at least to the
extent that its 6-7/8% Subordinated Notes due 1987 were subordinated
to Senior Debt as of April 9, 1980, excluding Capital Notes.
"Subsidiary" shall mean any corporation of which the Company or
one or more Subsidiaries or the Company and one or more Subsidiaries
shall at the time own shares of any class or classes (however
designated) having voting power for the election of at least a
majority of the members of the board of directors (or other governing
body) of such corporation.
"Termination Date" shall mean May 22, 1998, or, if such day is
not a Business Day, the next preceding Business Day.
"Type" shall mean as to any Revolving Credit Loan, its nature as
a Base Rate Loan or a Eurodollar Loan.
"Unrefunded Liquidity Facility Loans" shall have the meaning set
forth in subsection 2.3(c).
"U.S. Subsidiary" shall mean each Domestic Subsidiary which is
not a Canadian Corporation.
"Utilization" shall mean, for any Utilization Period, the
percentage equivalent of a fraction (a) the numerator of which is the
average daily principal amount of Loans outstanding during such
Utilization Period and (b) the denominator of which is the average
daily amount of the aggregate Commitments of all Banks during such
Utilization Period.
"Utilization Period" shall mean (a) each fiscal quarter of the
Company and (b) any portion of a fiscal quarter of the Company ending
on the Final Date.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto, accounting terms relating to the Company and
its Subsidiaries not defined in subsection 1.1, and accounting terms partly
defined in subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "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, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 The Commitments. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Company from time to time during the
Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of its Commitment. During the
Commitment Period, the Company may use such Commitment by borrowing,
prepaying or repaying the Revolving Credit Loans of such Bank, in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof. Notwithstanding anything to the contrary contained in this
Agreement, in no event may Revolving Credit Loans be borrowed under this
subsection 2.1 if, after giving effect thereto and the application of the
proceeds thereof, the aggregate principal amount of Revolving Credit Loans
and Liquidity Facility Loans made by any Bank then outstanding would exceed
such Bank's Commitment.
(b) Revolving Credit Loans may be Base Rate Loans or Eurodollar
Loans, or part Base Rate Loans and part Eurodollar Loans, as determined by
the Company and notified to the Agent in accordance with subsection 2.2,
provided that no Eurodollar Loans shall be made after the day which is
seven days prior to the Termination Date.
2.2 Procedure for Borrowing. The Company may borrow under
subsection 2.1 during the Commitment Period on any Business Day, provided
that the Company shall give the Agent irrevocable notice (which notice must
be received by the Agent prior to 10:00 A.M., New York City time, (i) three
Business Days prior to the requested Borrowing Date, if all or any part of
the requested Revolving Credit Loans are to be initially Eurodollar Loans,
and (ii) one Business Day prior to the requested Borrowing Date, otherwise)
specifying (A) the amount to be borrowed, (B) the requested Borrowing Date,
(C) whether the borrowing is to be a Eurodollar Loan or a Base Rate Loan or
a combination thereof, and (D) if such borrowing is to be entirely or
partly a Eurodollar Loan, the length of the Interest Period for such
Eurodollar Loan. Upon receipt of such notice, the Agent shall promptly
notify each Bank thereof. Not later than 2:00 P.M., New York City time, on
the Borrowing Date specified in such notice, each Bank shall (subject to
subsection 9.3(b)) deposit in its Clearing Account an amount in immediately
available funds equal to the amount of the Revolving Credit Loan to be made
by such Bank pursuant to subsection 2.1. The Agent shall, pursuant to
subsection 9.3(a), cause such amount to be withdrawn from each such
Clearing Account and shall make the aggregate amount so withdrawn available
to the Company by depositing the proceeds thereof in the account of the
Company with the Agent on the date such Loans are made for transmittal by
the Agent upon the Company's request. Each borrowing pursuant to
subsection 2.1 shall be in an aggregate principal amount of the lesser of
(i) $50,000,000 or an integral multiple of $1,000,000 in excess thereof or
(ii) the then Available Commitments, provided that, with respect to any
borrowing of Eurodollar Loans, after giving effect thereto, subsection 2.10
shall not have been contravened.
2.3 Liquidity Facility Loans. (a) Subject to the terms and
conditions hereof, each Liquidity Facility Bank severally agrees to make
liquidity loans (individually, a "Liquidity Facility Loan"; collectively,
the "Liquidity Facility Loans") to the Company from time to time during the
Commitment Period in accordance with the procedures set forth in this
subsection 2.3 in an aggregate principal amount at any one time outstanding
not to exceed such Bank's Commitment. Amounts borrowed by the Company
under this subsection 2.3 may be repaid and, to but excluding the
Termination Date, reborrowed. All Liquidity Facility Loans shall at all
times be Base Rate Loans. The Company shall give the Agent irrevocable
notice of any Liquidity Facility Loans requested hereunder (which notice
must be received by the Agent prior to 12:00 Noon, New York City time, on
the requested Borrowing Date) specifying (A) the amount to be borrowed, and
(B) the requested Borrowing Date. Upon receipt of such notice, the Agent
shall promptly notify each Liquidity Facility Bank thereof. Not later than
2:00 P.M., New York City time, on the Borrowing Date specified in such
notice each Liquidity Facility Bank shall make the amount of its Liquidity
Facility Loan available to the Agent for the account of the Company at the
office of the Agent set forth in subsection 9.2 in funds immediately
available to the Agent. The proceeds of such borrowing will then be made
available to the Company by the Agent crediting the account of the Company
on the books of such office with the aggregate of the amounts made
available to the Agent by the Liquidity Facility Banks and in like funds as
received by the Agent. Each borrowing pursuant to this subsection 2.3
shall be in an aggregate principal amount of the lesser of (i) $50,000,000
or an integral multiple of $1,000,000 in excess thereof and (ii) the then
Available Commitments. Notwithstanding anything to the contrary contained
in this Agreement, in no event may Liquidity Facility Loans be borrowed
under this subsection 2.3 if, after giving effect thereto and the
application of the proceeds thereof, the aggregate principal amount of
Revolving Credit Loans and Liquidity Facility Loans made by any Bank then
outstanding would exceed such Bank's Commitment.
(b) Notwithstanding the occurrence of any Default or Event of
Default or noncompliance with the conditions precedent set forth in Section
4, if any Liquidity Facility Loans shall remain outstanding at 10:00 A.M.,
New York City time, on the fourth Business Day following the Borrowing Date
thereof and if by such time on such fourth Business Day the Agent shall
have received neither (i) a notice of borrowing delivered pursuant to
subsection 2.2 requesting that Revolving Credit Loans be made pursuant to
subsection 2.1 on the immediately succeeding Business Day in an amount at
least equal to the aggregate principal amount of such Liquidity Facility
Loans, nor (ii) any other notice indicating the Company's intent to repay
such Liquidity Facility Loans with funds obtained from other sources, the
Agent shall be deemed to have received a Notice of Borrowing from the
Company pursuant to subsection 2.2 requesting that Revolving Credit Loans
(which shall be Base Rate Loans) be made pursuant to subsection 2.1 on such
immediately succeeding Business Day in an amount equal to the aggregate
amount of such Liquidity Facility Loans, and the procedures set forth in
subsection 2.2 shall be followed in making such Revolving Credit Loans.
The proceeds of such Revolving Credit Loans shall be applied to repay such
Liquidity Facility Loans.
(c) If, for any reason, Revolving Credit Loans may not be made
pursuant to paragraph (b) of this subsection 2.3 to repay Liquidity
Facility Loans as required by such paragraph, effective on the date such
Revolving Credit Loans would otherwise have been made, each Bank severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, to the extent of such Bank's
Commitment Percentage, purchase a participating interest in such Liquidity
Facility Loans ("Unrefunded Liquidity Facility Loans"). Each Bank will
immediately transfer to the Agent, in immediately available funds, the
amount of its participation, and the proceeds of such participation shall
be distributed by the Agent to each Liquidity Facility Bank in such amount
as will reduce the amount of the participating interest retained by such
Liquidity Facility Bank in its Liquidity Facility Loans to its Commitment
Percentage of the Revolving Credit Loans which were to have been made
pursuant to paragraph (b) of this subsection 2.3. Each Bank shall share on
a pro rata basis (calculated by reference to its participating interest in
such Liquidity Facility Loans) in any interest which accrues thereon and in
all repayments thereof. All payments in respect of Unrefunded Liquidity
Facility Loans and participations therein shall be made in accordance with
subsection 2.15.
2.4 Repayment of Revolving Credit Loans and Liquidity Facility
Loans. The Company shall repay all outstanding Revolving Credit Loans and
Liquidity Facility Loans (together with all accrued unpaid interest
thereon) on the last day of the Commitment Period.
2.5 Lending Procedures. (a) Unless the Agent shall have
received notice from a Bank prior to a Borrowing Date that such Bank will
not make available to the Agent such Bank's share of the borrowing
requested to be made on such Borrowing Date, the Agent may assume that such
Bank has made its share of such borrowing available to the Agent on such
Borrowing Date, and the Agent may, in reliance upon such assumption, make
available to the Company on such Borrowing Date a corresponding amount. If
the Agent does, in such circumstances, make available to the Company such
amount, such Bank shall within three Business Days following such Borrowing
Date make its share of such borrowing available to the Agent, together with
interest thereon for each day from and including such Borrowing Date that
its share of such borrowing was not made available, to but excluding the
date such Bank makes its share of such borrowing available to the Agent, at
the Effective Federal Funds Rate. If such amount is so made available,
such payment to the Agent shall constitute such Bank's Loan on such
Borrowing Date for all purposes of this Agreement. If such amount is not
so made available to the Agent, then the Agent shall notify the Company of
such failure, and, on the fourth Business Day following such Borrowing
Date, the Company shall pay to the Agent such amount, together with
interest thereon for each day that the Company had the use of such ratable
portion at the Effective Federal Funds Rate. Nothing contained in this
subsection 2.5(a) shall relieve any Bank which has failed to make available
its share of any borrowing hereunder from its obligation to do so in
accordance with the terms hereof.
(b) The failure of any Bank to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan on such Borrowing Date, but no Bank shall
be responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on such Borrowing Date.
2.6 Evidence of Debt. (a) Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Company to the appropriate lending office of such Bank
resulting from each Loan made by such lending office of such Bank from time
to time, including the amounts of principal and interest payable and paid
to such lending office of such Bank from time to time under this Agreement.
(b) The Agent shall maintain the Register pursuant to subsection
9.7(c), and a subaccount for each Bank, in which Register and subaccounts
(taken together) shall be recorded (i) the amount of each Loan made
hereunder, whether such Loan is a Revolving Credit Loan or a Liquidity
Facility Loan, the Type of each Loan made and the Interest Period (if any)
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Company to each Bank
hereunder and (iii) the amount of any sum received by the Agent hereunder
from the Company and each Bank's share thereof.
(c) The entries made in the Register and accounts maintained
pursuant to paragraphs (a) and (b) of this subsection 2.6 shall, to the
extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Company therein recorded;
provided, however, that the failure of any Bank or the Agent to maintain
such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Company to
repay (with applicable interest) the Loans made to the Company by such Bank
in accordance with the terms of this Agreement.
2.7 Facility Fees. The Company agrees to pay to the Agent, for
the account of the Banks, a facility fee for each day from and including
the Effective Date to but excluding the later of (a) the last day of the
Commitment Period and (b) the date on which all of the Loans shall have
been paid in full (such later date, the "Final Date"). Such fee shall be
payable quarterly in arrears on (i) the first Business Day of each January,
April, July and October (for the three-month period (or portion thereof)
ended on the last day of the immediately preceding month) and (ii) on the
Final Date (for the period ended on such date for which no payment has been
received pursuant to clause (i) above) and shall be computed for each day
during such period at a rate per annum equal to the Facility Fee Rate in
effect on such day on the aggregate amount of the Commitments in effect on
such day (or, if the Commitments shall have been terminated, on the
aggregate outstanding principal amount of the Loans on such day).
2.8 Termination or Reduction of Commitments. The Company shall
have the right, upon not less than five Business Days' notice to the Agent,
to terminate the Commitments or, from time to time to reduce the amount of
the Commitments to an amount not less than the aggregate principal amount
of the Loans then outstanding after giving effect to any contemporaneous
prepayment thereof permitted under subsection 2.9. Upon receipt of such
notice the Agent shall promptly notify each Bank thereof. Any such
reduction shall be in an amount of at least $100,000,000 and shall reduce
permanently the amount of the Commitments then in effect. Any termination
of the Commitments shall be accompanied by prepayment in full of the Loans,
together with accrued interest thereon to the date of such prepayment.
2.9 Optional Prepayments. The Company may at any time and from
time to time prepay the Revolving Credit Loans or Liquidity Facility Loans
hereunder, in whole or in part, without premium or penalty, upon prior
notice to the Agent (which notice must be received by the Agent prior to
10:00 A.M., New York City time (i) three Business Days prior to the
repayment date in the case of Eurodollar Loans and (ii) one Business Day
prior to the repayment date otherwise) specifying the date and amount of
prepayment, and whether the prepayment is of Eurodollar Loans, Base Rate
Loans or a combination thereof, and, if a combination thereof, the amount
allocable to each; provided that, in the case of any prepayment of
Liquidity Facility Loans, such notice may be delivered to the Agent as late
as, but no later than 12:00 Noon, New York City time, on the date of such
prepayment and provided, further, that each prepayment of Eurodollar Loans
on a day other than the last day of the related Interest Period shall
require the payment of any amounts payable by the Company pursuant to
subsection 2.20. Upon receipt of any such notice, the Agent shall promptly
notify each Bank thereof. Any such notice shall be irrevocable, and the
payment amount specified in such notice shall be due and payable on the
date specified, together with accrued interest to such date on the amount
prepaid. Partial prepayments shall be in an aggregate principal amount of
$25,000,000 or a multiple of $1,000,000 in excess thereof.
2.10 Minimum Amount of Eurodollar Tranches. All borrowings,
payments, prepayments, continuations and conversions hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising any Eurodollar Tranche shall not be less than $100,000,000.
2.11 Interest Rate and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period therefor on
the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period, plus the Applicable
Eurodollar Margin.
(b) Each Base Rate Loan shall bear interest for each day on the
unpaid principal amount thereof, at a rate per annum equal to the Base Rate
determined for such day plus the Applicable Base Rate Margin.
(c) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any facility fee or other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is (x) in the case of overdue principal,
the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection 2.11 plus 2% or (y) in the case of
any overdue interest, facility fee or other amount, the rate described in
subsection 2.11(b) plus 2%, in each case from the date of such non-payment
to (but excluding) the date on which such amount is paid in full (as well
after as before judgment).
(d) Interest shall be payable in arrears (i) with respect to
Eurodollar Loans having an Interest Period of three months or less, on the
last day of such Interest Period, (ii) with respect to Eurodollar Loans
having an Interest Period longer than three months, on each day which is
three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period, (iii) with
respect to Base Rate Loans (other than Liquidity Facility Loans which do
not constitute Unrefunded Liquidity Facility Loans), on the last day of
each March, June, September and December, and (iv) with respect to all
Loans, upon each repayment, prepayment or conversion thereof; provided that
interest accruing pursuant to paragraph (c) of this subsection shall be
payable on demand. The amount of interest on any Loans to be paid on any
date as specified above shall in each case be determined under the
assumption that the Utilization for the Utilization Period(s) during which
such interest accrued was less than 33-1/3%. On the first Business Day
following the last day of each Excess Utilization Period, the Company shall
pay to the Agent, for the benefit of the Banks, an additional amount of
interest equal to the excess (if any) of (i) the amount of interest which
accrued during such Utilization Period after giving effect to the actual
Utilization for such Utilization Period (whether or not such accrued
interest was actually payable during such Utilization Period) over (ii) the
amount of interest which would have accrued during such Utilization Period
if the Utilization during such Utilization Period had been less than 33-
1/3%.
2.12 Conversion and Continuation Options. (a) The Company may
elect from time to time to convert Eurodollar Loans to Base Rate Loans, by
giving the Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto.
The Company may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Bank thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided herein,
provided that (i) no Base Rate Loan may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the Agent has
or the Required Banks have determined in its or their sole discretion that
such conversion is not appropriate, (ii) any such conversion may only be
made if, after giving effect thereto, subsection 2.10 shall not have been
contravened and (iii) no Base Rate Loan may be converted into a Eurodollar
Loan after the date that is seven days prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving irrevocable notice to the Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in
subsection 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is continuing and the Agent
has or the Required Banks have determined in its or their sole discretion
that such continuation is not appropriate, (ii) if, after giving effect
thereto, subsection 2.10 would be contravened or (iii) after the date that
is seven days prior to the Termination Date and provided, further, that if
the Company shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period.
2.13 Computation of Interest and Fees. (a) Interest (other
than interest calculated on the basis of the Prime Rate) shall be
calculated on the basis of a 360-day year for the actual days elapsed.
Facility fees and interest calculated on the basis of the Prime Rate shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year
for the actual days elapsed. The Agent shall, as soon as practicable,
notify the Company and the Banks of each determination of the Eurodollar
Rate with respect to Eurodollar Loans. Any change in the interest rate in
respect of a Loan or in any facility fee resulting from a change in the
Base Rate, the Applicable Base Rate Margin, the Applicable Eurodollar
Margin or Status shall become effective as of the opening of business on
the day on which a change in the Base Rate shall become effective or such
Applicable Base Rate Margin, Applicable Eurodollar Margin or Status changes
as provided herein, as the case may be. The Agent shall notify the Company
and the Banks of the effective date and the amount of each such change in
the Base Rate.
(b) Each determination, pursuant to and in accordance with any
provision of this Agreement, of an interest rate applicable to a Eurodollar
Loan by the Agent, and each determination by a Reference Bank of a rate
with respect to a Eurodollar Loan to be notified to the Agent pursuant to
the definition of "Eurodollar Rate" shall be conclusive and binding on the
Company and the Banks in the absence of manifest error. The Agent shall,
at the request of the Company, deliver to the Company a statement showing
any quotations given by the Reference Banks and the computations used by
the Agent in determining any interest rate pursuant to subsection 2.11(a).
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments) or, as the case may
be, Loans made by it hereunder are assigned, or prepaid or repaid
(otherwise than on the ratable prepayment or repayment of the Loans among
the Banks) for any reason whatsoever, such Reference Bank shall thereupon
cease to be a Reference Bank, and if, as a result of the foregoing, there
shall be only one Reference Bank remaining, then the Agent (after
consultation with the Company and the Banks) shall, as soon as practicable
thereafter, by notice to the Company and the Banks, designate another Bank
that is willing to act as a Reference Bank so that there shall at all times
be at least two Reference Banks. In acting so to designate another Bank to
serve as a Reference Bank, the Agent will use its best efforts to ensure
that one Reference Bank will, at all times, be a Bank that has its
headquarters office located outside the United States.
(d) If any of the Reference Banks shall be unable or shall
otherwise fail to provide notice of a rate to the Agent upon its request
with respect to a Eurodollar Loan, the Eurodollar Rate shall be determined
on the basis of rates provided in notices of the remaining Reference Banks.
2.14 Inability to Determine Eurodollar Rate. In the event that
(a) the Agent determines (which determination shall be conclusive and
binding upon the Company) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate in respect of any Eurodollar Loans, or (b)
the Required Banks determine (which determination shall be conclusive and
binding upon the Company) and shall notify the Agent that the rates of
interest referred to in the definition of "Eurodollar Rate" as the basis
upon which the rate of interest for Eurodollar Loans is to be determined do
not adequately cover the cost to the Banks of making or maintaining
Eurodollar Loans, in each case with respect to proposed Revolving Credit
Loans that the Company has requested be made as a Eurodollar Loan, the
Agent shall forthwith give facsimile transmission or other written notice
of such determination to the Company and the Banks at least one Business
Day prior to the requested Borrowing Date for such Eurodollar Loan. If
such notice is given, any requested borrowing of a Eurodollar Loan shall be
made as a Base Rate Loan. Until such notice has been withdrawn by the
Agent, no further Eurodollar Loans shall be made.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing of
Revolving Credit Loans (except borrowings pursuant to subsection 2.16),
each payment of facility fees, and any reduction of the amount of the
Commitments of the Banks hereunder (except for the termination or reduction
of a particular Bank's Commitment pursuant to subsection 2.19(a)) shall be
made pro rata according to the amounts of the then existing Commitments
(or, in the case of facility fees payable after the Commitments have been
terminated and prior to the date the Loans shall have been paid in full,
pro rata according to the amounts of the then outstanding Loans of the
Banks). Each borrowing of Liquidity Facility Loans shall be made pro rata
according to the amounts of the then existing Commitments of the Liquidity
Facility Banks. Each payment (including each prepayment) by the Company on
account of principal of and interest on (except for payments to a
particular Bank pursuant to subsection 2.16, 2.17, 2.18, 2.19, 2.20 or
2.21) Revolving Credit Loans shall be made on a pro rata basis according to
the amounts of the then outstanding Revolving Credit Loans of the Banks.
Each payment (including each prepayment) by the Company on account of
principal of and interest on (except for payments to a particular Liquidity
Facility Bank pursuant to subsection 2.16, 2.17, 2.18, 2.19, 2.20 or 2.21)
Liquidity Facility Loans shall be made on a pro rata basis according to the
amounts of the then outstanding Liquidity Facility Loans of the Liquidity
Facility Banks. All payments (including prepayments) by the Company on
account of principal, interest, fees and other amounts shall be made
without setoff or counterclaim to the Agent for the account of the Banks at
the office of the Agent referred to in subsection 9.2 in Dollars and in
immediately available funds. The Agent shall promptly distribute such
payments to each Bank entitled to receive a portion thereof by causing such
Bank's portion of such payment to be deposited in such Bank's Clearing
Account. If any payment hereunder (other than a payment in respect of a
Eurodollar Loan) becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day unless the result of such extension would be
to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day. In the
case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable
rate during such extension.
(b) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Banks hereunder that
the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date, and
the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due to such
Bank. If and to the extent the Company shall not have so made such payment
in full to the Agent, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon,
for each day from and including the date such amount is distributed to such
Bank to but excluding the date such Bank repays such amount to the Agent at
the Effective Federal Funds Rate for each such day. Nothing contained in
this subsection 2.15(b) shall relieve the Company from its obligations to
make payments on all amounts due hereunder in accordance with the terms
hereof.
2.16 Illegality. Notwithstanding any other provision herein, if
any law, regulation, treaty or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Bank
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Bank hereunder to make Eurodollar Loans shall
forthwith be cancelled and (b) such Bank's Loans then outstanding as
Eurodollar Loans, if any, shall, if required by law and if such Bank so
requests, be converted automatically to Base Rate Loans on the date
specified by such Bank in such notice. To the extent that such affected
Eurodollar Loans are made as (or converted into) Base Rate Loans, all
payments of principal which would otherwise be applied to such Eurodollar
Loans shall be applied instead to such Bank's Base Rate Loans. The Company
hereby agrees promptly to pay any Bank, upon its demand, any additional
amounts necessary to compensate such Bank for any costs incurred by such
Bank in making any conversion in accordance with this subsection 2.16,
including, but not limited to, any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its Eurodollar
Loans hereunder (such Bank's notice of such costs, as certified to the
Company through the Agent, to be conclusive absent manifest error).
2.17 Increased Costs. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority enacted or made subsequent to
the date hereof:
(i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank; or
(ii) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
of making, or maintaining advances or extensions of credit or to reduce any
amounts receivable hereunder (such increase in cost or reduction in amounts
receivable, "Increased Costs") then, in any such case, the Company shall
promptly pay to the Agent for the account of such Bank, upon the written
demand of such Bank to the Company (with a copy to the Agent), so long as
such Increased Costs are not otherwise included in the amounts required to
be paid to such Bank pursuant to subsection 2.16, 2.17(b), 2.18, 2.19, 2.20
or 2.21, any additional amounts necessary to compensate such Bank for such
Increased Costs which such Bank deems to be material as determined by such
Bank with respect to its Eurodollar Loans. If a Bank becomes entitled to
claim any additional amounts pursuant to this subsection 2.17(a), it shall
promptly notify the Company, through the Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by a Bank,
through the Agent, to the Company shall be conclusive in the absence of
manifest error.
(b) Upon notice from any Affected Bank (as hereinafter defined),
the Company shall pay to the Agent for the account of such Affected Bank an
additional amount for each Eurodollar Loan of such Affected Bank, payable
on the last day of the Interest Period with respect thereto, equal to
P X [[R / (1.00 - r)] - R] X [T / 360]
Where P = the principal amount of such Eurodollar Loan of such Bank;
R = the Eurodollar Rate (expressed as a decimal) for such
Interest Period;
T = the number of days in such Interest Period during which such
Bank was an "Affected Bank"; and
r = the aggregate of rates (expressed as a decimal) of reserve
requirements current on the date two Business Days prior to
the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency
reserves) under any regulations of the Federal Reserve Board
or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time hereafter in
effect, dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Federal Reserve Board)
maintained by a member bank of the Federal Reserve System.
The term "Affected Bank" shall mean any Bank party to this
Agreement that is (i) organized under the laws of the United States or any
State thereof or (ii) a bank organized under laws other than those of the
United States of America or a State thereof that is funding its Eurodollar
Loans through a branch or agency located in the United States of America.
Each Bank agrees to notify the Agent (A) by appropriate notification on its
Addendum in the case of each original Bank party hereto and (B) in the case
of each New Bank, and each assignee pursuant to subsection 9.7(a) that is
not already a Bank, upon its becoming a party hereto, whether or not it is
an Affected Bank, and of any subsequent change of status, disclosing the
effective date of such change.
2.18 Transfer of Eurodollar Loans. Upon the occurrence of any
of the events specified in subsection 2.16 or 2.17(a), each Bank whose
Eurodollar Loans are affected by any such event agrees that it will
transfer its Eurodollar Loans affected by any such event to another branch
office (or, if such Bank so elects, to an affiliate) of such Bank, provided
that such transfer shall be made only if such Bank shall have determined in
good faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (a) on the basis of existing
circumstances, such transfer will avoid such events and will not result in
any additional costs, liabilities or expenses to such Bank or to the
Company and (b) such transfer is otherwise consistent with the interests of
such Bank.
2.19 Changes in Capital Requirements. (a) In the event that,
in the opinion of counsel for any Bank (which may, in the discretion of
such Bank, be such Bank's internal counsel), compliance with any law, rule,
regulation or guideline, or any change therein or in the interpretation or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or
Governmental Authority enacted or made subsequent to the date hereof shall
affect the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank and the amount of such
capital that is required or expected to be maintained is increased by or
based upon the Commitment of such Bank under this Agreement or any
participation agreement entered into pursuant to subsection 9.7, as
applicable (such event, a "Change in Law"), such affected Bank shall notify
the Company and the Agent within 180 days after such affected Bank shall
have obtained actual knowledge of the costs associated with its compliance
with such Change in Law (but in no event later than 365 days after such
Bank is first required to comply with such Change in Law). At the time of
such notification such affected Bank shall provide the Company with a
written statement setting forth the amount that would adequately compensate
such affected Bank for the costs associated with its compliance with such
Change in Law and setting forth in reasonable detail the assumptions upon
which such affected Bank calculated such amount, and a copy of the opinion
of counsel referred to in the preceding sentence. Such affected Bank shall
allocate to the Company the costs associated with such Change in Law in
such a way that the proportion of (i) such costs that are allocated to the
Company to (ii) the total of such costs of such affected Bank associated
with such Change in Law as it relates to all commitments of such Bank to
its customers of similar creditworthiness as the Company, is substantially
the same as the proportion of (i) the Commitment of such affected Bank
under this Agreement or such participation agreement to (ii) the total of
all commitments by such affected Bank to its customers of similar
creditworthiness as the Company. The Company and such affected Bank shall
thereafter negotiate in good faith an agreement to increase that portion of
the facility fee payable to such affected Bank under subsection 2.7 to a
level, which, in the opinion of such affected Bank, will adequately
compensate such affected Bank for such costs. If such increase is approved
in writing by the Company within 90 days from the date of the notice to the
Company from such affected Bank, the facility fee payable by the Company
shall, effective from the date of such Change in Law (but subject to the
last sentence of this subsection 2.19(a)) include the amount of such agreed
increase, and the Company will so notify the Agent. If the Company and
such affected Bank are unable to agree on such an increase within 90 days
from the date of the notice to the Company from such affected Bank, the
Company shall by written notice to such affected Bank within 120 days from
the date of the aforesaid notice to the Company from such affected Bank,
elect either to (a) terminate the Commitment of such affected Bank (each
such Bank, a "Terminated Bank") (subject to the last sentence of this
subsection 2.19(a)) or (b) (subject to the next to last sentence of this
subsection 2.19(a)) increase the facility fee payable to such affected Bank
by the amount requested by such affected Bank. Without limiting the
foregoing, if the Company elects to take the action described in clause (b)
of the preceding sentence, it may simultaneously therewith reduce the
Commitment of such affected Bank by an amount chosen by the Company. If
the Company fails to provide notice to such affected Bank as described in
the second preceding sentence by such 120th day, the Company shall be
deemed to have taken the action described in clause (b) of such second
preceding sentence. The Company (A) may from time to time after such 120th
day reduce the compensation to be received pursuant to this subsection
2.19(a) by any affected Bank as a result of any Change in Law, to the
average compensation (the "Average Compensation") the Company has agreed,
as provided above, to pay the affected Banks as a result of such Change in
Law (such average compensation to be measured by a percentage of the
aggregate Commitments of such affected Banks) and (B) shall pay to each
Terminated Bank, on the date the Commitment of such Bank is terminated, an
amount equal to the excess, if any, of (i) the lesser of (x) the aggregate
facility fee that would have been payable to such Bank, from the date of
such Terminated Bank's notice to the Company pursuant to this subsection
2.19(a) to the date the Commitment of such Terminated Bank is terminated,
had such facility fee been determined by reference to the Average
Compensation and (y) the aggregate facility fee that would have been
payable to such Bank during such period had such facility fee been
increased by an amount necessary to adequately compensate such Bank (as
determined by such Bank in accordance with the applicable provisions of
this subsection 2.19(a)) for the costs attributable to the relevant Change
in Law over (ii) the aggregate facility fee actually paid to such Bank
during such period.
(b) Upon the occurrence of any Change in Law each Bank whose
Commitment hereunder is affected by such Change in Law shall transfer its
Commitment to another branch office (or, if such Bank so elects, to an
affiliate) of such Bank, provided that such transfer shall be made only if
such Bank shall have determined in good faith (which determination shall,
absent manifest error, be final, conclusive and binding upon all parties)
that (i) on the basis of existing circumstances, such transfer will avoid
the increased costs resulting from such Change in Law and will not result
in any additional costs, liabilities or expenses to such Bank (unless the
Company agrees to pay such additional costs, liabilities or expenses of
such Bank) and (ii) such transfer is otherwise consistent with the
interests of such Bank.
2.20 Indemnity. The Company agrees to indemnify each Bank and
to hold such Bank harmless from any loss or expense (including, but not
limited to, any such loss or expense arising from interest or fees payable
by such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder, but excluding loss of the Applicable Eurodollar
Margin), which such Bank may sustain or incur as a consequence of (a)
failure by the Company in making any payment when due (whether by
acceleration or otherwise) of the principal amount of or interest on the
Eurodollar Loans of such Bank, (b) failure by the Company to make a
borrowing of Eurodollar Loans, or a conversion into or continuation of
Eurodollar Loans, after the Company has given a notice requesting or
accepting the same in accordance with the provisions of this Agreement, (c)
failure by the Company in making any prepayment after the Company has given
a notice in accordance with this Agreement and (d) a payment or prepayment
of a Eurodollar Loan on a day that is not the last day of the Interest
Period with respect thereto. Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such payment, prepayment or of
such failure to borrow, convert or continue to the last day of the relevant
Interest Period (or proposed Interest Period), in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Eurodollar Margin) over (ii) the amount of interest
(as reasonably determined by such Bank) which would have accrued to such
Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. The
agreements in this subsection 2.20 shall survive the payment of the Loans
and all other amounts payable hereunder.
2.21 Taxes. (a) In the event that the adoption of any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to any Bank under this Agreement, upon notice by
such Bank to the Company (with a copy to the Agent) to the effect that (i)
as a result of the adoption of such law, rule, regulation, treaty or
directive or a change therein or in the interpretation thereof, Taxes are
being withheld or deducted from amounts payable to such Bank under this
Agreement and (ii) such Bank has taken all action required to be taken by
it to avoid the imposition of such Taxes pursuant to paragraph (c) of this
subsection 2.21 prior to demanding indemnification under this paragraph
(a), the Company will pay to the Agent for the account of such Bank
additional amounts so that such additional amounts, together with amounts
otherwise payable under this Agreement, will yield to such Bank, after
deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, the amount stated to be payable under this
Agreement. The term "Taxes" shall mean all net income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
imposed, levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein), excluding,
with respect to any Bank, net income and franchise taxes imposed with
respect to net income of any country (or any political subdivision or
taxing authority thereof or therein) where such Bank is organized or, in
respect of such Bank's Eurodollar Loans, by the country (or any political
subdivision or tax authority thereof or therein) where such Bank's
Eurodollar Loans are booked and, in respect of such Bank's Base Rate Loans,
by the country (or any political subdivision or tax authority thereof or
therein) where such Bank's Base Rate Loans are booked. If the Company
fails to pay any Taxes when due following notification by any Bank as
provided above, the Company shall indemnify such Bank for any incremental
taxes, interest or penalties that may become payable by any Bank as a
result of any such failure by the Company to make such payment. The
Company may, upon payment by the Company to any Bank claiming
indemnification under this paragraph (a) of any amount payable by the
Company to such Bank, elect by not less than four Business Days' prior
written notice to such Bank to terminate the Commitment of such Bank and
prepay the Loans of such Bank outstanding hereunder on the next day upon
which a prepayment may be made pursuant to subsection 2.9.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to
the Company and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or any successor applicable
form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or
W-9 or any successor form. Each such Bank also agrees to deliver to the
Company and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Company,
and such extensions or renewals thereof as may reasonably be requested by
the Company or the Agent, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Bank
from duly completing and delivering any such form with respect to it and
such Bank so advises the Company and the Agent. Such Bank shall certify
(i) in the case of Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-
9, that it is entitled to an exemption from United States backup
withholding tax.
(c) No Bank may request indemnification for any Taxes from the
Company under paragraph (a) of this subsection 2.21 to the extent that such
Taxes would have been avoided or reduced by such Bank's transfer of its
Loans affected by such event to another office of such Bank (or to an
affiliate of such Bank), by such Bank's properly claiming the benefit of
any exemption from or reduction of such Taxes (whether provided by statute,
treaty or otherwise), including, without limitation, by delivering the
forms required by paragraph (b) of this subsection 2.21, or by such Bank's
taking any other action which in its judgment is reasonable to avoid or
reduce such Taxes, provided that such Bank shall not be required to (i)
take any action which in the reasonable judgment of such Bank could
directly or indirectly result in any increased cost or expense or in any
loss of opportunity to such Bank unless the Company shall have provided to
such Bank indemnity or reimbursement therefor in form and substance
reasonably satisfactory to such Bank or (ii) claim or apply any tax credit
against such Taxes.
(d) Within 30 days after the payment by the Company of any
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
any Bank under this Agreement, and irrespective of whether such Bank is
entitled to demand indemnification in respect thereof under paragraph (a)
above, the Company will furnish to such Bank (with a copy to the Agent),
the original or a certified copy of a receipt evidencing payment thereof.
2.22 Use of Proceeds. The proceeds of the Loans hereunder shall
be used by the Company for general corporate purposes.
2.23 Replacement of Banks. The Company shall be permitted to
replace any Bank which (a) requests reimbursement for amounts owing
pursuant to subsection 2.17, 2.19 or 2.21, (b) is affected in the manner
described in subsection 2.16 and as a result thereof any of the actions
described in said subsection is required to be taken or (c) defaults in its
obligation to make Revolving Credit Loans or Liquidity Facility Loans
hereunder, with a replacement Commercial Bank; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such
replacement, (iii) the Company shall repay (or the replacement Commercial
Bank shall purchase, at par) all Loans and other amounts (including accrued
interest) owing to such replaced Bank concurrently with such replacement,
(iv) the Company shall be liable to such replaced Bank under subsection
2.20 if any Eurodollar Loan owing to such replaced Bank shall be prepaid
(or purchased) other than on the last day of the Interest Period relating
thereto, (v) the replacement Commercial Bank, if not already a Bank, and
the terms and conditions of such replacement, shall be reasonably
satisfactory to the Agent, (vi) the replaced Bank shall be obligated to
make such replacement in accordance with the provisions of subsection 9.7
(provided that the Company shall be obligated to pay the registration and
processing fee referred to therein), (vii) until such time as such
replacement shall be consummated, the Company shall pay all additional
amounts (if any) required pursuant to subsection 2.17, 2.19 or 2.21, as the
case may be, and (viii) any such replacement shall not be deemed to be a
waiver of any rights which the Company, the Agent or any other Bank shall
have against the replaced Bank.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to
make the Loans herein provided for, the Company hereby represents and
warrants to each Bank that:
3.1 Financial Condition. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 1993, and the related
consolidated statements of net earnings and cash flows for the fiscal year
ended on such date, certified by Deloitte & Touche, copies of which have
been delivered to each Bank, present fairly the consolidated financial
position of the Company and its Subsidiaries as at such date, and the
consolidated results of their operations and cash flows for the fiscal year
then ended. The unaudited consolidated balance sheet of the Company and
its Subsidiaries as at March 31, 1994, and the related consolidated
statements of net earnings and cash flows for the three-month period ended
on such date, certified by a Responsible Officer, copies of which have been
delivered to each Bank, present fairly the consolidated financial condition
of the Company and its Subsidiaries as at such date, and the consolidated
results of their operations for the three-month period then ended (subject
to normal year-end audit adjustments). Such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. As at March 31, 1994, neither the Company nor any of
its Subsidiaries had any asset, liability, contingent obligation, liability
for taxes, long-term lease or unusual forward or long-term commitment
material to the financial condition of the Company and its Subsidiaries
taken as a whole, which was not reflected in the foregoing statements or in
the notes thereto.
3.2 No Change. Between December 31, 1993 and the Effective Date
there has been no material adverse change in the business, operations or
financial condition of the Company and its Subsidiaries taken as a whole.
3.3 Corporate Existence. The Company (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Michigan, and (b) is duly qualified as a foreign corporation to do
business and is in good standing in each of the jurisdictions in which the
character of the properties owned or held under lease by it or the nature
of business transacted by it makes such qualification necessary, except in
the case of this clause (b) to the extent that the failure to be so
qualified or in good standing would not have a material adverse effect on
the business, operations or financial condition of the Company and its
Subsidiaries taken as a whole.
3.4 Corporate Authorization; No Violation. The execution,
delivery and performance by the Company of this Agreement are within the
corporate powers of the Company, have been duly authorized by all necessary
corporate action, and do not contravene any Requirement of Law or
Contractual Obligation of the Company or any of its Subsidiaries, except to
the extent that such contravention would not have a material adverse effect
on the business, operations or financial condition of the Company and its
Subsidiaries taken as a whole or on the ability of the Company to fulfill
its obligations under this Agreement or on the rights and remedies of the
Agent and the Banks hereunder.
3.5 Government Authorization. No authorization or approval or
other action by, and no notice to or filing with, any Governmental
Authority is required to be obtained or made by the Company or any of its
Subsidiaries for the due execution, delivery and performance by the Company
of this Agreement.
3.6 Federal Regulations. Neither the Company nor any of its
Subsidiaries is principally engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U, T, G or X issued by the Federal Reserve Board), and no
proceeds of any borrowing hereunder will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
3.7 Enforceable Obligations. This Agreement has been duly
executed and delivered on behalf of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by principles of equity, whether considered
in a proceeding in equity or at law.
3.8 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company
or any of its Subsidiaries or against any of its or their respective
properties or revenues, in which there is a reasonable likelihood of an
adverse determination (a) with respect to this Agreement or any of the
transactions contemplated hereby, if such adverse determination would have
a material adverse effect on the ability of the Company to fulfill its
obligations under this Agreement or on the rights and remedies of the Agent
and the Banks hereunder or (b) which would, if adversely determined, have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole.
3.9 Taxes. Each of the Company and its Subsidiaries has filed
or caused to be filed all material tax returns which to the knowledge of
the Company are required to be filed, and has paid all material taxes shown
to be due and payable on said returns or on any assessments made against it
or any of its property and all other taxes, fees or other charges imposed
on it or any of its property by any Governmental Authority (other than
those the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP, if any, have been provided on the books of the
Company or its Subsidiaries, as the case may be).
3.10 ERISA. No Prohibited Transaction or Accumulated Funding
Deficiency (other than those that have been waived by the Internal Revenue
Service) has occurred since July 1, 1974 with respect to any Plan and no
Reportable Event has occurred since July 1, 1974 with respect to any Plan
which could in either case subject the Company or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole. The
projected benefit obligations with respect to all benefits, both vested and
nonvested, under all Single Employer Plans (based on the most recently
available actuarial information and computed in accordance with Statement
of Accounting Standards No. 87) maintained by the Company or a Commonly
Controlled Entity did not exceed, at December 31, 1993, the fair value of
the assets of such Plans by more than $2,500,000,000.
3.11 Investment Company Act; Other Regulations. The Company is
not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. The Company is not subject to regulation under any Federal or
state statute or regulation which limits its ability to incur Indebtedness.
3.12 Ownership of Property; Liens. The Company and its U.S.
Subsidiaries have good title in fee simple to or valid leasehold interests
in their respective property that is material to the operation of their
respective businesses, subject to defects in title and leasehold and other
interests which are not material to the business, operations and financial
condition of the Company and its Subsidiaries taken as a whole, and none of
such property is subject to any Lien other than Liens excepted under
subsection 6.7.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Addenda. (i) This Agreement
shall have been executed and delivered by a duly authorized officer of
each of the Company and the Agent and (ii) the Agent shall have
received an executed Addendum (or a copy thereof by facsimile
transmission) from each Person listed on Schedule I, provided, that,
notwithstanding the foregoing, in the event that an Addendum has not
been duly executed and delivered by each Person listed on Schedule I
on the date (which shall be no earlier than the date hereof) on which
this Agreement shall have been executed and delivered by each of the
Company and the Agent, this Agreement shall, subject to satisfaction
of the other conditions precedent set forth in this subsection 4.1,
nevertheless become effective on such date with respect to those
Persons which have executed and delivered an Addendum on or before
such date if on such date the Company and the Agent shall have
designated one or more Commercial Banks (the "Designated Banks") to
assume, in the aggregate, all of the Commitments which would have been
held by the Persons listed on Schedule I (the "Non-Executing Persons")
which have not so executed an Addendum (subject to each such
Designated Bank's prior written consent in its sole discretion and its
execution of an Addendum). Schedule I shall automatically be deemed
to be amended to reflect the respective Commitments of the Designated
Banks and the omission of the Non-Executing Persons as Banks
hereunder.
(b) Closing Certificate. The Agent shall have received a
certificate of the Company, dated the Effective Date, substantially in
the form of Exhibit B, with appropriate insertions, satisfactory in
form and substance to the Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of the Company,
and attaching the documents referred to in subsection 4.1(c) and (d).
(c) Corporate Proceedings of the Company. The Agent shall have
received a copy of the resolutions, in form and substance satisfactory
to the Agent, of the Board of Directors of the Company (or a duly
authorized committee thereof) authorizing (i) the execution, delivery
and performance of this Agreement and (ii) the borrowings contemplated
hereunder.
(d) Corporate Documents. The Agent shall have received true and
complete copies of the certificate of incorporation and by-laws of the
Company.
(e) Legal Opinions. The Agent shall have received the following
executed legal opinions, with a copy for each Bank:
(i) the executed legal opinion of Simpson Thacher &
Bartlett, counsel to the Agent, substantially in the form of
Exhibit C-1; and
(ii) the executed legal opinion of Allan L. Ronquillo,
Esq., General Counsel of the Company, substantially in the form
of Exhibit C-2.
(f) Existing Credit Agreement. The Agent shall have received
satisfactory evidence that the Existing Credit Agreement shall have
been terminated pursuant to an irrevocable notice of termination of
commitments and that any amounts owing thereunder (including, without
limitation, accrued unpaid commitment fees thereunder through the
Effective Date) by the Company shall have been (or shall upon the
occurrence of the Effective Date be) paid in full. Without affecting
any terms of the Existing Credit Agreement which expressly survive the
termination of the Existing Credit Agreement, each Bank party to the
Existing Credit Agreement hereby waives any requirement of advance
notice of such termination contained in the Existing Credit Agreement
and hereby agrees that the Existing Credit Agreement and the
commitments thereunder (subject to receipt of any other required
consents of any other Person) shall terminate simultaneously with the
satisfaction by the Company of the conditions to effectiveness set
forth in this subsection 4.1.
The Agent shall notify the Banks of the Effective Date promptly after the
occurrence thereof, which notice shall be accompanied, if applicable, with
a copy of Schedule I revised to give effect to any deemed amendments
thereto made pursuant to subsection 4.1(a).
4.2 Conditions to Each Loan. The obligation of each Bank to
make any Loan on or after the Effective Date, other than pursuant to
subsection 2.3(b), to be made by it hereunder is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. The representations and
warranties made by the Company herein shall be correct in all material
respects on and as of the Borrowing Date for such Loan as if made on
and as of such date, except for any such representations or warranties
which relate solely to an earlier date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such Borrowing Date
or after giving effect to the Loans to be made on such Borrowing Date.
Each borrowing by the Company hereunder, other than pursuant to subsection
2.3(b), shall constitute a representation and warranty by the Company as of
the date of each such borrowing that the conditions in this Section 4 have
been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan remains outstanding and unpaid or
any other amount is owing to any Bank or the Agent hereunder:
5.1 Financial Statements, etc. (a) The Company will furnish to
the Agent and the Banks:
(i) as soon as available and in any event within 60 days
after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, copies of financial
statements of the Company and its Subsidiaries consisting of, at
a minimum, balance sheets of the Company and its Subsidiaries on
a consolidated basis as of the end of such quarterly accounting
period, and related statements of net earnings and cash flows for
the portion of such fiscal year ended with the last day of such
quarterly accounting period, all in reasonable detail (and,
without limiting the generality of this paragraph (a)(i), setting
forth, therein or in a separate certificate, as a separate item,
the amount of interest expense during such period) and prepared
and certified (subject to year-end audit adjustments) by a
Responsible Officer and stating in comparative form the
respective figures for the corresponding date and period in the
previous fiscal year;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, copies of
financial statements of the Company and its Subsidiaries
consisting of, at a minimum, balance sheets of the Company and
its Subsidiaries on a consolidated basis as of the end of such
fiscal year, and related statements of net earnings and cash
flows for such fiscal year, all in reasonable detail (and,
without limiting the generality of this paragraph (a)(ii),
setting forth, therein or in a separate certificate, as a
separate item, the amount of interest expense during such period)
and certified by independent public accountants of nationally
recognized standing selected by the Company and stating in
comparative form the respective figures as of the end of and for
the previous fiscal year;
(iii) concurrently with the financial statements for each
quarterly accounting period and for each fiscal year of the
Company furnished pursuant to paragraphs (a)(i) and (a)(ii) of
this subsection 5.1, (A) a certificate of a Responsible Officer
stating that, based on an examination which in the opinion of the
signer is sufficient to enable him to make an informed statement,
the Company and its Subsidiaries have performed and observed all
of, and neither the Company nor any of its Subsidiaries is in
default in the performance or observance of any of, the terms,
covenants, agreements and conditions of this Agreement or, if the
Company or any of its Subsidiaries shall be in default,
specifying all such defaults and the nature thereof, of which the
signer of such certificate may have knowledge and (B) an analysis
prepared and certified by a Responsible Officer of the covenants
contained in subsections 6.1, 6.2 and 6.3 containing all
information necessary for determining compliance by the Company
with each such covenant; and
(iv) such other information relating to the affairs of the
Company and its Subsidiaries as any Bank through the Agent may
from time to time reasonably request.
(b) Upon written request by any Bank through the Agent, the
Company will furnish to such Bank copies of (i) all such reports of the
type a publicly held corporation would generally make available to its
stockholders as the Company shall make available to Chrysler, (ii) all such
proxy statements, financial statements and reports as any Subsidiary shall
send or make available generally to its stockholders other than the
Company, and (iii) all regular and periodic reports which the Company or
any Subsidiary may be required to file with the Securities and Exchange
Commission or any similar or corresponding government department,
commission, board, bureau or agency, domestic or foreign, or with any
securities exchange.
5.2 Payment of Obligations. The Company will, and will cause
each Subsidiary to, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Company or its Subsidiaries, as the case
may be, and except for delinquent obligations which do not materially
adversely affect the financial condition of the Company and its
Subsidiaries taken as a whole.
5.3 Maintenance of Existence and Property. The Company will,
and will cause each Subsidiary to, preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable in
the normal conduct of its business, except for rights, privileges and
franchises the loss of which would not in the aggregate in the reasonable
business judgment of the Company have a material adverse effect on the
business, operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole, and except as otherwise
permitted by subsection 6.6; and keep all property useful and necessary in
its business in good working order and condition.
5.4 Notices. The Company will promptly give notice to the Agent
(which shall notify the Banks) (a) of the occurrence of any Default or
Event of Default, (b) of any event of default under any material instrument
or other agreement of the Company or any of its Finance Subsidiaries (and
in the case of a notice under this clause (b) or the foregoing clause (a),
such notice shall be accompanied by a certificate of a Responsible Officer
specifying the nature of such event, the period of existence thereof, and
the action that the Company or the relevant Finance Subsidiary proposes to
take with respect thereto), (c) of any litigation, proceeding,
investigation or dispute which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority or any other Person
which might have a materially adverse effect upon the business, operations,
assets or condition, financial or otherwise, of the Company or any of its
Subsidiaries, (d) of any change in the ownership by Chrysler of shares of
capital stock of the Company, and (e) of the occurrence or existence of any
of the following events or conditions, as soon as possible and in any event
within 45 days after the Company knows or should have known thereof: (i)
the occurrence of any Reportable Event with respect to any Single Employer
Plan (other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC pursuant to the regulations issued under ERISA), or (ii)
the institution of proceedings or the taking of any other action by the
PBGC or the Company or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Single Employer Plan, and in
addition to such notice, deliver to the Agent whichever of the following
may be applicable: (A) a certificate of a Responsible Officer setting
forth details as to such Reportable Event and the action that the Company
or Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to PBGC
that such Plan is to be terminated, as the case may be.
SECTION 6. NEGATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan remains outstanding and unpaid or
any other amount is owing to any Bank or the Agent hereunder:
6.1 Limitation on Indebtedness and Guaranties. The Company will
not, and will not permit any Subsidiary to, create, assume or incur, or
become, remain or be liable on any Indebtedness or Guaranty other than
(i) in the case of the Company,
(A) Senior Debt or Guaranties of the Company to the
extent permitted by the proviso to this subsection 6.1,
(B) Subordinated Debt, and
(C) Capital Notes; and
(ii) in the case of any Subsidiary (other than any Finance
Subsidiary which is a U.S. Subsidiary), Indebtedness and
Guaranties of such Subsidiary to the extent permitted by the
proviso to this subsection 6.1;
provided, however, that the Company will not permit the sum, without double
counting, of (x) the aggregate outstanding principal amount of Senior Debt
and of Indebtedness of Subsidiaries and (y) the aggregate outstanding
principal amount of obligations entitled to the benefits of any Guaranty by
the Company or any Subsidiary, in each case as of the last day of any
calendar month, to exceed 650% of the Capital Base as of such last day (or
675% of the Capital Base as of the last day of any three consecutive
calendar months immediately succeeding six consecutive calendar months in
which such aggregate outstanding principal amount did not exceed 650% of
the Capital Base as of the last day of each such month).
6.2 Consolidated Tangible Net Worth. The Company will not
permit Consolidated Tangible Net Worth to be less than $1,500,000,000.
6.3 Fixed Charges Coverage Ratio. The Company will not permit
its "net earnings available for fixed charges" to be less than 110% of its
"fixed charges" for any fiscal year of the Company, or for the portion of
any fiscal year of the Company ending with the last day of each calendar
quarter therein. For the purposes of this subsection 6.3, "net earnings
available for fixed charges" and "fixed charges" shall be determined for
the Company and for the Company and its Subsidiaries on a consolidated
basis.
For the purposes of this subsection 6.3:
(a) "Net earnings available for fixed charges" shall mean net
income after deducting operating and maintenance expenses, taxes other
than federal, state and other income taxes, except to the extent
stated below in the case of consolidated subsidiaries, depreciation
and depletion, but excluding extraordinary nonrecurring items of
income or expense appearing in the regular consolidated financial
statements of the Company.
(b) "Fixed charges" shall mean interest on debt, amortization of
debt discount, and rentals for leased properties, except rentals under
leases having a term of one year or less.
(c) In determining net earnings and fixed charges on a
consolidated basis, all intercompany items and the portions of
earnings allocable to minority interests in consolidated subsidiaries
shall be eliminated, provision for or refund of income taxes of
consolidated subsidiaries in which the Company owns directly or
indirectly less than ninety percent of all classes of voting stock
shall be deducted or added, and fixed charges shall include fixed
charges and preferred dividends of consolidated subsidiaries that are
not intercompany items.
(d) Earnings attributable to assets or institutions acquired by
merger, consolidation, reorganization, succession, organization,
purchase or otherwise may be included for that part of the test period
which precedes such acquisition, provided that (i) if less than
substantially all assets of any other institution (or all or less than
all assets of any other type of business enterprise) is acquired, such
earnings may be included to the extent they are certified by an
independent accountant to be attributable to such assets and (ii) if
an institution (or substantially all of its assets) is acquired, such
earnings may be included if they are included in financial statements
of such institution prepared under generally accepted accounting
principles. Fixed charges and preferred dividends for the period of
such inclusion shall either include any additional fixed charges and
preferred dividends properly attributable to such acquisition as
certified by an independent accountant, or be the fixed charges and
preferred dividends with respect to debt and stock outstanding
immediately after such acquisition.
6.4 Limitation on Transactions with Affiliates. The Company
will not, and will not permit any Subsidiary to, engage in any transaction
with an Affiliate (other than the Company and its Subsidiaries) on terms
substantially less favorable to the Company or such Subsidiary than would
be obtainable at the time in comparable transactions of the Company or such
Subsidiary with Persons not Affiliates.
6.5 Limitation on Amendments to Income Maintenance Agreement.
The Company will not amend, modify, terminate or grant any waiver under the
Income Maintenance Agreement, provided that the Company may enter into a
waiver, amendment or modification of the Income Maintenance Agreement which
is solely for the purposes of (a) extending the term thereof or relaxing or
lessening the restrictions on, or duties of, the Company or any of its
Subsidiaries thereunder or (b) conforming the provisions thereof relating
to the fixed charge coverage ratio to the provisions of subsection 6.3.
6.6 Limitation on Fundamental Change. (a) The Company will
not, nor will it permit any Subsidiary to, merge or consolidate with or
into any other Person, nor will the Company or any Subsidiary enter into
any Material Asset Disposition (as hereinafter defined) except that:
(i) the Company may merge or consolidate with or into any other
Person, provided that (A) the Company shall be the continuing or
surviving corporation, and (B) immediately after such merger or
consolidation, no Default or Event of Default shall have occurred and
be continuing;
(ii) any Subsidiary may merge or consolidate (A) with or into the
Company (provided that the Company shall be the continuing or
surviving corporation), (B) with or into any one or more wholly-owned
Subsidiaries (provided that a wholly-owned Subsidiary shall be the
continuing or surviving corporation), (C) with or into any other
Person, if such Subsidiary shall be the continuing or surviving
corporation, shall continue to be a Subsidiary of the Company and
immediately after such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing, or (D) with or into any
other Person, if the disposition of the stock of such Subsidiary by
its parent corporation does not constitute a Material Asset
Disposition; and
(iii) any Subsidiary may enter into any Material Asset Disposition
by which its assets are transferred to the Company or a wholly-owned
Subsidiary.
For purposes of this subsection 6.6, the term "Material Asset
Disposition" shall mean any transaction (not including a transaction (1) by
which a Lien is created, which is permitted by subsection 6.7, (2)
consisting of a sale of Receivables, or any interest therein, by the
Company or its Subsidiaries or (3) consisting of a lease of assets entered
into in the ordinary course of business of the Company and its
Subsidiaries) consisting of the sale, lease, transfer or other disposition
of assets having a book value at the time of such transaction equal to or
greater than the Maximum Disposition Amount, and any group of related
sales, leases, transfers or other dispositions made within any period of
six consecutive calendar months commencing on or after the Effective Date
shall be treated as one transaction for purposes of determining whether the
same is a Material Asset Disposition, provided, that a sale of any of the
stock of, or any of the assets of, Chrysler First or any subsidiary
thereof, or the sale of any of the stock of, or any of the assets of,
Chrysler Capital, or any subsidiary thereof, shall not constitute a
"Material Asset Disposition".
(b) The Company and its Subsidiaries will not engage in any
business other than the Finance Business, the Finance-Related Insurance
Business and the other businesses in which the Company and its Subsidiaries
are engaged as of the date hereof, and other than businesses in which the
Company or any of its Subsidiaries may be involved in connection with or
related to any workout, liquidation, foreclosure or other realization on or
disposition of assets in which it has a security interest, or any other
exercise of rights or remedies pursuant to a workout in connection with any
financing (whether equity or debt) provided by the Company or any of its
Subsidiaries to any Person.
6.7 Limitation on Liens. (a) The Company will not, and will
not permit any Finance Subsidiary to, create, assume or incur, or suffer to
be created, assumed or incurred or to exist, any Lien in respect of any
property of any character of the Company or such Finance Subsidiary,
whether heretofore or hereafter acquired; excluding, however, from the
operation of this covenant:
(i) Liens on assets of any Finance Subsidiary which is a
Canadian Corporation securing obligations of such Subsidiary;
(ii) any deposit of assets of the Company or any of its Finance
Subsidiaries with any surety company or clerk of any court, or in
escrow, as collateral in connection with, or in lieu of, any bond on
appeal by the Company or any of its Finance Subsidiaries, from any
judgment or decree, or in connection with other proceedings or actions
at law or in equity by or against the Company or any of its Finance
Subsidiaries;
(iii) Liens created by any Finance Subsidiary in favor of the
Company or a wholly-owned Subsidiary securing indebtedness of such
Finance Subsidiary to the Company or a wholly-owned Subsidiary (which
Liens cannot be transferred except to the Company or to another
wholly-owned Subsidiary);
(iv) any deposits to secure public or statutory obligations of
the Company or any of its Finance Subsidiaries, other than any such
deposit made as a result of or in connection with the occurrence of
any of the events described in clause (i), (ii), (iii) or (iv) of
subsection 7(g);
(v) any purchase money Liens in respect of fixed assets or other
physical or real properties heretofore or hereafter acquired by the
Company or any of its Finance Subsidiaries, or any Liens existing in
respect of such property at the time of acquisition thereof; provided,
however, that no such Lien shall extend to or cover any other property
of the Company or such Finance Subsidiary, as the case may be;
(vi) any Liens which are (A) in respect of fixed assets or other
physical properties of a corporation which is not a Finance Subsidiary
as of the date hereof, and (B) in existence at the time such
corporation becomes a Finance Subsidiary;
(vii) the extension, renewal or replacement of any Lien permitted
by paragraphs (i) through (v) above in respect of the same property
theretofore subject thereto or the extension, renewal or replacement
(without increase of principal amount) of the indebtedness secured
thereby;
(viii) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or such
Finance Subsidiary, as the case may be, in accordance with GAAP;
(ix) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business (A) which are not overdue for a period of more than
60 days or (B) which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Finance Subsidiary, as
the case may be, in accordance with GAAP;
(x) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Company or its Finance
Subsidiaries;
(xi) any attachment or judgment lien, unless the judgment it
secures shall not, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 30 days after the expiration of any such
stay;
(xii) Liens granted on assets in connection with leveraged leases
and project financings entered into in the ordinary course of the
Finance Business; and
(xiii) Liens to secure Indebtedness and other obligations of the
Company or any of its Finance Subsidiaries not otherwise permitted by
this subsection 6.7, but only to the extent that the aggregate amount
of Indebtedness and other obligations secured thereby does not at any
time exceed $100,000,000.
(b) The Company will not permit any Domestic Subsidiary that is
not a Finance Subsidiary to create, assume or incur, or suffer to be
created, assumed or incurred or to exist, any Lien in respect of any
property of any character of such Domestic Subsidiary, whether heretofore
or hereafter acquired, excluding, however, from the operation of this
covenant:
(i) Liens on property of such Domestic Subsidiary that would be
permitted under subsection 6.7(a) if such Domestic Subsidiary were a
Finance Subsidiary;
(ii) Liens on property of such Domestic Subsidiary that are
incurred in the ordinary course of the Finance Business or the Real
Estate Business of such Domestic Subsidiary; and
(iii) Liens on any property of such Domestic Subsidiary if such
Domestic Subsidiary is a "single purpose" entity formed for the
purpose of holding title to such property and engages in no activities
other than those related to holding title to such property.
6.8 Multiemployer Plans; etc. (a) The Company will not, and
will not permit any Commonly Controlled Entity to, withdraw from any
Multiemployer Plan if the aggregate withdrawal liabilities under ERISA to
which the Company and all Commonly Controlled Entities would be subject as
a result of such withdrawal (other than withdrawal liabilities in respect
of which adequate reserve has been made by the Company or a Commonly
Controlled Entity) would exceed $10,000,000.
(b) The Company will not merge or consolidate any Plan in
respect of which it is the "employer" as defined in Section 3(5) of ERISA
with any Plan in respect of which Chrysler is the "employer" as so defined.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) the Company shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or to pay any interest on any
Loan hereunder or any fee or other amount within five Business Days
after any such interest, fee or other amount becomes due in accordance
with the terms hereof; or
(b) any representation or warranty made by the Company herein,
or deemed made by the Company pursuant to Section 3 or 4, or which is
contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
prove to have been incorrect in any material respect on or as of the
date made, or deemed made; or
(c) the Company shall default in the observance or performance
of any agreement contained in Section 6; or
(d) the Company shall default in the observance or performance
of any other agreement, covenant or term contained in this Agreement
(including any failure to make any payment required hereunder other
than as described in paragraph (a) above), and such default shall
continue unremedied for a period of 30 days after receipt by the
Company of notice of such default from the Agent; or
(e) the Company or any Significant Subsidiary shall (i) default
in any payment or payments in the aggregate amount of more than
$20,000,000 (or its equivalent in another currency) at any one time on
any of its Indebtedness (other than the Loans), or any guarantee
thereof, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or
(ii) default in the observance or performance of any other agreement
or condition relating to any Indebtedness in the principal amount of
more than $20,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause such Indebtedness to become due prior to its stated
maturity; or
(f) (i) the Company or any of its Significant Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
the Company or any of its Significant Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Company or any of its Significant
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Company or any of its
Significant Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Company or any of
its Significant Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii) or (iii) above; or (v) the
Company or any of its Significant Subsidiaries shall admit in writing
its inability to pay its debts generally as they become due; or
(g) (i) any Person shall engage in any Prohibited Transaction
involving any Plan, (ii) any Accumulated Funding Deficiency, whether
or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings is, in the reasonable
opinion of the Required Banks, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, and, in the case of a
Reportable Event, the continuance of such Reportable Event unremedied
for ten days after notice of such Reportable Event pursuant to Section
4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten days after commencement thereof, as the case may
be, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, or (v) any other event or condition shall occur or
exist with respect to a Single Employer Plan; and in each case in
clauses (i) through (v) above, the Agent shall have notified the
Company that, in the opinion of the Required Banks, such event or
condition, together with all other such events or conditions, if any,
could reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken
as a whole; or
(h) one or more final judgments or decrees shall be entered
against the Company or any of its Significant Subsidiaries involving
in the aggregate a liability (not paid or fully covered by insurance)
of $20,000,000 or more shall have been unpaid for a period of 60 days
and shall not have been stayed; or
(i) Chrysler shall at any time fail to own at least 51% of the
issued and outstanding shares of the common stock of the Company;
then, and in any such event, (a) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Company, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Banks, the Agent
may, or upon the request of the Required Banks, the Agent shall, by notice
to the Company, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Banks, the Agent may, or upon the request of the
Required Banks, the Agent shall, by notice of default to the Company,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as
expressly provided above in this Section 7, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints the Agent as the agent of such Bank under this Agreement, and each
Bank hereby irrevocably authorizes the Agent as agent for such Bank to take
such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Without limiting the foregoing, the Agent may appoint CASC as
its agent to perform the functions of the Agent hereunder relating to the
advancing of funds to the Company and distribution of funds to the Banks
and to perform such other related functions of the Agent hereunder as are
reasonably incidental to such functions.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, CASC) shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct), or (b) responsible in any manner to any
of the Banks for any recitals, statements, representations or warranties
made by the Company or any Subsidiary or any officer thereof contained in
this Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or for any failure of the Company or any
Subsidiary to perform its obligations hereunder. The Agent shall not be
under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or
records of the Company or any Subsidiary.
8.4 Reliance by Agent and CASC. The Agent and CASC shall be
entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent and CASC
may deem and treat the Bank specified in the Register with respect to any
amount owing hereunder as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have
been filed with the Agent in accordance with subsection 9.7. The Agent
shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first receive such advice or concurrence of
the Required Banks (or, if so specified in this Agreement, all of the
Banks) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall, in all cases, be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request
of the Required Banks (or, if so specified in this Agreement, all of the
Banks), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks and all future holders of the
obligations owing by the Company hereunder.
8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to
the Banks, and, if such notice is received from a Bank, the Agent shall
give notice thereof to the Company and each other Bank. Subject to the
proviso contained in subsection 9.1, the Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by the Required Banks (or, if so specified in this Agreement, all of the
Banks); provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event
of Default as it shall deem advisable in the best interests of the Banks.
8.6 Non-Reliance on Agent, Other Banks and CASC. Each Bank
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates (including,
without limitation, CASC) has made any representations or warranties to it
and that no act by the Agent hereafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any representation or
warranty by the Agent to any Bank. Each Bank represents to each of the
Agent and CASC that it has, independently and without reliance upon the
Agent, any other Bank or CASC, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent, any other Bank or
CASC, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports
and other documents expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-
fact or affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent and
CASC (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so), ratably according to the respective
amounts of their respective Commitment Percentages in effect on the date on
which indemnification is sought under this subsection 8.7 (or, if
indemnification is sought after the date upon which the Commitments shall
have terminated, ratably in accordance with such Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Agent or CASC in
any way relating to or arising out of this Agreement or any other documents
contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted by the Agent or CASC under or in
connection with any of the foregoing, provided that no Bank shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's or CASC's gross negligence or
willful misconduct. The agreements in this subsection 8.7 shall survive
the payment of the Loans and all other amounts payable hereunder.
8.8 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Company as though the Agent was not the Agent
hereunder. With respect to its Loans made or renewed by it, the Agent
shall have the same rights and powers under this Agreement as any Bank and
may exercise the same as though it were not the Agent, and the terms "Bank"
and "Banks" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks and the Company, and may be removed at any time
with or without cause by the Required Banks. If the Agent shall resign or
be removed as Agent under this Agreement, then either (a) the Required
Banks shall appoint from among the Banks a successor agent for the Banks,
which successor agent shall be approved by the Company, or (b) if a
successor agent shall not have been so appointed and approved within the
10-day period following the Agent's notice to the Banks or its removal as
Agent, the Agent shall then, with the consent of the Company, appoint a
successor agent who shall serve as Agent until such time, if any, as the
Required Banks appoint, and the Company approves, a successor agent as
provided in (a) above. Upon its appointment pursuant to either clause (a)
or (b) above, such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this
Agreement or any holders of the obligations owing by the Company hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Section 8 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
8.10 The Co-Agents. No Co-Agent in its capacity as such shall
have any rights, duties or responsibilities hereunder, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or otherwise exist against any Co-Agent in its capacity as
Co-Agent.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. With the written consent of the
Required Banks, the Agent and the Company may, from time to time, enter
into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any
manner the rights of the Banks or of the Company hereunder, and with the
written consent of the Required Banks the Agent on behalf of the Banks may
execute and deliver to the Company a written instrument waiving, on such
terms and conditions as the Agent may specify (with such consent) in such
instrument, any of the requirements of this Agreement or any Default or
Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (a) extend
the maturity of any Loan, or reduce the rate or extend the time of payment
of interest thereon, or reduce the principal amount thereof, or reduce the
amount or extend the time of payment of any facility fee hereunder, or
change the amount or terms of any Bank's Commitment, or amend, modify or
waive any provision of this subsection 9.1 or reduce the percentages
specified in the definition of Required Banks, or consent to the assignment
or transfer by the Company of any of its rights and obligations under this
Agreement or amend, modify or waive the provisions of subsection 9.8, in
each case without the prior written consent of each Bank directly affected
thereby; or (b) amend, modify or waive any provision of Section 8 without
the prior written consent of the Agent; or (c) amend, modify or waive any
provision of subsection 8.10 without the prior written consent of each Co-
Agent. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Banks and shall be binding upon the
Company, the Banks, the Agent and all future holders of the obligations
owing by the Company hereunder. In the case of any waiver, the Company,
the Banks and the Agent shall be restored to their former position and
rights hereunder, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereon. No provision of this subsection 9.1 shall limit the
rights of any party hereto pursuant to subsections 2.16, 2.17, 2.18, 2.19,
2.20, 2.21, 9.8 and 9.9.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or by
facsimile transmission or telex and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by
hand or when deposited in the mail, first class or air postage prepaid, or,
in the case of facsimile transmission, when transmitted, receipt
acknowledged, or, in the case of telex notice, when sent, answerback
received, addressed as follows in the case of the Company and the Agent,
and as set forth in its Addendum in the case of the other parties hereto,
or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the obligations owing by the
Company hereunder:
The Company: Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Facsimile: 810-948-3801
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John S. Cannon
Facsimile: 212-270-1469
With copies to: Chemical Bank Agency Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: James Morgan
Telex: 353-006
Answerback: ABSC NYK
Facsimile: 212-622-0002
provided that any notice, request or demand to or upon the Agent pursuant
to subsection 2.2, 2.3, 2.8, 2.9 or 2.12 shall not be effective until
received.
9.3 Clearing Accounts. (a) Each Bank irrevocably authorizes
the Agent and CASC to cause such Bank's Clearing Account to be debited as
contemplated in subsections 2.2 and 2.3 and to cause to be created an
overdraft in such account if the balance in such Bank's Clearing Account on
a particular Borrowing Date is less than the amount of the Loan to be made
by such Bank on such day. In addition each Bank irrevocably authorizes the
Agent and CASC to cause such Bank's Clearing Account to be credited, as
contemplated in subsection 2.15(a), with its ratable share of payments
received by the Agent from the Company. The Clearing Account of each Bank
shall be maintained at its own expense and free of charge to the Agent,
CASC and the Company.
(b) The Agent may at any time in its sole discretion, upon
notice to the Company and the Banks, discontinue the use of ACH procedures
in connection with Loans made pursuant hereto, and the Banks shall
thereafter fund each Loan required to be made by them hereunder by making
available the amount thereof to the Agent for the account of the Company at
the office of the Agent set forth in subsection 9.2 in funds immediately
available to the Agent.
9.4 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or of
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.5 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement.
9.6 Payment of Expenses. The Company agrees:
(a) to pay or reimburse the Agent for all reasonable out-of-
pocket costs and expenses incurred in connection with the preparation
and execution of, and any amendment, supplement or modification to or
waiver under, this Agreement and any other documents prepared in
connection herewith, and the consummation of the transactions
contemplated hereby and the administration of this Agreement,
including, without limitation, the reasonable fees and disbursements
of Simpson Thacher & Bartlett, special counsel to the Agent and the
Banks;
(b) to pay or reimburse each Bank and the Agent for all costs
and expenses (other than legal fees and disbursements) incurred in
connection with the enforcement or preservation of any rights under
this Agreement and any such other documents, and the reasonable fees
and disbursements of one firm of special counsel to the Agent and the
Banks; and
(c) to (i) indemnify each Bank from and against liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than legal fees and
disbursements) of any kind whatsoever (and, with respect to any
proceeding or related proceedings, the reasonable fees and
disbursements of one firm of special counsel to the relevant Banks in
connection with such proceeding(s)) which may at any time (including,
without limitation, at any time following the payment of the Loans) be
imposed on, incurred by or asserted against such Bank in any way
relating to or arising out of this Agreement or any other documents
contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted by such Bank under or in
connection with any of the foregoing, provided that the Company shall
not be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from (x) the ordinary
course administration of this Agreement or such other documents by any
Bank or (y) any Bank's gross negligence or willful misconduct or bad
faith and (ii) pay or reimburse (x) each Bank for any payments made by
such Bank to the Agent or CASC pursuant to the provisions of
subsection 8.7 and (y) the Agent and CASC for any and all liabilities,
expenses or disbursements incurred by any of them which pursuant to
the provisions of subsection 8.7 are the subject of indemnification
payments from the Banks to the extent that the Agent or CASC, for
whatever reason, did not receive such indemnification payments from
any Bank or Banks.
The agreements in this subsection 9.6 shall survive repayment of the Loans
and all other amounts payable hereunder.
9.7 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns except that (a) the Company may not
assign its rights or obligations hereunder without the prior consent of all
of the Banks and (b) no assignment by a Bank of any of its rights or
obligations hereunder shall be effective unless (i) the assignee is a
Commercial Bank (unless otherwise agreed by the Company in its sole
discretion), (ii) the assignee shall have designated in writing to the
Agent an account at the office of a bank that is an ACH member to serve as
such assignee's "Clearing Account" hereunder, (iii) in the event of an
assignment of less than all of such Bank's obligations, (x) the principal
amount of such Bank's obligations so assigned shall be in an aggregate
amount of $10,000,000 or greater and (y) after giving effect to any such
assignment, the transferor Bank and the assignee (in each case together
with any Bank which is an affiliate of such transferor Bank or assignee,
respectively) shall each have obligations hereunder aggregating not less
than $25,000,000 (unless, in each case, at the Company's discretion, a
lesser amount is mutually agreed upon between the Company and such Bank or
assignee, as applicable), (iv) the Company and the Agent shall have
consented to the making of such assignment (which consent in each case
shall not be unreasonably withheld or delayed), (v) the transferor Bank,
the assignee, the Agent and the Company (if its consent to such assignment
is required hereunder) shall have executed and delivered an Assignment and
Acceptance substantially in the form of Exhibit D-1, and (vi) the
transferor Bank shall have paid to the Agent a registration and processing
fee of $2,500 (or such lesser amount as may be agreed to by the Agent);
provided, however, that no consent by the Company shall be required in the
case of assignments to a Commercial Bank controlled by, controlling or
under common control with an assignor Bank or pursuant to a merger or
consolidation of such Bank with another entity or a similar transaction
involving such Bank and provided further, that a Liquidity Facility Bank
may so assign all or a portion of such rights and obligations to a Person
that shall become a Liquidity Facility Bank hereunder only if notice of the
designation of such new Liquidity Facility Bank shall have been delivered
to the Agent prior to such assignment. Each Bank may sell participations
in its Commitment or in all or any part of any Loan made by it hereunder to
a Commercial Bank, in which event the participant shall not have any rights
under this Agreement (the participant's rights against such Bank in respect
of such participation to be those set forth in the agreement executed by
such Bank in favor of the participant thereto) and all amounts payable by
the Company under Section 2 shall be determined as if such Bank had not
sold such participations; provided that (i) the terms of any participation
agreement or certificate relating to any such participation shall prohibit
any subparticipations by such participant; (ii) any such participation
agreement or certificate shall permit the Bank granting such participations
the right to consent to waivers, amendments or supplements to this
Agreement without the consent of such participant except in the case of (x)
waivers of any Default or Event of Default described in Section 7(a), and
(y) any amendment or modification extending the maturity of any Loan, or
reducing the interest rate in respect of any Loan, or reducing any facility
fee, or extending the time of payment of interest on any Loan or of any
facility fee, or reducing the principal amount of any Loan, in each case to
the extent such waiver, amendment or supplement directly affects such
participant and (iii) a participating interest of at least $10,000,000
shall be sold pursuant to any such participation (unless, at the Company's
discretion, a lesser amount is mutually agreed upon between the Company and
such Bank).
(b) Nothing herein shall prohibit any Bank from pledging or
assigning all or any portion of its Loans to any Federal Reserve Bank in
accordance with applicable law. In order to facilitate such pledge or
assignment, the Company hereby agrees that, upon request of any Bank at any
time and from time to time after the Company has made its initial borrowing
hereunder, the Company shall provide to such Bank, at the Company's own
expense, a promissory note, substantially in the form of Exhibit E,
evidencing the Revolving Credit Loans or Liquidity Facility Loans owing to
such Bank.
(c) The Agent shall maintain at its address referred to in
subsection 9.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses
of the Banks, the Commitments of the Banks, and the principal amount of
each Type of Loan owing to each Bank from time to time. The entries in the
Register shall be conclusive, in the absence of clearly demonstrable error,
and the Company, the Agent and the Banks may treat each Person whose name
is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Company or any Bank at any reasonable time and from time
to time upon reasonable prior notice. The Agent shall give prompt written
notice to the Company of the making of any entry in the Register or any
change in any such entry.
9.8 Right of Set-off. Upon (a) the occurrence and during the
continuance of an Event of Default and (b) with the consent of the Required
Banks, each Bank is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank (including,
without limitation, its branches) to or for the credit or the account of
the Company against any and all of the obligations of the Company now or
hereafter existing under this Agreement, irrespective of whether or not
such Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Bank agrees promptly to notify the
Company after any such set-off and application made by such Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Bank under this subsection are
in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Bank may have.
9.9 Adjustments. If any Bank (a "benefitted Bank") shall at any
time receive any payment of all or part of its Revolving Credit Loans or
Liquidity Facility Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in clause (f) of Section
7, or otherwise) in a greater proportion than any such payment to, or any
collateral received by, any other Bank, if any, in respect of such other
Bank's Revolving Credit Loans or Liquidity Facility Loans, as the case may
be, or interest thereon, such benefitted Bank shall purchase for cash from
the other Banks or Liquidity Facility Banks, as the case may be, such
portion of each such other Bank's Revolving Credit Loans or Liquidity
Facility Loans, as the case may be, or shall provide such other Banks or
Liquidity Facility Banks, as the case may be, with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks or Liquidity Facility Banks, as
the case may be; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Bank, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The
Company agrees that each Bank so purchasing a portion of another Bank's
Revolving Credit Loans or Liquidity Facility Loans, as the case may be, may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the
direct holder of such portion.
9.10 New Banks. Subject to the provisions of subsection 9.12,
during the term of this Agreement with the consent of the Company and upon
notification to the Agent, one or more additional Commercial Banks may
become a party to this Agreement by executing a New Bank Supplement hereto
with the Company and the Agent, substantially in the form of Exhibit D-2,
whereupon such Commercial Bank (herein called a "New Bank") shall become a
Bank for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this
Agreement, and Schedule I hereto shall be deemed to be amended to add the
name and Commitment of such New Bank. Effective as of the date on which
any such New Bank becomes a Bank pursuant to the provisions of this
subsection 9.10, the aggregate Commitments shall be increased by the amount
of such New Bank's Commitment. If on the date upon which such New Bank
becomes a Bank pursuant to the provisions of this subsection 9.10, there is
an unpaid principal amount of Revolving Credit Loans, the Company shall
borrow Revolving Credit Loans from such New Bank through the Agent pursuant
to subsection 2.1, in an amount determined by multiplying the amount of
such New Bank's Commitment by a fraction, the numerator of which shall be
the then unpaid principal amount of the Revolving Credit Loans and the
denominator of which shall be the aggregate Commitments of the Banks other
than the New Bank. Notwithstanding anything herein to the contrary, if
there are Eurodollar Loans outstanding, a Commercial Bank that becomes a
New Bank will make Eurodollar Loans to the Company (pro rata according to
its Commitment Percentage) having Interest Periods corresponding to the
then unexpired portions of the respective Interest Periods of such
Eurodollar Loans and bearing interest at a rate equal to the respective
interest rates then applicable to such Eurodollar Loans. The Agent shall
advise the Banks of each addition of a New Bank hereunder, of the amount of
its Commitment and of the amount of any borrowing from it hereunder made
simultaneously upon its addition.
9.11 Increase in Commitments. Subject to the provisions of
subsection 9.12, during the term of this Agreement, with the consent of the
Company and upon notification to the Agent, any Bank may increase the
amount of its Commitment by executing a Commitment Increase Supplement
hereto with the Company and the Agent, substantially in the form of Exhibit
D-3, whereupon such Bank shall be bound by and entitled to the benefits of
this Agreement with respect to the full amount of its Commitment as so
increased, and Schedule I hereto shall be deemed to be amended to add the
increased Commitment of such Bank. Effective as of the date on which any
such Bank increases its Commitment pursuant to the provisions of this
subsection 9.11, the aggregate Commitments shall be increased by the amount
of such Bank's additional Commitment. If on the date upon which such Bank
increases its Commitment pursuant to this subsection 9.11 there is an
unpaid principal amount of Revolving Credit Loans, the Company shall borrow
Revolving Credit Loans from such Bank through the Agent, in an amount
determined by multiplying the amount of the increase in such Bank's
Commitment by a fraction, the numerator of which shall be the then unpaid
principal amount of the Revolving Credit Loans and the denominator of which
shall be the aggregate Commitments of the Banks other than the amount of
the additional Commitment of such Bank. Notwithstanding anything herein to
the contrary, if there are Eurodollar Loans outstanding, a Bank that
increases its Commitment pursuant to this subsection 9.11 will make
Eurodollar Loans to the Company (pro rata according to the amount of the
increase in such Bank's Commitment) having Interest Periods corresponding
to the then unexpired portions of the respective Interest Periods of such
Eurodollar Loans and bearing interest at a rate equal to the respective
interest rates then applicable to such Eurodollar Loans. The Agent shall
advise the Banks of such increase in the Commitment of a Bank and of the
amount of any borrowing from it hereunder made simultaneously upon such
increase.
9.12 Changing Designations of Liquidity Facility Banks. The
Company shall have the right to change the designation of a Bank or
Liquidity Facility Bank to (a) cause a Bank to become a Liquidity Facility
Bank or (b) cause a Liquidity Facility Bank to no longer be a Liquidity
Facility Bank, provided that no such change shall become effective unless
(i) the Bank affected thereby shall have agreed to such change and (ii)
prior written notification thereof shall have been delivered to the Agent.
9.13 Tax Forms. If any Bank which becomes a party to this
Agreement on any day after the date hereof pursuant to subsection 9.7 or
9.10 is organized under the laws of any jurisdiction other than the United
States or any state thereof, such Bank shall, on the date such Person
becomes a Bank, (i) represent to the transferor Bank (if applicable), the
Agent and the Company that under applicable law and treaties no taxes will
be required to be withheld by the Agent, the Company or the transferor Bank
(if applicable) with respect to any payments to be made to such Bank in
respect of the Loans hereunder, (ii) furnish to the transferor Bank (if
applicable), the Agent and the Company either U.S. Internal Revenue Service
Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such Bank
claims entitlement to complete exemption from U.S. federal withholding tax
on all interest payments hereunder) and (iii) agree (for the benefit of the
transferor Bank (if applicable), the Agent and the Company) to provide the
transferor Bank (if applicable), the Agent and the Company a new Form 4224
or Form 1001 upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S.
laws and regulations and amendments duly executed and completed by such
Bank, and to comply from time to time with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.
9.14 Counterparts. This Agreement may be executed by one or more
of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Agent.
9.15 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9.16 Submission to Jurisdiction; Waivers. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding commenced by any party hereto relating to this Agreement,
or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that services of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified with
copies addressed as set forth in subsection 9.2; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
9.17 Integration. This Agreement represents the agreement of
each party with respect to the subject matter hereof and there are no
promises or representations by the Agent or any Bank relative to the
subject matter hereof not reflected herein.
9.18 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
CHEMICAL BANK,
as Agent
By: /s/ Karen Sager
Title: Vice President
CHEMICAL SECURITIES INC.,
as Arranger
By: /s/ David Fox, Jr.
Title: Vice President
Exhibit 10-B
CONFORMED COPY
==============================================================================
FOURTH AMENDED AND RESTATED COMMITMENT
TRANSFER AGREEMENT
Dated as of May 23, 1994
CHRYSLER FINANCIAL CORPORATION,
as Borrower
CHEMICAL BANK, as Agent
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . 15
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS . . . . . . . . . . . . . 15
2.1 The Commitments. . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . . 15
2.3 Repayment of Outstanding Loans . . . . . . . . . . . . . . . . . 16
2.4 Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . 16
2.5 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.6 Minimum Amount of Eurodollar Tranches. . . . . . . . . . . . . . 17
2.7 Interest Rate and Payment Dates. . . . . . . . . . . . . . . . . 17
2.8 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . 18
2.9 Conversion and Continuation Options. . . . . . . . . . . . . . . 18
2.10 Computation of Interest. . . . . . . . . . . . . . . . . . . . . 19
2.11 Inability to Determine Eurodollar Rate . . . . . . . . . . . . . 20
2.12 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . 20
2.13 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.14 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . 21
2.15 Transfer of Eurodollar Loans . . . . . . . . . . . . . . . . . . 22
2.16 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.18 Transferred Commitment . . . . . . . . . . . . . . . . . . . . . 25
2.19 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 25
3.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . 25
3.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.3 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . 26
3.4 Corporate Authorization; No Violation. . . . . . . . . . . . . . 26
3.5 Government Authorization . . . . . . . . . . . . . . . . . . . . 26
3.6 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . 26
3.7 Enforceable Obligations. . . . . . . . . . . . . . . . . . . . . 26
3.8 No Material Litigation . . . . . . . . . . . . . . . . . . . . . 26
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.11 Investment Company Act; Other Regulations. . . . . . . . . . . . 27
3.12 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . 27
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 28
4.1 Conditions to Effectiveness. . . . . . . . . . . . . . . . . . 28
4.2 Conditions to All Loans. . . . . . . . . . . . . . . . . . . . . 28
(a) Representations and Warranties. . . . . . . . . . . . . . . 28
(b) No Default or Event of Default. . . . . . . . . . . . . . . 29
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 29
5.1 Financial Statements, etc. . . . . . . . . . . . . . . . . . . . 29
5.2 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . 30
5.3 Maintenance of Existence and Property. . . . . . . . . . . . . . 30
5.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 31
6.1 Limitation on Indebtedness and Guaranties. . . . . . . . . . . . 31
6.2 Consolidated Tangible Net Worth. . . . . . . . . . . . . . . . . 32
6.3 Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . . . . 32
6.4 Limitation on Transactions with Affiliates . . . . . . . . . . . 33
6.5 Limitation on Amendments to Income Maintenance Agreement . . . . 33
6.6 Limitation on Fundamental Change . . . . . . . . . . . . . . . . 33
6.7 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . 34
6.8 Multiemployer Plans; etc.. . . . . . . . . . . . . . . . . . . . 36
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . 39
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . 39
8.4 Reliance by Agent and CASC . . . . . . . . . . . . . . . . . . . 39
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . 40
8.6 Non-Reliance on Agent, Other Banks and CASC. . . . . . . . . . . 40
8.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 40
8.8 Agent in its Individual Capacity . . . . . . . . . . . . . . . . 41
8.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 41
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 41
9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3 Clearing Accounts. . . . . . . . . . . . . . . . . . . . . . . . 43
9.4 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . 43
9.5 Survival of Representations and Warranties . . . . . . . . . . . 44
9.6 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . 44
9.7 Successors and Assigns; Participations and Assignments . . . . . 45
9.8 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . 46
9.9 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.10 New Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.11 Increase in Commitments. . . . . . . . . . . . . . . . . . . . . 47
9.12 Tax Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.14 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.15 Submission to Jurisdiction; Waivers. . . . . . . . . . . . . . . 48
9.16 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.17 Restatement. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.18 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . 49
<PAGE>
SCHEDULE
Schedule I - Banks
EXHIBITS
Exhibit A-1 - Form of Opinion of Simpson Thacher & Bartlett
Exhibit A-2 - Form of Opinion of General Counsel
Exhibit B - Form of New Bank Supplement
Exhibit C - Form of Addendum
Exhibit D - Chrysler Capital Note Subordination Terms
Exhibit E - Form of Closing Certificate
Exhibit F - Form of Note
<PAGE>
FOURTH AMENDED AND RESTATED COMMITMENT TRANSFER AGREEMENT dated
as of May 23, 1994 among CHRYSLER FINANCIAL CORPORATION, a Michigan
corporation (the "Company"), the several financial institutions parties to
this Agreement (collectively, the "Banks"; individually, a "Bank") and
CHEMICAL BANK, a New York banking corporation ("Chemical"), as agent for
the Banks (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Company, the Agent and the several financial
institutions parties thereto (the "Original Banks") entered into a
Revolving Credit Agreement dated as of November 15, 1987, as amended by
Amendments dated as of February 4, 1988 and September 1, 1989 (the
"Original Credit Agreement"), pursuant to which the Original Banks agreed
to make loans to the Company for its general corporate purposes;
WHEREAS, the Company and the Banks entered into an Amended and
Restated Commitment Transfer Agreement dated as of December 31, 1989 (as
amended, the "Amended and Restated Commitment Transfer Agreement") for the
purpose of making certain amendments to the Original Credit Agreement;
WHEREAS, the Company and the Banks entered into a Second Amended
and Restated Commitment Transfer Agreement dated as of July 29, 1992 (as
amended, the "Second Amended and Restated Commitment Transfer Agreement")
for the purpose of making certain amendments to the Amended and Restated
Commitment Transfer Agreement;
WHEREAS, the Company and the Banks entered into a Third Amended
and Restated Commitment Transfer Agreement dated as of June 30, 1993 (as
amended through the date hereof, the "Third Amended and Restated Commitment
Transfer Agreement") for the purpose of making certain amendments to the
Second Amended and Restated Commitment Transfer Agreement; and
WHEREAS, the Company has requested that the Banks enter into this
Fourth Amended and Restated Commitment Transfer Agreement for the purpose
of making certain amendments to the Third Amended and Restated Commitment
Transfer Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree that from and after
the Effective Date (as hereinafter defined) the Third Amended and Restated
Commitment Transfer Agreement shall be amended and restated in its entirety
as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms defined
in the caption to this Agreement shall have the meanings set forth therein
and the following terms have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Accumulated Funding Deficiency" shall mean any "accumulated
funding deficiency" as defined in Section 302 of ERISA.
"ACH" shall mean an Automated Clearing House.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit C, by which a Bank becomes a party to this Agreement.
"Affected Bank" shall have the meaning set forth in subsection 2.14.
"Affiliate" of any Person, shall mean any other Person that,
directly or indirectly, controls or is controlled by or is under
common control with such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" shall mean this Fourth Amended and Restated
Commitment Transfer Agreement, as the same may be amended, modified or
supplemented from time to time.
"Applicable Base Rate Margin" shall mean, with respect to each
Base Rate Loan at any date, the applicable percentage per annum set
forth below based upon the Status and Utilization on such date
(provided that if the Commitments have been terminated prior to such
date, the Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I, II, III or IV Level V
Status Status
<S> <C> <C>
If Utilization is less
than or equal to 33-1/3%: 0.0000% 0.1250%
If Utilization is
greater than 33-1/3%: 0.0000% 0.2500%
</TABLE>
"Applicable Eurodollar Margin" shall mean, with respect to each
Eurodollar Loan at any date, the applicable percentage per annum set
forth below based upon the Status and Utilization on such date
(provided that if the Commitments have been terminated prior to such
date, the Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
Status Status Status Status Status
<S> <C> <C> <C> <C> <C>
If Utilization is
less than or equal
to 33-1/3%: 0.3125% 0.4000% 0.4000% 0.5000% 0.7500%
If Utilization is
greater than 33-1/3%: 0.4375% 0.5250% 0.5250% 0.6250% 0.8750%
</TABLE>
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most recently
estimated by the Agent as the then current net annual assessment rate
that will be employed in determining amounts payable by Chemical to
the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or any successor) of time deposits made
in Dollars at Chemical's domestic offices.
"Available Transferred Commitment" shall mean, as to any Bank, at
a particular time, an amount equal to the excess, if any, of (a) the
amount of such Bank's Commitment at such time over (b) the aggregate
unpaid principal amount at such time of all Loans made by such Bank
pursuant to subsection 2.1; collectively, as to all the Banks, the
"Available Transferred Commitments".
"Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Effective Federal Funds Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by Chemical as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced; "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate; and "Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Federal Reserve
Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices
of the Federal Reserve Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported for such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York City
time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Agent from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it. If for any reason the Agent shall have determined
(which determination shall be conclusive absent clearly demonstrable
error) that it is unable to ascertain the Base CD Rate or the
Effective Federal Funds Rate or both for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms thereof, the Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first sentence of
this definition, as appropriate, until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to
a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Effective Federal Funds Rate shall be effective on the effective date
of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Effective Federal Funds Rate, respectively.
"Base Rate Loans" shall mean Loans hereunder at such time as they
are made and/or being maintained at a rate of interest based upon the
Base Rate.
"Board" shall mean the Board of Directors of the Company, the
Executive Committee thereof or any other committee consisting of two
or more directors of the Company designated by the Board of Directors
having authority to exercise, when the Board of Directors is not in
session, the powers of the Board of Directors (subject to any
designated limitations) in the management of the business and affairs
of the Company.
"Borrowing Date" shall mean any Business Day specified in a
notice pursuant to subsection 2.2 as a date on which the Company
requests the Banks to make Loans hereunder.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close, except that, when used in connection with a
Eurodollar Loan with respect to which the Eurodollar Rate is
determined based upon the Telerate screen in accordance with the
definition of Eurodollar Rate, "Business Day" shall mean any Business
Day on which dealings in foreign currencies and exchange between banks
may be carried on in London, England and New York, New York.
"Canadian Corporation" shall mean any corporation which (a) is
organized under the laws of Canada or any province of Canada and (b)
conducts substantially all of its business within Canada.
"Capital Base" shall mean, at any date, the sum of (a) the lesser
of (i) Subordinated Debt and (ii) 100% of Consolidated Tangible Net
Worth plus (b) Consolidated Tangible Net Worth.
"Capital Notes" shall mean any notes made by the Company in favor
of Chrysler that are issued for cash at par and are subordinated on
the terms set forth in Exhibit D in right of payment to the Senior
Debt.
"CASC" shall mean Chemical Bank Agency Services Corporation, a
Delaware corporation (and any successor).
"Chrysler" shall mean Chrysler Corporation, a Delaware
corporation.
"Chrysler Agreement" shall mean the Second Amended and Restated
Revolving Credit Agreement dated as of June 30, 1993 among Chrysler
Corporation, the banks parties thereto and Chemical Bank as agent for
such banks, as the same may be amended, modified or supplemented from
time to time.
"Chrysler Capital" shall mean Chrysler Capital Corporation, a
Delaware corporation.
"Chrysler First" shall mean Chrysler First Inc., a Pennsylvania
corporation.
"Clearing Account" shall mean, as to any Bank, the bank account
designated in its Addendum, or such other bank account as such Bank
shall designate in writing to the Agent from time to time, provided
that such other bank account shall be maintained at the office of an
ACH member.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" shall mean, as to any Bank, its obligation to make
Loans to the Company pursuant to subsection 2.1 in the amount referred
to therein, as such amount may be determined from time to time
pursuant to subsection 2.18; collectively, as to all the Banks, the
"Commitments".
"Commitment Percentage" shall mean, as to any Bank at any time,
the percentage of the aggregate Commitments then constituted by such
Bank's Commitment.
"Commitment Period" shall mean the period from and including the
Effective Date (or, in the case of any New Bank, from the date that
such New Bank becomes party to this Agreement as provided in
subsection 9.10) to but not including the Termination Date or such
earlier date as the Commitments shall terminate as provided herein.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Company within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Company and is treated as a single employer under Section
414 of the Code.
"Consolidated Tangible Net Worth" shall mean, at any date, the
amount which would appear in accordance with GAAP on a consolidated
balance sheet of the Company and its Subsidiaries opposite the heading
"total shareholders' investment" (or any similar item) plus the
aggregate unpaid principal amount of the Capital Notes, less the
aggregate net book value (after deducting any reserves applicable
thereto) of all items of the following character which are included in
the consolidated assets of the Company and its Subsidiaries:
(a) franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill,
experimental or organizational expense, and other like
intangibles;
(b) deferred charges and prepaid expenses (other than
prepaid interest, insurance and taxes);
(c) unamortized debt discount and expense;
(d) assets which are pledged or deposited as security for
or for the purpose of paying any obligations, contingent or
otherwise, which are not included in consolidated liabilities;
and
(e) amounts in respect of capital stock, promissory notes
and other securities issued by the Company or a Subsidiary and
held in its treasury.
"Contractual Obligation" shall mean, as to any Person, any
enforceable provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party
or by which it or any of its property is bound.
"D&P" shall mean Duff & Phelps Credit Rating Company and its
successors.
"Default" shall mean any of the events specified in Section 7,
whether or not any requirement for the giving of notice, lapse of
time, or both, or the happening of any other condition, has been
satisfied.
"Dollars" or "$" shall mean lawful currency of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary other than a
Foreign Subsidiary.
"Effective Date" shall mean the date on which the conditions
specified in subsection 4.1 shall be satisfied.
"Effective Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions
between members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average quotations for the day
of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, in the case of any Eurodollar Loan,
with respect to each day during each Interest Period (other than any
seven-day Interest Period) pertaining to such Eurodollar Loan, the
rate of interest determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period, provided, that in the event
that such rate does not appear on Page 3750 of the Telerate Service
(or otherwise on such service), the "Eurodollar Rate" shall be
determined by reference to such other publicly available service for
displaying eurodollar rates as may be agreed upon by the Agent and the
Company. In the absence of such agreement, and in the case of any
seven-day Interest Period pertaining to such Eurodollar Loan, the
"Eurodollar Rate" shall instead be the rate per annum equal to the
average (rounded upward, if necessary, to the nearest 1/100th of 1%)
of the respective rates notified to the Agent by each of the Reference
Banks as the rate at which such Reference Bank is offered Dollar
deposits at or about 10:00 A.M., New York City time, two Business Days
prior to the beginning of the relevant Interest Period, in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Tranche" shall mean and be a collective reference to
Eurodollar Loans having the same Interest Period, whether or not
originally made on the same day.
"Event of Default" shall mean any of the events specified in
Section 7, provided that any requirement for the giving of notice, the
lapse of time, or both, or the happening of any other condition, has
been satisfied.
"Excess Utilization Period" shall mean any Utilization Period
with respect to which the Utilization exceeds 33-1/3%.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System of the United States.
"Final Date" shall mean the later of (a) the last day of the
Commitment Period and (b) the date on which all of the Loans shall
have been paid in full.
"Finance Business" shall mean (a) the small loan, personal
finance, consumer finance or installment credit business (including
the business of making collateral loans secured by credit obligations
or personal property), (b) the sales finance business and the business
of purchasing and selling notes and accounts receivable (whether or
not repayable in installments) and interests therein, (c) the
commercial financing and factoring business as generally conducted,
including the leasing of tangible personal property, and (d) any
business (including, without limitation, securitization and other
receivables-based transactions) related to or conducted in connection
with any business of the character referred to in the foregoing
clauses (a), (b) and (c) other than insurance underwriting.
"Finance-Related Insurance Business" shall mean the business of
(a) insuring articles and merchandise the sale or leasing of which is
financed in the ordinary course of the Finance Business, and (b)
insuring the lives of individuals who are liable for the payment of
the amounts owing on such sales or leases and writing accident and
health insurance on such individuals; provided, however, that Finance-
Related Insurance Business shall also include other insurance business
that is not described in (a) or (b) above to the extent that such
insurance business does not produce at any time aggregate premiums
written (net of reinsurance ceded) by all Subsidiaries in an amount
greater than 50% of the aggregate amount of all premiums written (net
of reinsurance ceded) at such time in all of the insurance business of
such Subsidiaries.
"Finance Subsidiary" shall mean any Domestic Subsidiary that is
engaged primarily in the Finance Business.
"Fitch" shall mean Fitch Investors Service, Inc. and its
successors.
"Foreign Subsidiary" shall mean any Subsidiary that (a) is
organized under the laws of any jurisdiction outside the United States
of America, Puerto Rico and Canada, or (b) conducts the major portion
of its business outside the United States of America, Puerto Rico and
Canada.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time, except that for
the purposes of determining compliance with the covenants set forth in
Section 6, "GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on December 31, 1993 applied
consistently with those used in compiling the financial statements
included in the 1993 Annual Report.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranty" shall mean, as to any Person, (a) any guaranty by such
Person of any indebtedness or other obligation of any other Person
(other than the Company or any Subsidiary), or any assurance with
respect to the financial condition of such other Person (other than
the Company or any Subsidiary), including, without limitation, any
purchase or repurchase agreement, any indemnity or any keepwell, take-
or-pay, through-put or other arrangement having the effect of assuring
or holding harmless any third Person against loss with respect to any
obligation of such other Person (other than the Company or any
Subsidiary) and (b) the face amount of all letters of credit and
acceptances issued for the account of such Person and, without
duplication, all drafts drawn thereunder. For the purposes of this
definition and subsection 6.1, the principal amount of obligations
entitled to the benefits of any Guaranty relating to any transaction
involving the origination of Consumer Finance Receivables or Wholesale
Automobile Receivables by the Company or any Subsidiary for the
account of, or the sale of Consumer Finance Receivables or Wholesale
Automobile Receivables originated by the Company or any Subsidiary to,
any other Person, shall, to the extent such Guaranty is attributable
to the retention by the Company or such Subsidiary of credit risks
relating to such Receivables, be deemed to be limited to the Reserve
Percentage of the outstanding balance of such Receivables as of the
relevant date of determination (the "Reserve Amount"), provided, that
if the maximum amount of recourse to the Company and its Subsidiaries
pursuant to any such Guaranty in respect of such credit risks shall
have been agreed to in writing, the principal amount of such
obligations shall instead be deemed to equal the lesser of (i) 100% of
such maximum amount and (ii) the relevant Reserve Amount.
As used in this definition:
"Consumer Finance Receivables" shall mean Receivables
arising out of the retail sale or lease of passenger automobiles,
light-duty trucks or recreational vehicles and originated in
accordance with the customary credit and collection policies of
the Company and its Subsidiaries with respect to Receivables of
such type generally.
"Wholesale Automobile Receivables" shall mean Receivables
arising out of extensions of credit by the Company and its
Subsidiaries to automobile dealers for the purchase of new
passenger automobiles, light-duty trucks and recreational
vehicles (including such extensions resulting from the purchase
by the Company and its Subsidiaries from Chrysler or any of its
Subsidiaries of receivables from automobile dealers representing
the deferred payment of the purchase price of new passenger
automobiles, light-duty trucks and recreational vehicles
purchased by such dealers from Chrysler or such Subsidiary) and
originated in accordance with the customary credit and collection
policies of the Company and its Subsidiaries with respect to
Receivables of such type generally.
"Reserve Percentage" shall mean, at any date of
determination, (a) with respect to any Consumer Finance
Receivables, an amount equal to five times the average credit
loss experience (expressed as a percentage) of the Company and
its Subsidiaries determined in accordance with GAAP with respect
to Receivables of such type for the period of eight consecutive
fiscal quarters ending on the last day of the most recent fiscal
period as to which financial statements have been delivered (or
are required to have been delivered) pursuant to Section
5.1(a)(i) or (ii), provided, that in no event shall the Reserve
Percentage with respect to any Consumer Finance Receivables be
less than 9.75% and (b) with respect to any Wholesale Automobile
Receivables, an amount equal to five times the average credit
loss experience (expressed as a percentage) of the Company and
its Subsidiaries determined in accordance with GAAP with respect
to Receivables of such type for the period of eight consecutive
fiscal quarters ending on the last day of the most recent fiscal
period as to which financial statements have been delivered (or
are required to have been delivered) pursuant to Section
5.1(a)(i) or (ii), provided, that in no event shall the Reserve
Percentage with respect to any Wholesale Automobile Receivables
be less than 10.50%.
"Income Maintenance Agreement" shall mean the Income Maintenance
Agreement, dated as of December 20, 1968, as amended on April 19,
1971, May 29, 1973, July 1, 1975, June 4, 1976 and March 27, 1986,
between Chrysler and the Company, as the same may be further amended,
modified or supplemented from time to time in accordance with
subsection 6.5.
"Indebtedness" shall mean, as applied to any Person, at any date,
(a) indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services which would appear on a
consolidated balance sheet of such Person (or, in the case of the
Company and its Subsidiaries, the Company) prepared in accordance with
GAAP, (b) obligations of such Person under leases which appear as
capital leases on a consolidated balance sheet of such Person prepared
in accordance with GAAP and (c) any withdrawal obligation of such
Person or any Commonly Controlled Entity thereof to a Multiemployer
Plan.
"Interest Period" shall mean with respect to any Eurodollar
Tranche:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Tranche and ending seven days or one, two, three or
six months thereafter, as selected by the Company in its notice
of borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar
Tranche and ending seven days or one, two, three or six months
thereafter, as selected by the Company by irrevocable notice to
the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto (or, if
no such period is specified, ending one month thereafter);
provided that, the foregoing provisions are subject to the following:
(A) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day;
(B) no Interest Period may be selected by the Company
if such Interest Period would end after the Termination
Date; and
(C) any Interest Period of at least one month's
duration that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
relevant calendar month.
"Level" shall mean any of Level I, Level II, Level III, Level IV
or Level V.
"Level I" shall mean any of the following long-term senior
unsecured debt ratings: A- or better by S&P, A3 or better by Moody's,
A- or better by D&P or A- or better by Fitch.
"Level II" shall mean any of the following long-term senior
unsecured debt ratings: BBB+ by S&P, Baa1 by Moody's, BBB+ by D&P or
BBB+ by Fitch.
"Level III" shall mean any of the following long-term senior
unsecured debt ratings: BBB by S&P, Baa2 by Moody's, BBB by D&P or
BBB by Fitch.
"Level IV" shall mean any of the following long-term senior
unsecured debt ratings: BBB- by S&P, Baa3 by Moody's, BBB- by D&P or
BBB- by Fitch.
"Level V" shall mean any of the following long-term senior
unsecured debt ratings: BB+ or lower (or unrated) by S&P, Ba1 or
lower (or unrated) by Moody's, BB+ or lower (or unrated) by D&P or BB+
or lower (or unrated) by Fitch.
"Lien" shall mean, with respect to any property of any Person,
any mortgage, pledge, hypothecation, encumbrance, lien (statutory or
other), charge or other security interest of any kind in or with
respect to such property (including, without limitation, any
conditional sale or other title retention agreement, and any financing
lease under which such Person is lessee having substantially the same
economic effect as any of the foregoing). It is understood that any
filings, instruments or other documents evidencing the Liens created
pursuant to the Existing Credit Agreement (as defined in the Revolving
Credit Agreement) and the Trust Agreement referred to therein shall
not be deemed to constitute or create "Liens" for the purposes of this
Agreement.
"Loan" shall have the meaning set forth in subsection 2.1(a).
"Material Asset Disposition" shall have the meaning assigned in
subsection 6.6.
"Maximum Disposition Amount" at any date of determination shall
mean the greater of (a) $500,000,000 and (b) an amount equal to 5% of
the book value of the consolidated assets of the Company and its
Subsidiaries as of the last day of the most recent fiscal period as to
which financial statements have been delivered (or are required to
have been delivered) to the Agent pursuant to subsection 5.1(a).
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"New Bank" shall have the meaning set forth in subsection 9.10.
"1993 Annual Report" shall mean the Company's annual report to
stockholders for the fiscal year ended December 31, 1993.
"Non-U.S. Subsidiary" shall mean each Subsidiary other than a
U.S. Subsidiary.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any
successor corporation.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a
trust, an unincorporated association, a joint venture or other entity
or a government or any agency or political subdivision thereof.
"Plan" shall mean any pension plan which is covered by Title IV
of ERISA and in respect of which the Company or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) of ERISA.
"Prohibited Transaction" shall mean any "prohibited transaction"
as defined in Section 406 of ERISA or Section 4975 of the Code.
"Rating Agencies" shall mean the collective reference to D&P,
Fitch, Moody's and S&P.
"Real Estate Business" shall mean the acquisition, development,
leasing, financing, management, maintenance and disposition of real
property, including, without limitation, automotive dealership
facilities and dealership site control arrangements.
"Receivables" shall mean, at any date, any and all amounts owing
to the Company and its Subsidiaries on account of receivables arising
out of their conduct of their business.
"Reference Banks" shall mean Chemical, NBD Bank, N.A., Royal Bank
of Canada and Swiss Bank Corporation; provided, that, for the purposes
of determining the Eurodollar Rate with respect to any seven-day
Interest Period, Chemical shall be the sole Reference Bank.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Required Banks" shall mean, at any date, Banks having at least
51% of the aggregate amount of the Commitments at such date or, if the
Commitments have been terminated, Banks holding at least 51% of the
outstanding principal amount of the Loans hereunder.
"Requirement of Law" shall mean, as to any Person, the
Certificate of Incorporation and By-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of
its property is subject.
"Responsible Officer" shall mean, at any particular time, the
Chairman of the Board, the President, the chief financial officer, the
Vice President - Corporate Finance and Development, the Treasurer or
the Controller of the Company.
"Revolving Credit Agreement" shall mean (i) the Revolving Credit
Agreement, dated as of May 23, 1994, among the Company, the financial
institutions from time to time parties thereto, the Co-Agents parties
thereto, Chemical Securities Inc., as arranger, and Chemical Bank, as
agent, as amended, supplemented, or otherwise modified from time to
time or (ii) if such Revolving Credit Agreement is refinanced,
refunded or otherwise replaced by another bank revolving credit
agreement, such agreement, as amended, supplemented or otherwise
modified from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw-Hill, and its successors.
"Senior Debt" shall mean, at any date, all Indebtedness of the
Company except Subordinated Debt and Capital Notes.
"Significant Subsidiary" shall mean at the time of any
determination thereof (a) any Finance Subsidiary and (b) any other
Subsidiary the assets of which constitute at least 5% of the
consolidated assets of the Company and its Subsidiaries as stated on
the consolidated financial statements of the Company and its
Subsidiaries for the most recently ended fiscal quarter of the
Company, provided, that the term "Significant Subsidiary" shall not
include any Special Purpose Subsidiary.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan.
"Special Purpose Subsidiary" shall mean any Subsidiary created
for the sole purpose of purchasing assets from the Company or any
Finance Subsidiary with the intention and for the purpose of using
such assets in a securitization transaction.
"Status" shall mean, as to the Company, the existence of Level I
Status, Level II Status, Level III Status, Level IV Status or Level V
Status, as the case may be. For the purposes of this definition,
"Status" will be set at the lowest Level assigned to the Company by
any Rating Agency, unless only one Rating Agency has assigned such
Level to the Company, in which case the Company's Status will be set
at the second lowest Level assigned to the Company by any Rating
Agency.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum
applicable reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established
by the Federal Reserve Board and any other banking authority to which
Chemical is subject with respect to the Base CD Rate (as such term is
used in the definition of "Base Rate"), for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities
approximately equal to three months. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"Subordinated Debt" shall mean, at any date, all Indebtedness of
the Company which is subordinated to Senior Debt at least to the
extent that its 6-7/8% Subordinated Notes due 1987 were subordinated
to Senior Debt as of April 9, 1980, excluding Capital Notes.
"Subsidiary" shall mean any corporation of which the Company or
one or more Subsidiaries or the Company and one or more Subsidiaries
shall at the time own shares of any class or classes (however
designated) having voting power for the election of at least a
majority of the members of the board of directors (or other governing
body) of such corporation.
"Termination Date" shall mean as to any Bank the "Termination
Date" as defined in the Chrysler Agreement.
"Transferred Commitment" shall have the meaning set forth in
subsection 2.18.
"Type" shall mean, as to any Loan hereunder, its nature as a Base
Rate Loan or a Eurodollar Loan.
"U.S. Subsidiary" shall mean each Domestic Subsidiary which is
not a Canadian Corporation.
"Utilization" shall mean, for any Utilization Period, the
percentage equivalent of a fraction (a) the numerator of which is the
average daily principal amount of Loans outstanding during such
Utilization Period and (b) the denominator of which is the average
daily amount of the aggregate Commitments of all Banks during such
Utilization Period.
"Utilization Period" shall mean (a) each fiscal quarter of the
Company and (b) any portion of a fiscal quarter of the Company ending
on the Final Date.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein, and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Company
and its Subsidiaries not defined in subsection 1.1, and accounting terms
partly defined in subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "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, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS
2.1 The Commitments. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make loans ("Loans") to the Company
from time to time during the Commitment Period in an aggregate principal
amount at any one time outstanding not to exceed such Bank's Transferred
Commitment at such time set opposite such Bank's name in the most recent
effective notice delivered by Chrysler pursuant to subsection 2.17 of the
Chrysler Agreement. During the Commitment Period, the Company may use such
Commitment by borrowing, prepaying or repaying the Loans of such Bank, in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) Loans hereunder may be Base Rate Loans or Eurodollar Loans,
or part Base Rate Loans and part Eurodollar Loans, as determined by the
Company and notified to the Agent in accordance with subsection 2.2,
provided that no Eurodollar Loans shall be made after the date which is
seven days prior to the Termination Date.
2.2 Procedure for Borrowing. (a) The Company may borrow under
the Commitments during the Commitment Period on any Business Day, provided
that the Company shall give the Agent irrevocable notice (which notice must
be received by the Agent prior to 10:00 A.M., New York City time, (i) three
Business Days prior to the requested Borrowing Date, if all or any part of
the requested Loans are to be initially Eurodollar Loans, and (ii) one
Business Day prior to the requested Borrowing Date, otherwise) specifying
(A) the amount to be borrowed, (B) the requested Borrowing Date, (C)
whether the borrowing is to be a Eurodollar Loan or a Base Rate Loan or a
combination thereof, and (D) if such borrowing is to be entirely or partly
a Eurodollar Loan, the length of the Interest Period for such Eurodollar
Loan. Upon receipt of such notice, the Agent shall promptly notify each
Bank thereof. Not later than 2:00 P.M., New York City time, on the
Borrowing Date specified in such notice, each Bank shall (subject to
subsection 9.3(b)) deposit in its Clearing Account an amount in immediately
available funds equal to the amount of the Loan to be made by such Bank.
The Agent shall, pursuant to subsection 9.3(a), cause such amount to be
withdrawn from each such Clearing Account and shall make the aggregate
amount so withdrawn available to the Company by depositing the proceeds
thereof in the account of the Company with the Agent on the date such Loans
are made for transmittal by the Agent upon the Company's request. Each
borrowing pursuant to the Commitments shall be in an aggregate principal
amount of the lesser of (i) $25,000,000 or an integral multiple of
$1,000,000 in excess thereof or (ii) the then Available Transferred
Commitments, provided that, with respect to any borrowing of Eurodollar
Loans, after giving effect thereto, subsection 2.6 shall not have been
contravened.
(b) Unless the Agent shall have received notice from a Bank
prior to a Borrowing Date that such Bank will not make available to the
Agent such Bank's ratable portion of such borrowing through such Bank's
Clearing Account, the Agent may assume that such Bank has made such portion
available to the Agent through such Bank's Clearing Account on the date of
such borrowing in accordance with subsection 2.2(a) and the Agent may, in
reliance upon such assumption, make available to the Company on such date a
corresponding amount. If the Agent does, in such circumstances, make
available to the Company such amount, such Bank shall within three Business
Days following such Borrowing Date make such ratable portion available to
the Agent, together with interest thereon for each day from and including
such Borrowing Date that such ratable portion was not made available, to
but excluding the date such Bank makes its share of such borrowing
available to the Agent, at the Effective Federal Funds Rate. If such
amount is so made available, such payment to the Agent shall constitute
such Bank's Loan on such Borrowing Date for all purposes of this Agreement.
If such amount is not so made available to the Agent, then the Agent shall
notify the Company of such failure and on the fourth Business Day following
such Borrowing Date, the Company shall pay to the Agent such ratable
portion, together with interest thereon for each day that the Company had
the use of such ratable portion at the Effective Federal Funds Rate.
Nothing contained in this subsection 2.2(b) shall relieve any Bank which
has failed to make available its ratable portion of any borrowing hereunder
from its obligation to do so in accordance with the terms hereof.
(c) The failure of any Bank to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan on such Borrowing Date, but no Bank shall
be responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on such Borrowing Date.
2.3 Repayment of Outstanding Loans. The Company shall repay all
outstanding Loans (together with all accrued unpaid interest thereon) on
the Termination Date.
2.4 Evidence of Debt. (a) Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Company to the appropriate lending office of such Bank
resulting from each Loan made by such lending office of such Bank from time
to time, including the amounts of principal and interest payable and paid
to such lending office of such Bank from time to time under this Agreement.
(b) The Agent shall maintain the Register pursuant to subsection
9.7(f), and a subaccount for each Bank, in which Register and subaccounts
(taken together) shall be recorded (i) the amount of each Loan made
hereunder, the Type of each Loan made and the Interest Period (if any)
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Company to each Bank
hereunder and (iii) the amount of any sum received by the Agent hereunder
from the Company and each Bank's share thereof.
(c) The entries made in the Register and accounts maintained
pursuant to paragraphs (a) and (b) of this subsection 2.4 shall, to the
extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Company therein recorded;
provided, however, that the failure of any Bank or the Agent to maintain
such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Company to
repay (with applicable interest) the Loans made to the Company by such Bank
in accordance with the terms of this Agreement.
2.5 Prepayments. The Company may, at any time and from time to
time, prepay the Loans hereunder, in whole or in part, without premium or
penalty, upon prior notice to the Agent (which notice must be received by
the Agent prior to 10:00 A.M., New York City time (i) three Business Days
prior to the repayment date in the case of Eurodollar Loans and (ii) one
Business Day prior to the repayment date otherwise) specifying the date and
amount of prepayment, and whether the prepayment is of Eurodollar Loans,
Base Rate Loans or a combination thereof, and, if a combination thereof,
the amount allocable to each, provided that, each prepayment of Eurodollar
Loans on a day other than the last day of the related Interest Period shall
require the payment of any amounts payable by the Company pursuant to
subsection 2.16. Upon receipt of any such notice, the Agent shall
promptly notify each Bank thereof. Any such notice shall be irrevocable
and the payment amount specified in such notice shall be due and payable on
the date specified, together with accrued interest to such date on the
amount prepaid. Partial prepayments shall be in an aggregate principal
amount of $25,000,000 or a multiple of $1,000,000 in excess thereof, and
after giving effect thereto subsection 2.6 shall not have been contravened.
2.6 Minimum Amount of Eurodollar Tranches. All borrowings,
payments, prepayments, continuations and conversions hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising any Eurodollar Tranche shall not be less than $50,000,000.
2.7 Interest Rate and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period therefor on
the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period in accordance with the
terms hereof plus the Applicable Eurodollar Margin.
(b) The Base Rate Loans shall bear interest for each day on the
unpaid principal amount thereof, at a rate per annum equal to the Base Rate
determined for such day plus the Applicable Base Rate Margin in effect for
such day.
(c) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum which is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions
of this subsection 2.7 plus 2% or (y) in the case of any overdue interest
or other amount, the rate described in subsection 2.7(b) plus 2%, in each
case from the date of such non-payment to (but excluding) the date on which
such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears (i) with respect to
Eurodollar Loans having an Interest Period of three months or less, on the
last day of such Interest Period, (ii) with respect to Eurodollar Loans
having an Interest Period longer than three months, on each day which is
three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period, (iii) with
respect to Base Rate Loans, on the last day of each March, June, September
and December, and (iv) with respect to all Loans, upon each repayment,
prepayment or conversion thereof; provided that interest accruing pursuant
to paragraph (c) of this subsection shall be payable on demand. The amount
of interest on any Loans to be paid on any date as specified above shall in
each case be determined under the assumption that the Utilization for the
Utilization Period(s) during which such interest accrued was less than 33-
1/3%. On the first Business Day following the last day of each Excess
Utilization Period, the Company shall pay to the Agent, for the benefit of
the Banks, an additional amount of interest equal to the excess (if any) of
(i) the amount of interest which accrued during such Utilization Period
after giving effect to the actual Utilization for such Utilization Period
(whether or not such accrued interest was actually payable during such
Utilization Period) over (ii) the amount of interest which would have
accrued during such Utilization Period if the Utilization during such
Utilization Period had been less than 33-1/3%.
2.8 Mandatory Repayments. The Company, without notice or
demand, shall immediately repay the Loans hereunder to the extent that the
aggregate amount thereof exceeds the Commitments from time to time in
effect.
2.9 Conversion and Continuation Options. (a) The Company may
elect from time to time to convert Eurodollar Loans to Base Rate Loans, by
giving the Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto.
The Company may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Bank thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided herein,
provided that (i) no Base Rate Loan may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the Agent has
or the Required Banks have determined in its or their sole discretion that
such conversion is not appropriate, (ii) any such conversion may only be
made if, after giving effect thereto, subsection 2.6 shall not have been
contravened and (iii) no Base Rate Loan may be converted into a Eurodollar
Loan after the date that is seven days prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving irrevocable notice to the Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in
subsection 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is continuing and the Agent
has or the Required Banks have determined in its or their sole discretion
that such continuation is not appropriate, (ii) if, after giving effect
thereto, subsection 2.6 would be contravened or (iii) after the date that
is seven days prior to the Termination Date and provided, further, that if
the Company shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period.
2.10 Computation of Interest. (a) Interest (other than
interest calculated on the basis of the Prime Rate) shall be calculated on
the basis of a 360-day year, for the actual days elapsed. Interest
calculated on the basis of the Prime Rate shall be calculated on the basis
of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Agent shall, as soon as practicable, notify the Company and
the Banks of each determination of the Eurodollar Rate with respect to
Eurodollar Loans. Any change in the interest rate in respect of a Loan
resulting from a change in the Base Rate, the Applicable Base Rate Margin
or the Applicable Eurodollar Margin shall become effective as of the
opening of business on the day on which a change in the Base Rate shall
become effective or such Applicable Base Rate Margin or Applicable
Eurodollar Margin changes as provided herein, as the case may be. The
Agent shall notify the Company and the Banks of the effective date and the
amount of each such change in the Base Rate.
(b) Each determination, pursuant to and in accordance with any
provision of this Agreement, of an interest rate applicable to a Eurodollar
Loan for any Interest Period by the Agent, and each determination by a
Reference Bank of a rate with respect to a Eurodollar Loan for any Interest
Period to be notified to the Agent pursuant to the definition of
"Eurodollar Rate" shall be conclusive and binding on the Company and the
Banks in the absence of manifest error. The Agent shall, at the request of
the Company, deliver to the Company a statement showing any quotations
given by the Reference Banks and the computations used by the Agent in
determining any interest rate pursuant to subsection 2.7(a).
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments), or, as the case may
be, Loans made by it hereunder are assigned, or prepaid or repaid
(otherwise than on the ratable prepayment or repayment of the Loans among
the Banks) for any reason whatsoever, such Reference Bank shall thereupon
cease to be a Reference Bank and, if as a result of the foregoing, there
shall be only one Reference Bank remaining, then the Agent (after
consultation with the Company and the Banks) shall, as soon as practicable
thereafter, by notice to the Company and the Banks, designate another Bank
that is willing to act as a Reference Bank so that there shall at all times
be at least two Reference Banks. In acting to so designate another Bank to
serve as a Reference Bank, the Agent will use its best efforts to ensure
that one Reference Bank will, at all times, be a Bank that has its
headquarters office located outside the United States.
(d) If any of the Reference Banks shall be unable or shall
otherwise fail to provide notice of a rate to the Agent upon its request
with respect to a Eurodollar Loan, the Eurodollar Rate shall be determined
on the basis of rates provided in notices of the remaining Reference Banks.
2.11 Inability to Determine Eurodollar Rate. In the event that
(a) the Agent determines (which determination shall be conclusive and
binding upon the Company) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate in respect of any Eurodollar Loans, or (b)
the Required Banks determine (which determination shall be conclusive and
binding upon the Company) and shall notify the Agent that the rates of
interest referred to in the definition of "Eurodollar Rate" as the basis
upon which the rate of interest for Eurodollar Loans is to be determined do
not adequately cover the cost to the Banks of making or maintaining
Eurodollar Loans, in each case with respect to proposed Loans that the
Company has requested to be made as a Eurodollar Loan, the Agent shall
forthwith give facsimile transmission or other written notice of such
determination to the Company and the Banks at least one Business Day prior
to the requested Borrowing Date for such Eurodollar Loan. If such notice
is given, any requested borrowing of a Eurodollar Loan shall be made as a
Base Rate Loan. Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing
(except borrowings pursuant to subsection 2.13) by the Company from the
Banks and any reduction of the amount of the Commitments of the Banks
hereunder (except for the reduction or termination of a particular Bank's
Commitment pursuant to subsection 2.17) shall be made pro rata according to
the amounts of the then existing Commitments. Each payment (including each
prepayment) by the Company on account of principal and interest (except for
payments to a particular Bank pursuant to subsection 2.13, 2.14, 2.16, or
2.17), shall be made on a pro rata basis according to the amounts of the
then outstanding Loans of the Banks hereunder. All payments (including
prepayments) by the Company shall be made without setoff or counterclaim to
the Agent for the account of the Banks at the office of the Agent referred
to in subsection 9.2 in Dollars and in immediately available funds. The
Agent shall promptly distribute such payments to each Bank entitled to
receive a portion thereof by causing such Bank's portion of such payment to
be deposited in such Bank's Clearing Account. If any payment hereunder
(other than a payment in respect of a Eurodollar Loan) becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into
another calendar month in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(b) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Banks hereunder that
the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due to such
Bank. If and to the extent the Company shall not have so made such payment
in full to the Agent, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon,
for each day from and including the date such amount is distributed to such
Bank to but excluding the date such Bank repays such amount to the Agent at
the Effective Federal Funds Rate for each such day. Nothing contained in
this subsection 2.12(b) shall relieve the Company from its obligations to
make payments on all amounts due hereunder in accordance with the terms
hereof.
2.13 Illegality. Notwithstanding any other provision herein, if
any law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Bank
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Bank hereunder to make Eurodollar Loans shall
forthwith be cancelled and (b) such Bank's Loans then outstanding as
Eurodollar Loans, if any, shall, if required by law and if such Bank so
requests, be converted automatically to Base Rate Loans on the date
specified by such Bank in such notice. To the extent that such affected
Eurodollar Loans are made as (or converted into) Base Rate Loans, all
payments of principal which would otherwise be applied to such Eurodollar
Loans shall be applied instead to such Bank's Base Rate Loans. The Company
hereby agrees promptly to pay any Bank, upon its demand, any additional
amounts necessary to compensate such Bank for any costs incurred by such
Bank in making any conversion in accordance with this subsection 2.13,
including, but not limited to, any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its Eurodollar
Loans hereunder (such Bank's notice of such costs, as certified to the
Company through the Agent, to be conclusive absent manifest error).
2.14 Increased Costs. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority enacted or made subsequent to
the date hereof:
(i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank; or
(ii) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
of making, or maintaining advances or extensions of credit or to reduce any
amounts receivable hereunder (such increase in cost or reduction in amounts
receivable, "Increased Costs") then, in any such case, the Company shall
promptly pay to the Agent for the account of such Bank, upon the written
demand of such Bank to the Company (with a copy to the Agent), so long as
such Increased Costs are not otherwise included in the amounts required to
be paid to such Bank pursuant to subsection 2.13, 2.14(b), 2.16, or 2.17,
any additional amounts necessary to compensate such Bank for such Increased
Costs which such Bank deems to be material as determined by such Bank with
respect to its Eurodollar Loans. If a Bank becomes entitled to claim any
additional amounts pursuant to this subsection 2.14(a), it shall promptly
notify the Company, through the Agent, of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by a Bank, through the Agent,
to the Company shall be conclusive in the absence of manifest error.
(b) Upon notice from any Affected Bank (as hereinafter defined),
the Company shall pay to the Agent for the account of such Affected Bank an
additional amount for each Eurodollar Loan of such Affected Bank, payable
on the last day of the Interest Period with respect thereto, equal to
P X [[R / (1.00 - r)] - R] X [T / 360]
Where P = the principal amount of such Eurodollar Loan of such Bank;
R = the Eurodollar Rate (expressed as a decimal) for such Interest
Period;
T = the number of days in such Interest Period during which such Bank
was an "Affected Bank"; and
r = the aggregate of rates (expressed as a decimal) of reserve
requirements current on the date two Business Days prior to the
beginning of such Interest Period (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any
regulations of the Federal Reserve Board or other Governmental
Authority having jurisdiction with respect thereto, as now and
from time to time hereafter in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of the
Federal Reserve Board) maintained by a member bank of the Federal
Reserve System.
The term "Affected Bank" shall mean any Bank party to this
Agreement that is (i) organized under the laws of the United States or any
State thereof or (ii) a bank organized under laws other than those of the
United States of America or a State thereof that is funding its Eurodollar
Loans through a branch or agency located in the United States of America.
Each Bank agrees to notify the Agent (A) by appropriate notification on its
Addendum in the case of each original Bank party hereto and (B) in the case
of each New Bank, and each Assignee (as defined in the Chrysler Agreement)
that is not already a Bank, upon its becoming a party hereto, whether or
not it is an Affected Bank, and of any subsequent change of status,
disclosing the effective date of such change.
2.15 Transfer of Eurodollar Loans. Upon the occurrence of any
of the events specified in subsection 2.13 or 2.14(a), each Bank whose
Eurodollar Loans are affected by any such event agrees that it will
transfer its Eurodollar Loans affected by any such event to another branch
office (or, if such Bank so elects, to an affiliate) of such Bank, provided
that such transfer shall be made only if such Bank shall have determined in
good faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (a) on the basis of existing
circumstances, such transfer will avoid such events and will not result in
any additional costs, liabilities or expenses to such Bank or to the
Company and (b) such transfer is otherwise consistent with the interests of
such Bank.
2.16 Indemnity. The Company agrees to indemnify each Bank and
to hold such Bank harmless from all losses or expenses (including, but not
limited to, any such loss or expense arising from interest or fees payable
by such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder, but excluding loss of the Applicable Eurodollar
Margin) which such Bank may sustain or incur as a consequence of (a)
failure by the Company in making any payment when due (whether by
acceleration or otherwise) of the principal amount of or interest on the
Eurodollar Loans of such Bank, (b) failure by the Company in making a
borrowing of Eurodollar Loans, or a conversion into or continuation of
Eurodollar Loans, after the Company has given a notice requesting or
accepting the same in accordance with the provisions of this Agreement, (c)
failure by the Company in making any prepayment after the Company has given
a notice in accordance with subsection 2.5 or (d) a prepayment of a
Eurodollar Loan on a day that is not the last day of the Interest Period
with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued
on the amount so prepaid, or not so borrowed, converted or continued, for
the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the relevant Interest Period (or
proposed Interest Period), in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable
Eurodollar Margin) over (ii) the amount of interest (as reasonably
determined by such Bank) which would have accrued to such Bank on such
amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. The agreements in this
subsection 2.16 shall survive the payment of the Loans and all other
amounts payable hereunder.
2.17 Taxes. (a) In the event that the adoption of any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to any Bank under this Agreement, upon notice by
such Bank to the Company (with a copy to the Agent) to the effect that (i)
as a result of the adoption of such law, rule, regulation, treaty or
directive or a change therein or in the interpretation thereof, Taxes are
being withheld or deducted from amounts payable to such Bank under this
Agreement and (ii) such Bank has taken all action required to be taken by
it to avoid the imposition of such Taxes pursuant to paragraph (c) of this
subsection 2.17 prior to demanding indemnification under this paragraph
(a), the Company will pay to the Agent for the account of such Bank
additional amounts so that such additional amounts, together with amounts
otherwise payable under this Agreement, will yield to such Bank, after
deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, the amount stated to be payable under this
Agreement. The term "Taxes" shall mean all net income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
imposed, levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein), excluding,
with respect to any Bank, net income and franchise taxes imposed with
respect to net income of any country (or any political subdivision or
taxing authority thereof or therein) where such Bank is organized or, in
respect of such Bank's Eurodollar Loans, by the country (or any political
subdivision or tax authority thereof or therein) where such Bank's
Eurodollar Loans are booked and, in respect of such Bank's Base Rate Loans,
by the country (or any political subdivision or tax authority thereof or
therein) where such Bank's Base Rate Loans are booked. If the Company
fails to pay any Taxes when due following notification by any Bank as
provided above, the Company shall indemnify such Bank for any incremental
taxes, interest or penalties that may become payable by any Bank as a
result of any such failure by the Company to make such payment. The
Company may, upon payment by the Company to any Bank claiming
indemnification under this paragraph (a) of any amount payable by the
Company to such Bank, elect by not less than four Business Days' prior
written notice to such Bank to terminate the Commitment of such Bank and
prepay the Loans of such Bank outstanding hereunder on the next day upon
which a prepayment may be made pursuant to subsection 2.5.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to
the Company and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or any successor applicable
form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or
W-9 or any successor form. Each such Bank also agrees to deliver to the
Company and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Company,
and such extensions or renewals thereof as may reasonably be requested by
the Company or the Agent, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Bank
from duly completing and delivering any such form with respect to it and
such Bank so advises the Company and the Agent. Such Bank shall certify
(i) in the case of Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or
W-9, that it is entitled to an exemption from United States backup
withholding tax.
(c) No Bank may request indemnification for any Taxes from the
Company under paragraph (a) of this subsection 2.17 to the extent that such
Taxes would have been avoided or reduced by such Bank's transfer of its
Loans affected by such event to another office of such Bank (or to an
affiliate of such Bank), by such Bank's properly claiming the benefit of
any exemption from or reduction of such Taxes (whether provided by statute,
treaty or otherwise) including, without limitation, by delivering the forms
required by paragraph (b) of this subsection 2.17, or by such Bank's taking
any other action which in its judgment is reasonable to avoid or reduce
such Taxes, provided that such Bank shall not be required to (i) take any
action which in the reasonable judgment of such Bank could directly or
indirectly result in any increased cost or expense or in any loss of
opportunity to such Bank unless the Company shall have provided to such
Bank indemnity or reimbursement therefor in form and substance reasonably
satisfactory to such Bank or (ii) claim or apply any tax credit against
such Taxes.
(d) Within 30 days after the payment by the Company of any
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
any Bank under this Agreement, and irrespective of whether such Bank is
entitled to demand indemnification in respect thereof under paragraph (a)
above, the Company will furnish to such Bank (with a copy to the Agent),
the original or a certified copy of a receipt evidencing payment thereof.
2.18 Transferred Commitment. (a) The Company and each Bank
agree that Chrysler may by giving four days' notice to the Agent, each Bank
and the Company (which notice shall, upon receipt by the Agent supersede
and cancel all prior notices hereunder), consent to the transfer to and
borrowing by the Company hereunder of such portion of the Available
Company/CFC Commitments (as such term is defined in the Chrysler Agreement)
as may be specified in such notice (as to each Bank, its "Transferred
Commitment"; collectively for all the Banks, the "Transferred
Commitments"). As of the Effective Date, the Transferred Commitments shall
be zero, unless Chrysler shall have delivered a notice pursuant to the
foregoing sentence at least four days prior to the Effective Date. Each
notice given pursuant to this subsection shall indicate the total
Transferred Commitments and as to each Bank, its pro rata Transferred
Commitment.
(b) The Company also agrees that Chrysler may, by giving thirty
days' written notice to the Agent, each Bank and the Company, withdraw any
consent to the transfer to and borrowing by the Company given in accordance
with subsection 2.18(a) in respect of any portion of the Transferred
Commitments not utilized by the Company as of the date of such notice.
2.19 Use of Proceeds. The proceeds of the Loans hereunder shall
be used by the Company for general corporate purposes.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to
make the Loans herein provided for, the Company hereby represents and
warrants to each Bank that:
3.1 Financial Condition. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 1993 and the related
consolidated statements of net earnings and cash flows for the fiscal year
ended on such date, certified by Deloitte & Touche, copies of which have
been delivered to each Bank, present fairly the consolidated financial
position of the Company and its Subsidiaries as at such date, and the
consolidated results of their operations and cash flows for the fiscal year
then ended. The unaudited consolidated balance sheet of the Company and
its Subsidiaries as at March 31, 1994 and the related consolidated
statements of net earnings and cash flows for the three-month period ended
on such date, certified by a Responsible Officer, copies of which have been
delivered to each Bank, present fairly the consolidated financial condition
of the Company and its Subsidiaries as at such date, and the consolidated
results of their operations for the three-month period then ended (subject
to normal year-end audit adjustments). Such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. As at March 31, 1994, neither the Company nor any of
its Subsidiaries had any asset, liability, contingent obligation, liability
for taxes, long-term lease or unusual forward or long-term commitment
material to the financial condition of the Company and its Subsidiaries
taken as a whole, which was not reflected in the foregoing statements or in
the notes thereto.
3.2 No Change. Between December 31, 1993 and the Effective
Date, there has been no material adverse change in the business, operations
or financial condition of the Company and its Subsidiaries taken as a
whole.
3.3 Corporate Existence. The Company (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Michigan, and (b) is duly qualified as a foreign corporation to do
business and is in good standing in each of the jurisdictions in which the
character of the properties owned or held under lease by it or the nature
of business transacted by it makes such qualification necessary, except in
the case of this clause (b) to the extent that the failure to be so
qualified or in good standing would not have a material adverse effect on
the business, operations or financial condition of the Company and its
Subsidiaries taken as a whole.
3.4 Corporate Authorization; No Violation. The execution,
delivery and performance by the Company of this Agreement are within the
corporate powers of the Company, have been duly authorized by all necessary
corporate action, and do not contravene any Requirement of Law or
Contractual Obligation of the Company, except to the extent that such
contravention would not have a material adverse effect on the business,
operations or financial condition of the Company and its Subsidiaries taken
as a whole or on the ability of the Company to fulfill its obligations
under this Agreement or on the rights and remedies of the Agent and the
Banks hereunder.
3.5 Government Authorization. No authorization or approval or
other action by, and no notice to or filing with, any Governmental
Authority is required to be obtained or made by the Company for the due
execution, delivery and performance by the Company of this Agreement.
3.6 Federal Regulations. Neither the Company nor any of its
Subsidiaries is principally engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U, T, G or X issued by the Federal Reserve Board), and no
proceeds of any borrowing hereunder will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
3.7 Enforceable Obligations. This Agreement has been duly
executed and delivered on behalf of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by principles of equity, whether considered
in a proceeding in equity or at law.
3.8 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company
or any of its Subsidiaries or against any of its or their respective
properties or revenues, in which there is a reasonable likelihood of an
adverse determination (a) with respect to this Agreement or any of the
transactions contemplated hereby, if such adverse determination would have
a material adverse effect on the ability of the Company to fulfill its
obligations under this Agreement or on the rights and remedies of the Agent
and the Banks hereunder or (b) which would, if adversely determined, have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole.
3.9 Taxes. Each of the Company and its Subsidiaries has filed
or caused to be filed all material tax returns which to the knowledge of
the Company are required to be filed, and has paid all material taxes shown
to be due and payable on said returns or on any assessments made against it
or any of its property and all other taxes, fees and other charges imposed
on it or any of its property by any Governmental Authority (other than
those the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP, if any, have been provided on the books of the
Company or its Subsidiaries, as the case may be).
3.10 ERISA. No Prohibited Transaction or Accumulated Funding
Deficiency (other than those that have been waived by the Internal Revenue
Service) has occurred since July 1, 1974 with respect to any Plan and no
Reportable Event has occurred since July 1, 1974 with respect to any Plan
which could in either case subject the Company or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole. The
projected benefit obligations with respect to all benefits, both vested and
nonvested, under all Single Employer Plans (based on the most recently
available actuarial information and computed in accordance with Statement
of Accounting Standards No. 87) maintained by the Company or a Commonly
Controlled Entity did not exceed, at December 31, 1993, the fair value of
the assets of such Plans by more than $2,500,000,000.
3.11 Investment Company Act; Other Regulations. The Company is
not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. The Company is not subject to regulation under any Federal or
state statute or regulation which limits its ability to incur Indebtedness.
3.12 Ownership of Property; Liens. The Company and its U.S.
Subsidiaries have good title in fee simple to or valid leasehold interests
in their respective property that is material to the operation of their
respective businesses, subject to defects in title and leasehold and other
interests which are not material to the business, operations and financial
condition of the Company and its Subsidiaries taken as a whole, and none of
such property is subject to any Lien other than Liens excepted under
subsection 6.7.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Addenda. (i) This Agreement
shall have been executed and delivered by a duly authorized officer of
each of the Company and the Agent and (ii) the Agent shall have
received an executed Addendum (or a copy thereof by facsimile
transmission) from each Person listed on Schedule I.
(b) Closing Certificate. The Agent shall have received a
certificate of the Company, dated the Effective Date, substantially in
the form of Exhibit E, with appropriate insertions, satisfactory in
form and substance to the Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of the Company,
and attaching the documents referred to in subsection 4.1(c) and (d).
(c) Corporate Proceedings of the Company. The Agent shall have
received a copy of the resolutions, in form and substance satisfactory
to the Agent, of the Board of Directors of the Company (or a duly
authorized committee thereof) authorizing (i) the execution, delivery
and performance of this Agreement and (ii) the borrowings contemplated
hereunder.
(d) Corporate Documents. The Agent shall have received true and
complete copies of the certificate of incorporation and by-laws of the
Company.
(e) Legal Opinions. The Agent shall have received the following
executed legal opinions, with a copy for each Bank:
(i) the executed legal opinion of Simpson Thacher &
Bartlett, counsel to the Agent, substantially in the form of
Exhibit A-1; and
(ii) the executed legal opinion of Allan L. Ronquillo,
Esq., General Counsel of the Company, substantially in the form
of Exhibit A-2.
The Agent shall notify the Banks of the Effective Date promptly after the
occurrence thereof.
4.2 Conditions to All Loans. The obligation of each Bank to
make any Loan on or after the Effective Date to be made by it hereunder is
subject to the satisfaction of the conditions precedent described in
clauses (a) and (b) below:
(a) Representations and Warranties. The representations and
warranties made by the Company herein shall be correct in all material
respects on and as of the Borrowing Date for such Loan as if made on
and as of such date, except for any such representations or warranties
which relate solely to an earlier date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such Borrowing Date
or after giving effect to the Loans to be made on such Borrowing Date.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company as of the date of each such
borrowing that the conditions in this Section 4 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan made hereunder remains outstanding
and unpaid or any other amount is owing to any Bank or the Agent hereunder:
5.1 Financial Statements, etc. (a) The Company will furnish to
each Bank:
(i) as soon as available and in any event within 60 days after
the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company, copies of financial statements of the
Company and its Subsidiaries consisting of, at a minimum, balance
sheets of the Company and its Subsidiaries on a consolidated basis as
of the end of such quarterly accounting period, and related statements
of net earnings and cash flows for the portion of such fiscal year
ended with the last day of such quarterly accounting period, all in
reasonable detail (and, without limiting the generality of this
paragraph (a)(i), setting forth, therein or in a separate certificate,
as a separate item, the amount of interest expense during such period)
and prepared and certified (subject to year-end audit adjustments) by
a Responsible Officer and stating in comparative form the respective
figures for the corresponding date and period in the previous fiscal
year;
(ii) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company, copies of financial
statements of the Company and its Subsidiaries consisting of, at a
minimum, balance sheets of the Company and its Subsidiaries on a
consolidated basis as of the end of such fiscal year, and related
statements of net earnings and cash flows for such fiscal year, all in
reasonable detail (and, without limiting the generality of this
paragraph (a)(ii), setting forth, therein or in a separate
certificate, as a separate item, the amount of interest expense during
such period) and certified by independent public accountants of
nationally recognized standing selected by the Company and stating in
comparative form the respective figures as of the end of and for the
previous fiscal year;
(iii) concurrently with the financial statements for each
quarterly accounting period and for each fiscal year of the Company
furnished pursuant to paragraphs (a)(i) and (a)(ii) of this subsection
5.1, (A) a certificate of a Responsible Officer stating that, based on
an examination which in the opinion of the signer is sufficient to
enable him to make an informed statement, the Company and its
Subsidiaries have performed and observed all of, and neither the
Company nor any of its Subsidiaries is in default in the performance
or observance of any of, the terms, covenants, agreements and
conditions of this Agreement or, if the Company or any of its
Subsidiaries shall be in default, specifying all such defaults and the
nature thereof, of which the signer of such certificate may have
knowledge, and (B) an analysis prepared and certified by a Responsible
Officer of the covenants contained in subsections 6.1, 6.2 and 6.3
containing all information necessary for determining compliance by the
Company with each such covenant; and
(iv) such other information relating to the affairs of the
Company and its Subsidiaries as any Bank through the Agent may from
time to time reasonably request.
(b) Upon written request by any Bank through the Agent, the
Company will furnish to such Bank copies of (i) all such reports of the
type a publicly held corporation would generally make available to its
stockholders as the Company shall make available to Chrysler, (ii) all such
proxy statements, financial statements and reports as any Subsidiary shall
send or make available generally to its stockholders other than the
Company, and (iii) all regular and periodic reports which the Company or
any Subsidiary may be required to file with the Securities and Exchange
Commission or any similar or corresponding government department,
commission, board, bureau or agency, domestic or foreign, or with any
securities exchange.
5.2 Payment of Obligations. The Company will, and will cause
each Subsidiary to, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Company or its Subsidiaries, as the case
may be, and except for delinquent obligations which do not materially
adversely affect the financial condition of the Company and its
Subsidiaries taken as a whole.
5.3 Maintenance of Existence and Property. The Company will,
and will cause each Subsidiary to, preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable in
the normal conduct of its business, except for rights, privileges and
franchises the loss of which would not in the aggregate in the reasonable
business judgment of the Company have a material adverse effect on the
business, operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole, and except as otherwise
permitted by subsection 6.6; and keep all property useful and necessary in
its business in good working order and condition.
5.4 Notices. The Company will promptly give notice to the Agent
(which shall notify the Banks) (a) of the occurrence of any Default or
Event of Default, (b) of any event of default under any material instrument
or other agreement of the Company or any of its Finance Subsidiaries (and
in the case of a notice under this clause (b) or the foregoing clause (a),
such notice shall be accompanied by a certificate of a Responsible Officer
specifying the nature of such event, the period of existence thereof, and
the action that the Company or the relevant Finance Subsidiary proposes to
take with respect thereto), (c) of any litigation, proceeding,
investigation or dispute which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority or any other Person
which might have a materially adverse effect upon the business, operations,
assets or condition, financial or otherwise, of the Company or any of its
Subsidiaries, (d) of any change in the ownership by Chrysler of shares of
capital stock of the Company, and (e) of the occurrence or existence of any
of the following events or conditions, as soon as possible and in any event
within 45 days after the Company knows or should have known thereof: (i)
the occurrence of any Reportable Event with respect to any Single Employer
Plan (other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC pursuant to the regulations issued under ERISA), or (ii)
the institution of proceedings or the taking of any other action by the
PBGC or the Company or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Single Employer Plan, and in
addition to such notice, deliver to the Agent whichever of the following
may be applicable: (A) a certificate of a Responsible Officer setting
forth details as to such Reportable Event and the action that the Company
or Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to PBGC
that such Plan is to be terminated, as the case may be.
SECTION 6. NEGATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan made hereunder remains outstanding
and unpaid or any other amount is owing to any Bank or the Agent hereunder:
6.1 Limitation on Indebtedness and Guaranties. The Company will
not, and will not permit any Subsidiary to, create, assume or incur, or
become, remain or be liable on any Indebtedness or Guaranty other than
(i) in the case of the Company,
(A) Senior Debt or Guaranties of the Company to the extent
permitted by the proviso to this subsection 6.1;
(B) Subordinated Debt, and
(C) Capital Notes; and
(ii) in the case of any Subsidiary (other than any Finance
Subsidiary which is a U.S. Subsidiary), Indebtedness and Guaranties of
such Subsidiary to the extent permitted by the proviso to this
subsection 6.1;
provided, however, that the Company will not permit the sum, without double
counting, of (x) the aggregate outstanding principal amount of Senior Debt
and of Indebtedness of Subsidiaries and (y) the aggregate outstanding
principal amount of obligations entitled to the benefits of any Guaranty by
the Company or any Subsidiary, in each case as of the last day of any
calendar month, to exceed 650% of the Capital Base as of such last day (or
675% of the Capital Base as of the last day of any three consecutive
calendar months immediately succeeding six consecutive calendar months in
which such aggregate outstanding principal amount did not exceed 650% of
the Capital Base as of the last day of each such month).
6.2 Consolidated Tangible Net Worth. The Company will not
permit Consolidated Tangible Net Worth to be less than $1,500,000,000.
6.3 Fixed Charges Coverage Ratio. The Company will not permit
its "net earnings available for fixed charges" to be less than 110% of its
"fixed charges" for any fiscal year of the Company, or for the portion of
any fiscal year of the Company ending with the last day of each calendar
quarter therein. For the purposes of this subsection 6.3, "net earnings
available for fixed charges" and "fixed charges" shall be determined for
the Company and for the Company and its Subsidiaries on a consolidated
basis.
For the purposes of this subsection 6.3:
(a) "Net earnings available for fixed charges" shall mean net
income after deducting operating and maintenance expenses, taxes other
than federal, state and other income taxes, except to the extent
stated below in the case of consolidated subsidiaries, depreciation
and depletion, but excluding extraordinary nonrecurring items of
income or expense appearing in the regular consolidated financial
statements of the Company.
(b) "Fixed charges" shall mean interest on debt, amortization of
debt discount, and rentals for leased properties, except rentals under
leases having a term of one year or less.
(c) In determining net earnings and fixed charges on a
consolidated basis, all intercompany items and the portions of
earnings allocable to minority interests in consolidated subsidiaries
shall be eliminated, provision for or refund of income taxes of
consolidated subsidiaries in which the Company owns directly or
indirectly less than ninety percent of all classes of voting stock
shall be deducted or added, and fixed charges shall include fixed
charges and preferred dividends of consolidated subsidiaries that are
not intercompany items.
(d) Earnings attributable to assets or institutions acquired by
merger, consolidation, reorganization, succession, organization,
purchase or otherwise may be included for that part of the test period
which precedes such acquisition, provided that (i) if less than
substantially all assets of any other institution (or all or less than
all assets of any other type of business enterprise) is acquired, such
earnings may be included to the extent they are certified by an
independent accountant to be attributable to such assets and (ii) if
an institution (or substantially all of its assets) is acquired, such
earnings may be included if they are included in financial statements
of such institution prepared under generally accepted accounting
principles. Fixed charges and preferred dividends for the period of
such inclusion shall either include any additional fixed charges and
preferred dividends properly attributable to such acquisition as
certified by an independent accountant, or be the fixed charges and
preferred dividends with respect to debt and stock outstanding
immediately after such acquisition.
6.4 Limitation on Transactions with Affiliates. The Company
will not, and will not permit any Subsidiary to, engage in any transaction
with an Affiliate (other than the Company and its Subsidiaries) on terms
substantially less favorable to the Company or such Subsidiary than would
be obtainable at the time in comparable transactions of the Company or such
Subsidiary with Persons not Affiliates.
6.5 Limitation on Amendments to Income Maintenance Agreement.
The Company will not amend, modify, terminate or grant any waiver under the
Income Maintenance Agreement, provided that the Company may enter into a
waiver, amendment or modification of the Income Maintenance Agreement which
is solely for the purposes of (a) extending the term thereof or relaxing or
lessening the restrictions on, or duties of, the Company or any of its
Subsidiaries thereunder or (b) conforming the provisions thereof relating
to the fixed charge coverage ratio to the provisions of subsection 6.3.
6.6 Limitation on Fundamental Change. (a) The Company will
not, nor will it permit any Subsidiary to, merge or consolidate with or
into any other Person, nor will the Company or any Subsidiary enter into
any Material Asset Disposition (as hereinafter defined) except that:
(i) the Company may merge or consolidate with or into any other
Person, provided that (A) the Company shall be the continuing or
surviving corporation, and (B) immediately after such merger or
consolidation, no Default or Event of Default shall have occurred and
be continuing;
(ii) any Subsidiary may merge or consolidate (A) with or into the
Company (provided that the Company shall be the continuing or
surviving corporation), (B) with or into any one or more wholly-owned
Subsidiaries (provided that a wholly-owned Subsidiary shall be the
continuing or surviving corporation), (C) with or into any other
Person, if such Subsidiary shall be the continuing or surviving
corporation, shall continue to be a Subsidiary of the Company and
immediately after such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing, or (D) with or into any
other Person, if the disposition of the stock of such Subsidiary by
its parent corporation does not constitute a Material Asset
Disposition; and
(iii) any Subsidiary may enter into any Material Asset Disposition
by which its assets are transferred to the Company or a wholly-owned
Subsidiary.
For purposes of this subsection 6.6, the term "Material Asset
Disposition" shall mean any transaction (not including a transaction (1) by
which a Lien is created, which is permitted by subsection 6.7, (2)
consisting of a sale of Receivables, or any interest therein, by the
Company or its Subsidiaries or (3) consisting of a lease of assets entered
into in the ordinary course of business of the Company and its
Subsidiaries) consisting of the sale, lease, transfer or other disposition
of assets having a book value at the time of such transaction equal to or
greater than the Maximum Disposition Amount, and any group of related
sales, leases, transfers or other dispositions made within any period of
six consecutive calendar months commencing on or after the Effective Date
shall be treated as one transaction for purposes of determining whether the
same is a Material Asset Disposition, provided, that a sale of any of the
stock of, or any of the assets of, Chrysler First or any subsidiary
thereof, or the sale of any of the stock of, or any of the assets of,
Chrysler Capital, or any subsidiary thereof, shall not constitute a
"Material Asset Disposition".
(b) The Company and its Subsidiaries will not engage in any
business other than the Finance Business, the Finance-Related Insurance
Business and the other businesses in which the Company and its Subsidiaries
are engaged as of the date hereof, and other than businesses in which the
Company or any of its Subsidiaries may be involved in connection with or
related to any workout, liquidation, foreclosure or other realization on or
disposition of assets in which it has a security interest, or any other
exercise of rights or remedies pursuant to a workout in connection with any
financing (whether equity or debt) provided by the Company or any of its
Subsidiaries to any Person.
6.7 Limitation on Liens. (a) The Company will not, and will
not permit any Finance Subsidiary to, create, assume or incur, or suffer to
be created, assumed or incurred or to exist, any Lien in respect of any
property of any character of the Company or such Finance Subsidiary,
whether heretofore or hereafter acquired; excluding, however, from the
operation of this covenant:
(i) Liens on assets of any Finance Subsidiary which is a
Canadian Corporation securing obligations of such Subsidiary;
(ii) any deposit of assets of the Company or any of its Finance
Subsidiaries with any surety company or clerk of any court, or in
escrow, as collateral in connection with, or in lieu of, any bond on
appeal by the Company or any of its Finance Subsidiaries, from any
judgment or decree, or in connection with other proceedings or actions
at law or in equity by or against the Company or any of its Finance
Subsidiaries;
(iii) Liens created by any Finance Subsidiary in favor of the
Company or a wholly-owned Subsidiary securing indebtedness of such
Finance Subsidiary to the Company or a wholly-owned Subsidiary (which
Liens cannot be transferred except to the Company or to another
wholly-owned Subsidiary);
(iv) any deposits to secure public or statutory obligations of
the Company or any of its Finance Subsidiaries, other than any such
deposit made as a result of or in connection with the occurrence of
any of the events described in clause (i), (ii), (iii) or (iv) of
subsection 7(g);
(v) any purchase money Liens in respect of fixed assets or other
physical or real properties heretofore or hereafter acquired by the
Company or any of its Finance Subsidiaries, or any Liens existing in
respect of such property at the time of acquisition thereof; provided,
however, that no such Lien shall extend to or cover any other property
of the Company or such Finance Subsidiary, as the case may be;
(vi) any Liens which are (A) in respect of fixed assets or other
physical properties of a corporation which is not a Finance Subsidiary
as of the date hereof, and (B) in existence at the time such
corporation becomes a Finance Subsidiary;
(vii) the extension, renewal or replacement of any Lien permitted
by paragraphs (i) through (v) above in respect of the same property
theretofore subject thereto or the extension, renewal or replacement
(without increase of principal amount) of the indebtedness secured
thereby;
(viii) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or such
Finance Subsidiary, as the case may be, in accordance with GAAP;
(ix) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business (A) which are not overdue for a period of
more than 60 days or (B) which are being contested in good faith and
by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Company or such Finance Subsidiary,
as the case may be, in accordance with GAAP;
(x) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Company or its Finance
Subsidiaries;
(xi) any attachment or judgment lien, unless the judgment it
secures shall not, within 30 days after the entry thereof have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 30 days after the expiration of any such
stay;
(xii) Liens granted on assets in connection with leveraged leases
and project financings entered into in the ordinary course of the
Finance Business; and
(xiii) Liens to secure Indebtedness and other obligations of the
Company or any of its Finance Subsidiaries not otherwise permitted by
this subsection 6.7, but only to the extent that the aggregate amount
of Indebtedness and other obligations secured thereby does not at any
time exceed $100,000,000.
(b) The Company will not permit any Domestic Subsidiary that is
not a Finance Subsidiary to create, assume or incur, or suffer to be
created, assumed or incurred or to exist, any Lien in respect of any
property of any character of such Domestic Subsidiary, whether heretofore
or hereafter acquired, excluding, however, from the operation of this
covenant:
(i) Liens on property of such Domestic Subsidiary that would be
permitted under subsection 6.7(a) if such Domestic Subsidiary were a
Finance Subsidiary;
(ii) Liens on property of such Domestic Subsidiary that are
incurred in the ordinary course of the Finance Business or the Real
Estate Business of such Domestic Subsidiary; and
(iii) Liens on any property of such Domestic Subsidiary if such
Domestic Subsidiary is a "single purpose" entity formed for the
purpose of holding title to such property and engages in no activities
other than those related to holding title to such property.
6.8 Multiemployer Plans; etc. (a) The Company will not, and
will not permit any Commonly Controlled Entity to, withdraw from any
Multiemployer Plan if the aggregate withdrawal liabilities under ERISA to
which the Company and all Commonly Controlled Entities would be subject as
a result of such withdrawal (other than withdrawal liabilities in respect
of which adequate reserve has been made by the Company or a Commonly
Controlled Entity) would exceed $10,000,000.
(b) The Company will not merge or consolidate any Plan in
respect of which it is the "employer" as defined in Section 3(5) of ERISA
with any Plan in respect of which Chrysler is the "employer" as so defined.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) the Company shall fail to pay any principal of any Loan made
hereunder when due in accordance with the terms hereof; or to pay any
interest on any Loan made hereunder or any other amount payable
hereunder within five Business Days after any such interest or other
amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made by the Company herein,
or deemed made by the Company pursuant to Section 3 or 4, or contained
in any certificate, document or financial or other statement furnished
at any time under or in connection with this Agreement shall prove to
have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) the Company shall default in the observance or performance
of any agreement contained in Section 6; or
(d) the Company shall default in the observance or performance
of any other agreement, covenant or term contained in this Agreement
(including any failure to make any payment required hereunder other
than as described in paragraph (a) above), and such default shall
continue unremedied for a period of 30 days after receipt by the
Company of notice of such default from the Agent; or
(e) the Company or any Significant Subsidiary shall (i) default
in any payment or payments in the aggregate amount of more than
$20,000,000 (or its equivalent in another currency) at any one time on
any of its Indebtedness (other than the Loans made hereunder), or any
guarantee thereof, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or
(ii) default in the observance or performance of any other agreement
or condition relating to any Indebtedness in the principal amount of
more than $20,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause such Indebtedness to become due prior to its stated
maturity; or
(f) (i) the Company or any of its Significant Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
the Company or any of its Significant Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Company or any of its Significant
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Company or any of its
Significant Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Company or any of
its Significant Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii) or (iii) above; or (v) the
Company or any of its Significant Subsidiaries shall admit in writing
its inability to pay its debts generally as they become due; or
(g) (i) any Person shall engage in any Prohibited Transaction
involving any Plan, (ii) any Accumulated Funding Deficiency, whether
or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings is, in the reasonable
opinion of the Required Banks, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, and, in the case of a
Reportable Event, the continuance of such Reportable Event unremedied
for ten days after notice of such Reportable Event pursuant to Section
4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten days after commencement thereof, as the case may
be, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, or (v) any other event or condition shall occur or
exist with respect to a Single Employer Plan; and in each case in
clauses (i) through (v) above, the Agent shall have notified the
Company that, in the opinion of the Required Banks, such event or
condition, together with all other such events or conditions, if any,
could reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken
as a whole; or
(h) one or more final judgments or decrees shall be entered
against the Company or any of its Significant Subsidiaries involving
in the aggregate a liability (not paid or fully covered by insurance)
of $20,000,000 or more, shall have been unpaid for a period of 60 days
and shall not have been stayed; or
(i) Chrysler shall at any time fail to own at least 51% of the
issued and outstanding shares of the common stock of the Company;
then, and in any such event, (a) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Company, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (b) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Banks, the
Agent may, or upon the request of the Required Banks, the Agent shall, by
notice to the Company, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Banks, the Agent may, or upon the request of the
Required Banks, the Agent shall, by notice of default to the Company,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as
expressly provided above in this Section 7, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Chemical as the Agent of such Bank under this Agreement, and each
Bank hereby irrevocably authorizes Chemical as Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Without limiting the foregoing, the Agent may appoint CASC as
its agent to perform the functions of the Agent hereunder relating to the
advancing of funds to the Company and distribution of funds to the Banks
and to perform such other related functions of the Agent hereunder as are
reasonably incidental to such functions.
8.3 Exculpatory Provisions. Neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, CASC) shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct), or (b) responsible in any manner to any
of the Banks for any recitals, statements, representations or warranties
made by the Company or any officer thereof contained in this Agreement or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or for any failure of the Company to perform its obligations
hereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of the Company.
8.4 Reliance by Agent and CASC. The Agent and CASC shall be
entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent and CASC
may deem and treat the Bank specified in the Register with respect to any
amount owing hereunder as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have
been filed with the Agent in accordance with subsection 9.7. The Agent
shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first receive such advice or concurrence of
the Required Banks (or, if so specified in this Agreement, all of the
Banks) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall, in all cases, be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request
of the Required Banks (or, if so specified in this Agreement, all of the
Banks), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks and all future holders of the
obligations owing by the Company hereunder.
8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
unless the Agent has received notice from a Bank or the Company referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks,
and, if such notice is received from a Bank, the Agent shall give notice
thereof to the Company and each other Bank. Subject to the proviso
contained in the first sentence of subsection 9.1, the Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks (or, if so specified in this
Agreement, all of the Banks), provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Banks.
8.6 Non-Reliance on Agent, Other Banks and CASC. Each Bank
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates (including,
without limitation, CASC) has made any representations or warranties to it
and that no act by the Agent hereafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any representation or
warranty by the Agent to any Bank. Each Bank represents to the Agent and
CASC that it has, independently and without reliance upon the Agent, any
other Bank or CASC, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent, any other Bank or
CASC, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports
and other documents expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-
fact or affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent and
CASC (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so), ratably according to the respective
amounts of their respective Commitment Percentages in effect on the date on
which indemnification is sought under this subsection 8.7 (or, if
indemnification is sought after the date upon which the Commitments shall
have terminated, ratably in accordance with such Commitment Percentages
immediately prior to such date) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Loans made hereunder) be imposed on, incurred by or asserted against the
Agent or CASC in any way relating to or arising out of this Agreement or
any other documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the
Agent or CASC under or in connection with any of the foregoing, provided
that no Bank shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's or
CASC's gross negligence or willful misconduct. The agreements in this
subsection 8.7 shall survive the payment of the Loans made hereunder and
all other amounts payable hereunder.
8.8 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Company as though the Agent were not the
Agent hereunder. With respect to its Loans made or renewed by it, the
Agent shall have the same rights and powers under this Agreement as any
Bank and may exercise the same as though it were not the Agent and the
terms "Bank" and "Banks" shall include the Agent in its individual
capacity.
8.9 Successor Agent. The Agent may resign as Agent, upon 10
days' notice to the Banks and the Company, and may be removed at any time
with or without cause by the Required Banks. If the Agent shall resign or
be removed as Agent under this Agreement, then either (a) the Required
Banks shall appoint from among the Banks a successor agent for the Banks,
which successor agent shall be approved by the Company, or (b) if a
successor agent shall not have been so appointed and approved within the
ten-day period following the Agent's notice to the Banks or its removal as
Agent, the Agent shall then, with the consent of the Company, appoint a
successor agent who shall serve as Agent until such time, if any, as the
Required Banks appoint, and the Company approves, a successor agent as
provided in (a) above. Upon its appointment pursuant to either clause (a)
or (b) above, such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this
Agreement or any holders of the obligations owing by the Company hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions
of this Section 8 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. With the written consent of the
Required Banks, the Agent and the Company may, from time to time, enter
into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any
manner the rights of the Banks or of the Company hereunder, and with the
consent of the Required Banks, the Agent on behalf of the Banks may execute
and deliver to the Company a written instrument waiving, on such terms and
conditions as the Agent may specify (with such consent) in such instrument,
any of the requirements of this Agreement or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall (a) extend the maturity of
any Loan, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof, or change the amount or
terms of any Bank's Commitment, or amend, modify or waive any provision of
this subsection 9.1 or reduce the percentage specified in the definition of
Required Banks, or consent to the assignment or transfer by the Company of
any of its rights and obligations under this Agreement or amend, modify or
waive the provisions of subsection 9.8, in each case without the prior
written consent of each Bank directly affected thereby, or (b) amend,
modify or waive any provision of Section 8 without the prior written
consent of the Agent. Each Bank hereby consents to the inclusion in this
Agreement of each and every amendment, revision, addition, change, waiver
or other modification to Section 5, Section 6 and/or the definitions of
"Applicable Base Rate Margin", "Applicable Eurodollar Margin", "Base Rate",
"Eurodollar Rate" and "Status" (including each defined term referred to in
the definition of "Status") of the Revolving Credit Agreement made after
the Effective Date (except to the extent relating to any provision
contained in such Sections on the Effective Date as to which there is no
comparable provision herein on the Effective Date) and each and every such
amendment, revision, addition, change, waiver or other modification thereof
is hereby incorporated, as in effect from time to time, into this Agreement
with the same effect as if fully set forth in Section 5, Section 6 and/or
the definitions of "Applicable Base Rate Margin", "Applicable Eurodollar
Margin", "Base Rate", "Eurodollar Rate" and "Status" (including each
defined term referred to in the definition of "Status") of this Agreement,
as appropriate, provided that for purposes of this Agreement if the
Revolving Credit Agreement is terminated such Sections 5 and 6 and such
definitions of "Applicable Base Rate Margin", "Applicable Eurodollar
Margin", "Base Rate" and "Eurodollar Rate" shall remain in effect for
purposes of this Agreement in the form in which they shall be in effect on
the date of such termination; provided, further, that for purposes of this
Agreement if the Revolving Credit Agreement is amended so as to remove the
covenant set forth in subsection 6.7 of the Revolving Credit Agreement,
subsection 6.7 hereof shall not be so amended, and if any provision of
subsection 6.7 of the Revolving Credit Agreement is amended or waived so as
to grant to the financial institutions under the Revolving Credit Agreement
a Lien on any assets of the Company or its Subsidiaries, the obligations of
the Company hereunder shall be secured, and the Company shall take such
action and execute such security documents as the Agent may reasonably
request to further effect the security of such obligations, equally and
ratably with its obligations to the financial institutions under the
Revolving Credit Agreement. The Company will advise the Agent promptly of
any amendment to or termination of the Revolving Credit Agreement. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Company, the
Banks, the Agent and all future holders of the obligations owing by the
Company hereunder. In the case of any waiver, the Company, the Banks and
the Agent shall be restored to their former position and rights hereunder
and any Default or Event of Default waived shall be deemed to be cured and
not continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon. No
provision of this subsection 9.1 shall limit the rights of any party hereto
pursuant to subsections 2.13, 2.14, 2.15, 2.16, 2.17, 9.8 and 9.9.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or by
telecopy and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand or when deposited in
the mail, first class or air postage prepaid, or, in the case of telecopied
notice, when telecopied, receipt acknowledged, addressed as follows in the
case of the Company and the Agent, and as set forth in its Addendum in the
case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders
of the obligations owing by the Company hereunder:
The Company: Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telecopy: 810-948-3801
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John S. Cannon
Telecopy: 212-270-1469
With Copies
to: Chemical Bank Agency
Services Corporation
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: James Morgan
Telecopy: 212-622-0002
provided that any notice, request or demand to or upon the Agent pursuant
to subsection 2.2, 2.4, 2.18, or 8.5 shall not be effective until received.
9.3 Clearing Accounts. (a) Each Bank irrevocably authorizes
the Agent and CASC to cause such Bank's Clearing Account to be debited as
contemplated in subsection 2.2 and to cause to be created an overdraft in
such account if the balance in such Bank's Clearing Account on a particular
Borrowing Date is less than the amount of the Loan to be made by such Bank
on such day. In addition each Bank irrevocably authorizes the Agent and
CASC to cause such Bank's Clearing Account to be credited, as contemplated
in subsection 2.12(a), with its ratable share of payments received by the
Agent from the Company. The Clearing Account of each Bank shall be
maintained at its own expense and free of charge to the Agent, CASC and the
Company.
(b) The Agent may at any time in its sole discretion, upon
notice to the Company and the Banks, discontinue the use of ACH procedures
in connection with Loans made pursuant hereto, and the Banks shall
thereafter fund each Loan required to be made by them hereunder by making
available the amount thereof to the Agent for the account of the Company at
the office of the Agent set forth in subsection 9.2 in funds immediately
available to the Agent.
9.4 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or of
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.5 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement.
9.6 Payment of Expenses. The Company agrees:
(a) to pay or reimburse the Agent for all reasonable out-of-
pocket costs and expenses incurred in connection with the preparation
and execution of, and any amendment, supplement or modification to,
this Agreement and any other documents prepared in connection
herewith, and the consummation of the transactions contemplated hereby
and the administration of this Agreement, including, without
limitation, the reasonable fees and disbursements of Simpson Thacher &
Bartlett, special counsel to the Agent and the Banks;
(b) to pay or reimburse each Bank and the Agent for all costs
and expenses (other than legal fees and disbursements) incurred in
connection with the enforcement or preservation of any rights under
this Agreement and any such other documents and the reasonable fees
and disbursements of one firm of special counsel to the Agent and the
Banks; and
(c) to (i) indemnify each Bank from and against liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than legal fees and
disbursements) of any kind whatsoever (and, with respect to any
proceeding or related proceedings, the reasonable fees and
disbursements of one firm of special counsel to the relevant Banks in
connection with such proceeding(s)) which may at any time (including,
without limitation, at any time following the payment of the Loans
made hereunder) be imposed on, incurred by or asserted against such
Bank in any way relating to or arising out of this Agreement or any
other documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by
such Bank under or in connection with any of the foregoing, provided
that the Company shall not be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from (x)
the ordinary course administration of this Agreement or such other
documents by any Bank or (y) any Bank's gross negligence or willful
misconduct or bad faith and (ii) pay or reimburse (x) each Bank for
any payments made by such Bank to the Agent or CASC pursuant to the
provisions of subsection 8.7 and (y) the Agent and CASC for any and
all liabilities, expenses or disbursements incurred by any of them
which pursuant to the provisions of subsection 8.7 are the subject of
indemnification payments from the Banks to the extent that the Agent
or CASC, for whatever reason, did not receive such indemnification
payments from any Bank or Banks.
The agreements in this subsection 9.6 shall survive the repayment
of the Loans made hereunder and all other amounts payable hereunder.
9.7 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Banks and the Agent, and their respective successors and
assigns, except that the Company may not assign or transfer any of its
rights or obligations under this Agreement without the prior written
consent of each Bank.
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Bank, any Commitment of such Bank or
any other interest of such Bank hereunder. In the event of any such sale
by a Bank of a participating interest to a Participant, such Bank's
obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any Loan made by
it for all purposes under this Agreement, and the Company and the Agent
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement, provided,
that the terms of any participation agreement or certificate relating to
any such participation shall prohibit any subparticipations by such
participant and provided, further any such participation agreement or
certificate shall permit the Bank granting such participations the right to
consent to waivers, amendments or supplements to this Agreement without the
consent of such participant except in the case of (a) waivers of any
Default or Event of Default described in Section 7(a), and (b) any
amendment or modification extending the maturity of any Loan, or reducing
the rate or extending the time of payment of interest thereof, or reducing
the principal amount thereof. The Company agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Banks the proceeds thereof as provided in
subsection 9.9 as fully as if it were a Bank hereunder. All amounts
payable by the Company under Section 2 shall be determined as if such Bank
had not sold such participations.
(c) Any Bank may assign to any Bank or additional bank or
financial institution or any Federal Reserve Bank all or any part of its
rights and obligations under this Agreement on the terms and conditions set
forth in subsection 9.6(c), (d), (e) and (g) of the Chrysler Agreement, the
provisions of which (including the definitions of defined terms used
therein) are incorporated herein by reference as if set forth fully herein;
provided, however, that in no event shall any such assignment by any Bank
to any assignee (other than any pledge or assignment of Loans to a Federal
Reserve Bank) be permitted hereunder unless contemporaneously therewith
such Bank shall assign to such assignee a percentage interest in such
Bank's rights and obligations under the Chrysler Agreement and the
promissory notes issued thereunder that is equal to the percentage interest
then being assigned hereunder.
(d) The Company authorizes each Bank to disclose to any
Participant or Assignee (as defined in the Chrysler Agreement) (each, a
"Transferee") and any prospective Transferee any and all financial
information in such Bank's possession concerning the Company and its
Affiliates which has been delivered to such Bank by or on behalf of the
Company pursuant to this Agreement or which has been delivered to such Bank
by or on behalf of the Company in connection with such Bank's credit
evaluation of the Company and its affiliates prior to becoming a party to
this Agreement.
(e) In order to facilitate any pledge or assignment to any
Federal Reserve Bank of any Loans made by any Bank hereunder, the Company
hereby agrees that, upon request of any Bank at any time and from time to
time after the Company has made its initial borrowing hereunder, the
Company shall provide to such Bank, at the Company's own expense, a note,
substantially in the form of Exhibit F, evidencing the Loans owing to such
Bank.
(f) The Agent shall maintain at its address referred to in
subsection 9.2 a register (the "Register") for the recordation of the names
and addresses of the Banks, the Commitments of the Banks, and the principal
amount of each Type of Loan owing to each Bank from time to time. The
entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and the Company, the Agent and the Banks may treat each
Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Bank at any reasonable time
and from time to time upon reasonable prior notice. The Agent shall give
prompt written notice to the Company of the making of any entry in the
Register or any change in any such entry.
9.8 Right of Set-off. Upon (a) the occurrence and during the
continuance of an Event of Default and (b) with the consent of the Required
Banks, each Bank is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank (including,
without limitation, its branches) to or for the credit or the account of
the Company against any and all of the obligations of the Company now or
hereafter existing under this Agreement, irrespective of whether or not
such Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Bank agrees promptly to notify the
Company after any such set-off and application made by such Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Bank under this subsection are
in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Bank may have.
9.9 Adjustments. If any Bank (a "benefitted Bank") shall at any
time receive any payment of all or part of its Loans made hereunder, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in clause (f) of Section 7, or otherwise) in a
greater proportion than any such payment to, or any collateral received by,
any other Bank, if any, in respect of such other Bank's Loans, or interest
thereon, such benefitted Bank shall purchase for cash from the other Banks
such portion of each such other Bank's Loans, or shall provide such other
Banks with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Bank to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Banks; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Company agrees
that each Bank so purchasing a portion of another Bank's Loans may exercise
all rights of payment (including, without limitation, rights of set-off)
with respect to such portion as fully as if such Bank were the direct
holder of such portion.
9.10 New Banks. During the term of this Agreement with the
consent of the Company and upon notification to the Agent, one or more
additional financial institutions may become a party to this Agreement by
executing a supplement hereto with the Company and the Agent, substantially
in the form of Exhibit B, whereupon such financial institution (herein
called a "New Bank") shall become a Bank for all purposes and to the same
extent as if originally a party hereto and shall be bound by and entitled
to the benefits of this Agreement, provided that any such New Bank has also
become a New Bank under the Chrysler Agreement pursuant to subsection 9.10
thereof. Effective as of the date on which any such New Bank becomes a
Bank pursuant to the provisions of this subsection, the Agent, each Bank
and the Company shall receive a notice from Chrysler of each Bank's
Commitment and the aggregate Commitments pursuant to subsection 2.17 of the
Chrysler Agreement. If on the date upon which such New Bank becomes a Bank
pursuant to the provisions of this subsection 9.10, there is an unpaid
principal amount of the Loans outstanding hereunder, the Company shall
borrow from such New Bank through the Agent, in an amount determined by
multiplying the amount of such New Bank's Commitment by a fraction, the
numerator of which shall be the then unpaid principal amount of the Loans
outstanding hereunder and the denominator of which shall be the aggregate
Commitments of the Banks other than the New Bank. Notwithstanding anything
herein to the contrary, if there are Eurodollar Loans outstanding, a
financial institution that becomes a New Bank will make Eurodollar Loans to
the Company (pro rata according to its Commitment Percentage) having
Interest Periods corresponding to the then unexpired portions of the
respective Interest Periods of such Eurodollar Loans and bearing interest
at a rate equal to the respective interest rates then applicable to such
Eurodollar Loans. The Agent shall advise the Banks of each addition of a
New Bank hereunder, of the amount of its Commitment and of the amount of
any borrowing from it hereunder made simultaneously upon its addition.
9.11 Increase in Commitments. During the term of this
Agreement, upon any Bank increasing its Commitment under the Chrysler
Agreement and Chrysler giving the notice required by subsection 2.17(c) of
the Chrysler Agreement, such Bank shall be deemed to have increased its
Commitment hereunder as set forth in such notice, whereupon such Bank shall
be bound by and entitled to the benefits of this Agreement with respect to
the full amount of its Commitment as so increased. Effective as of the
date on which any such Bank increases its Commitment pursuant to the
provisions of this subsection 9.11, the Agent, each Bank and the Company
shall receive a notice from Chrysler of each Bank's Commitment and the
aggregate Commitments pursuant to subsection 2.17 of the Chrysler
Agreement. If on the date upon which such Bank increases its Commitment
pursuant to this subsection 9.11 there is an unpaid principal amount of the
Loans hereunder, the Company shall borrow from such Bank through the Agent,
in an amount determined by multiplying the amount of the increase in such
Bank's Commitment by a fraction, the numerator of which shall be the then
unpaid principal amount of the Loans outstanding hereunder and the
denominator of which shall be the aggregate Commitments of the Banks other
than the amount of the additional Commitment of such Bank. Notwithstanding
anything herein to the contrary, if there are Eurodollar Loans outstanding,
a Bank that increases its Commitment pursuant to this subsection 9.11 will
make Eurodollar Loans to the Company (pro rata according to the amount of
the increase in such Bank's Commitment) having Interest Periods
corresponding to the then unexpired portions of the respective Interest
Periods of such Eurodollar Loans and bearing interest at a rate equal to
the respective interest rates then applicable to such Eurodollar Loans.
The Agent shall advise the Banks of such increase in the Commitment of a
Bank and of the amount of any borrowing from it hereunder made
simultaneously upon such increase.
9.12 Tax Forms. If any Bank which becomes a party to this
Agreement on any day after the date hereof pursuant to subsection 9.7 or
9.10 is organized under the laws of any jurisdiction other than the United
States or any state thereof, such Bank shall on such day (i) represent to
the transferor Bank (if applicable), the Agent and the Company that under
applicable law and treaties no taxes will be required to be withheld by the
Agent, the Company or the transferor Bank (if applicable) with respect to
any payments to be made to such Bank in respect of the Loans hereunder,
(ii) furnish to the transferor Bank (if applicable), the Agent and the
Company either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Bank claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) agree (for the benefit of the transferor Bank (if
applicable), the Agent and the Company) to provide the transferor Bank (if
applicable), the Agent and the Company a new Form 4224 or Form 1001 upon
the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such Bank, and to
comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
9.13 Counterparts. This Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Company and the Agent.
9.14 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9.15 Submission to Jurisdiction; Waivers. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding commenced by any party hereto relating to this Agreement,
or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified with
copies addressed as set forth in subsection 9.2; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
9.16 Integration. This Agreement represents the agreement of
each party with respect to the subject matter hereof, and there are no
promises or representations by the Agent or any Bank relative to the
subject matter hereof not reflected herein.
9.17 Restatement. It is the intention of each of the parties
hereto that all indebtedness of the Company under the Third Amended and
Restated Commitment Transfer Agreement be continued hereunder, and that the
Third Amended and Restated Commitment Transfer Agreement be amended and
restated in its entirety to reflect such continuation.
9.18 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
CHEMICAL BANK, as Agent
By: /s/ Karen Sager
Title: Vice President
Exhibit 10-C
CONFORMED COPY
CHRYSLER FINANCIAL CORPORATION
as Guarantor
ROYAL BANK OF CANADA
as Agent
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
as Co-Agents
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
CREDIT SUISSE CANADA
MORGAN BANK OF CANADA
NATIONAL BANK OF CANADA
ABN AMRO BANK CANADA
BANQUE NATIONALE DE PARIS (CANADA)
SWISS BANK CORPORATION (CANADA)
UNION BANK OF SWITZERLAND (CANADA)
DAI-ICHI KANGYO BANK (CANADA)
DRESDNER BANK CANADA
NATIONAL WESTMINSTER BANK OF CANADA
SOCIETE GENERALE (CANADA)
THE BANK OF TOKYO CANADA
as Lenders
___________________________________________________________________________
GUARANTEE
May 23, 1994
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
INTERPRETATION
1.01 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Accumulated Funding Deficiency" . . . . . . . . . . . . . . 2
"Applicable Laws". . . . . . . . . . . . . . . . . . . . . . 2
"Canadian Corporation" . . . . . . . . . . . . . . . . . . . 2
"Chartered Bank" . . . . . . . . . . . . . . . . . . . . . . 2
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Co-Agents". . . . . . . . . . . . . . . . . . . . . . . . . 2
"Commonly Controlled Entity" . . . . . . . . . . . . . . . . 2
"Credit Agreement" . . . . . . . . . . . . . . . . . . . . . 2
"Domestic Subsidiary". . . . . . . . . . . . . . . . . . . . 3
"ERISA". . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Finance Business" . . . . . . . . . . . . . . . . . . . . . 3
"Finance Subsidiary" . . . . . . . . . . . . . . . . . . . . 3
"Foreign Subsidiary" . . . . . . . . . . . . . . . . . . . . 3
"GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Governmental Authority" . . . . . . . . . . . . . . . . . . 3
"Guarantee". . . . . . . . . . . . . . . . . . . . . . . . . 3
"Guaranteed Liabilities" . . . . . . . . . . . . . . . . . . 3
"Guaranteed Parties" . . . . . . . . . . . . . . . . . . . . 4
"Guarantor". . . . . . . . . . . . . . . . . . . . . . . . . 4
"Indebtedness" . . . . . . . . . . . . . . . . . . . . . . . 4
"Lender" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Multiemployer Plan" . . . . . . . . . . . . . . . . . . . . 4
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Proceedings". . . . . . . . . . . . . . . . . . . . . . . . 4
"Prohibited Transaction" . . . . . . . . . . . . . . . . . . 4
"Real Estate Business" . . . . . . . . . . . . . . . . . . . 4
"Reportable Event" . . . . . . . . . . . . . . . . . . . . . 5
"Significant Subsidiary" . . . . . . . . . . . . . . . . . . 5
"Single Employer Plan" . . . . . . . . . . . . . . . . . . . 5
"Special Purpose Subsidiary" . . . . . . . . . . . . . . . . 5
"Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . 5
"U.S. Business Day". . . . . . . . . . . . . . . . . . . . . 5
"U.S. Credit Agreement". . . . . . . . . . . . . . . . . . . 5
1.02 - Headings and Table of Contents. . . . . . . . . . . . . . . . 5
1.03 - References. . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.04 - Rules of Interpretation . . . . . . . . . . . . . . . . . . . 5
1.05 - Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
GUARANTEE
2.01 - Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
PAYMENT
3.01 - Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV
OBLIGATIONS ABSOLUTE
4.01 - Obligations Absolute . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
OBLIGATIONS CONTINUING
5.01 - Obligations Continuing. . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI
OBLIGATIONS NOT AFFECTED
6.01 - Obligations Not Affected. . . . . . . . . . . . . . . . . . . 8
6.02 - Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.03 - No Obligation to Take Action Against Borrower . . . . . . . . 9
6.04 - Dealing with the Borrower and Others. . . . . . . . . . . . . 10
6.05 - Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01 - Representations and Warranties. . . . . . . . . . . . . . . . 10
7.02 - Deemed Repetition . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII
NEGATIVE COVENANTS
8.01 - Affirmative Covenants . . . . . . . . . . . . . . . . . . . . 13
(a) Maintenance of Ownership Interest. . . . . . . . . . . . . . 13
(b) Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Information to be Provided . . . . . . . . . . . . . . . . . 13
8.02 - Negative Covenants. . . . . . . . . . . . . . . . . . . . . . 14
(a) No Impairment of Borrower. . . . . . . . . . . . . . . . . . 14
(b) Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . . 14
(c) Limitation on Liens. . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX
NOTICE
9.01 - Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE X
MISCELLANEOUS
10.01 - Amendment, Etc.. . . . . . . . . . . . . . . . . . . . . . . 18
10.02 - Assignment, Transfer and Participation . . . . . . . . . . . 18
10.03 - Acknowledgement by CFC re: Increased Commitments. . . . . . 19
10.04 - Acknowledgement by CFC re: New Lenders . . . . . . . . . . . 19
10.05 - Exchange of Information. . . . . . . . . . . . . . . . . . . 19
10.06 - Successor Agent. . . . . . . . . . . . . . . . . . . . . . . 19
10.07 - Judgment Currency. . . . . . . . . . . . . . . . . . . . . . 20
10.08 - Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 20
10.09 - Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 20
10.10 - Costs and Expenses . . . . . . . . . . . . . . . . . . . . . 21
10.11 - No Waiver, Cumulative Remedies . . . . . . . . . . . . . . . 21
10.12 - Waiver of Rights of Subrogation, Reimbursement, Etc. . . . . 22
10.13 - Survival of Obligations; No Set-off. . . . . . . . . . . . . 22
10.14 - Guarantee in Addition to Other Obligations . . . . . . . . . 22
10.15 - Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 23
10.16 - Severability . . . . . . . . . . . . . . . . . . . . . . . . 23
10.17 - Successors and Assignees . . . . . . . . . . . . . . . . . . 23
10.18 - Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 23
10.19 - Effective Date . . . . . . . . . . . . . . . . . . . . . . . 23
<PAGE>
GUARANTEE
THIS GUARANTEE is dated as of the 23rd day of May, 1994
BY: CHRYSLER FINANCIAL CORPORATION, a corporation incorporated
under the laws of the State of Michigan (the "Guarantor")
TO AND IN
FAVOUR OF: EACH OF THE GUARANTEED PARTIES, as hereinafter defined
- and -
ROYAL BANK OF CANADA, a Canadian chartered bank having its
head office in the City of Montreal, Quebec, Canada, and a
branch in the City of Toronto, Ontario, Canada, in its
capacity as Agent for the Lenders (the "Agent"),
- and -
CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered
bank having its head office in the City of Toronto, Province
of Ontario and a branch in the City of Toronto, Province of
Ontario in its capacity as a Co-Agent,
- and -
THE BANK OF NOVA SCOTIA, a Canadian chartered bank having
its head office in the City of Halifax, Province of Nova
Scotia and a branch in the City of Toronto, Province of
Ontario in its capacity as a Co-Agent
RECITALS
A. Chrysler Credit Canada Ltd. (the "Borrower") has requested that
the Agent, the Co-Agents and the Lenders enter into a Revolving Credit
Agreement dated as of May 23, 1994 (as the same may be amended, modified,
supplemented or restated from time to time, the "Credit Agreement") for the
purposes enumerated therein.
B. The Borrower is a wholly-owned Subsidiary of the Guarantor.
C. To induce the Lenders and the Agent to enter into the Credit
Agreement with the Borrower, and for other good and valuable consideration,
the Guarantor has agreed to enter into this Guarantee pursuant to which it
will guarantee the Borrower's Obligations under the Credit Agreement.
NOW THEREFORE for valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
INTERPRETATION
Section 1.01 - Definitions
In this Guarantee, unless something in the subject matter or
context is inconsistent therewith, capitalized terms used but not defined
in this Guarantee have the respective meanings attributed to them in the
Credit Agreement and:
"Accumulated Funding Deficiency" means any "accumulated funding
deficiency" as defined in Section 302 of ERISA.
"Applicable Laws" means, with respect to any Person, property,
transaction or event, all present or future applicable laws, statutes,
regulations, treaties, judgments and decrees and (whether or not having the
force of law) all applicable official directives, rules, consents,
approvals, authorizations, guidelines, orders and policies of any
governmental bodies or Persons having authority over such Person, property,
transaction or event.
"Canadian Corporation" means any corporation which (a) is
organized under the laws of Canada or any province of Canada and (b)
conducts substantially all of its business within Canada.
"Chartered Bank" means a bank named on Schedule I or Schedule II
to the Bank Act (Canada).
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.
"Co-Agents" means Canadian Imperial Bank of Commerce and The Bank
of Nova Scotia when acting in their capacities as co-agents under the
Credit Agreement.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Guarantor within the
meaning of Section 414(b) or (c) of the Code.
"Credit Agreement" shall have the meaning ascribed thereto in the
first recital.
"Domestic Subsidiary" means any Subsidiary other than a Foreign
Subsidiary.
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Finance Business" means (a) the small loan, personal finance,
consumer finance or instalment credit business (including the business of
making collateral loans secured by credit obligations or personal
property), (b) the sales finance business and the business of purchasing
and selling notes and accounts receivable (whether or not repayable in
instalments) and interests therein, (c) the commercial financing and
factoring business as generally conducted, including the leasing of
tangible personal property, and (d) any business (including, without
limitation, securitization and other receivables-based transactions)
related to or conducted in connection with any business of the character
referred to in the foregoing clauses (a), (b) and (c) other than insurance
underwriting.
"Finance Subsidiary" means any Domestic Subsidiary that is
engaged primarily in the Finance Business.
"Foreign Subsidiary" means any Subsidiary that (a) is organized
under the laws of any jurisdiction outside the United States of America,
Puerto Rico and Canada, or (b) conducts the major portion of its business
outside the United States of America, Puerto Rico and Canada.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time except that for the
purpose of determining compliance with the covenants set forth in Section
8.02, "GAAP" means generally accepted accounting principles in the United
States of America in effect on December 31, 1993 applied consistently with
those used in compiling the Guarantor's 1993 financial statements.
"Governmental Authority" means any nation or government, any
province, state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" means this guarantee, as amended, modified,
supplemented or restated from time to time.
"Guaranteed Liabilities" means all indebtedness, liabilities and
obligations of the Borrower, present and future, direct and indirect,
absolute and contingent, matured and unmatured, at any time and from time
to time existing or arising under or by virtue of or otherwise in
connection with the Credit Agreement or any agreement or instrument
referred to therein or contemplated thereby, in each case, whether or not
any such indebtedness, liabilities or obligations are discharged, stayed or
otherwise affected by any proceeding referred to in Section 12.01(e) or (f)
of the Credit Agreement.
"Guaranteed Parties" means all the Persons who are now or who
hereafter become Lenders, Co-Agents or the Agent under the Credit
Agreement.
"Guarantor" means Chrysler Financial Corporation, a Michigan
corporation and its successors.
"Indebtedness" means, as applied to any Person at any date, (a)
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services which would appear on a consolidated balance
sheet of such Person (or, in the case of the Guarantor and its
Subsidiaries, the Guarantor) prepared in accordance with GAAP, (b)
obligations of such Person under leases which appear as capital leases on a
consolidated balance sheet of such Person prepared in accordance with GAAP
and (c) any withdrawal obligation of such Person or any Commonly Controlled
Entity thereof to a Multiemployer Plan.
"Lender" means each of the banks who are now or become Lenders
under the Credit Agreement.
"Lien" means, with respect to any property of any Person, any
mortgage, pledge, hypothecation, encumbrance, lien (statutory or other),
charge or other security interest of any kind in or with respect to such
property (including, without limitation, any conditional sale or other
title retention agreement, and any financing lease under which such Person
is lessee having substantially the same economic effects as any of the
foregoing).
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan" means, at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Guarantor or a
Commonly Controlled Entity is (or if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an 'employer' as
such term is defined in Section 3(5) of ERISA.
"Proceedings" has the meaning ascribed thereto in Section
10.09(a).
"Prohibited Transaction" means any "prohibited transaction" as
defined in Section 406 of ERISA or Section 4975 of the Code.
"Real Estate Business" means the acquisition, development,
leasing, financing, management, maintenance and disposition of real
property, including, without limitation, automotive dealership facilities
and dealership site control arrangements.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Significant Subsidiary" means, at any particular time, (i) any
Finance Subsidiary and (ii) any other Subsidiary of CFC, the assets of
which constitute at least 5% of the consolidated assets of CFC and its
Subsidiaries as stated in the consolidated financial statements of CFC and
its Subsidiaries for the most recently completed fiscal quarter of CFC,
provided that the term "Significant Subsidiary" shall not include any
Special Purpose Subsidiary.
"Single Employer Plan" means any Plan which is not a
Multiemployer Plan.
"Special Purpose Subsidiary" means any Subsidiary created for the
sole purpose of purchasing assets from the Guarantor or any Finance
Subsidiary with the intention and for the purpose of using such assets in a
securitization transaction.
"Subsidiary" means, any corporation of which the Guarantor or one
or more Subsidiaries or the Guarantor and one or more Subsidiaries shall at
any time own shares of any class or classes (however designated) having
voting power for the election of at least a majority of the members of the
board of directors (or other governing body) of such corporation.
"U.S. Business Day" means a Business Day which is not a legal
holiday in the State of Michigan.
"U.S. Credit Agreement" means the revolving credit agreement
dated as of May 23, 1994 among the Guarantor, the several commercial banks
party thereto, Chemical Bank as agent and Chemical Securities Inc. as
arranger.
Section 1.02 - Headings and Table of Contents
The division of this Guarantee into Articles and Sections and the
insertions of Headings and a Table of Contents are for convenience of
reference only and shall not affect the construction or interpretation of
this Guarantee.
Section 1.03 - References
Unless something in the subject matter or context is inconsistent
therewith, all references to Sections and Articles are to Sections and
Articles of this Guarantee. The words "hereto", "herein", "hereof",
"hereunder" and similar expressions refer to this Guarantee and not to any
particular Article, Section, paragraph or other portion hereof.
Section 1.04 - Rules of Interpretation
In this Guarantee, unless otherwise specifically provided, the
singular includes the plural and vice versa; "including" means "including,
without limitation,"; "month" means a calendar month; and "in writing" or
"written" includes printing, typewriting, or any electronic means of
communication capable of being visibly reproduced at the point of
reception, including telex, telecopier or telegraph.
Section 1.05 - Time
Except where otherwise indicated in this Guarantee, any reference
to a time shall mean local time in the City of Toronto, Province of
Ontario.
ARTICLE II
GUARANTEE
Section 2.01 - Guarantee
The Guarantor hereby irrevocably and unconditionally guarantees
to the Guaranteed Parties the punctual and complete payment and
satisfaction when due (whether at stated maturity, by acceleration or
otherwise), and at all times thereafter, of all the Guaranteed Liabilities
which are or may become at any time and from time to time owing or payable
by the Borrower to the respective Guaranteed Parties or which remain owing
and unpaid to the respective Guaranteed Parties.
ARTICLE III
PAYMENT
Section 3.01 - Payment
(a) The Guarantor agrees to make immediate payment to the Agent on
behalf of the Guaranteed Parties of all Guaranteed Liabilities owing or
payable to the respective Guaranteed Parties upon receipt of a demand for
payment therefor by the Agent to the Guarantor in writing.
(b) Each payment to be made by the Guarantor hereunder in respect of
the Guaranteed Liabilities shall be payable in the currency or currencies
in which such Guaranteed Liabilities are denominated, and shall be made
(i) without set-off or counterclaim, and
(ii) free and clear of and without deduction or withholding for
or on account of any Taxes unless the Guarantor is
compelled by Applicable Laws to make payment subject to
deduction or withholding of such Taxes.
(c) All Taxes in respect of this Guarantee or any amounts payable or
paid under this Guarantee shall be paid by the Guarantor when due and in
any event prior to the date on which penalties attach thereto. The
Guarantor will indemnify each Guaranteed Party against and in respect of
all such Taxes.
Without limiting the generality of the foregoing, if any Taxes or
amounts in respect thereof must be deducted or withheld from any amounts
payable or paid by the Guarantor hereunder, the Guarantor shall pay such
additional amounts as may be necessary to ensure that each of the
Guaranteed Parties receives a net amount equal to the full amount which it
would have received had payment not been made subject to deduction or
withholding of such Taxes. Within thirty (30) days of each payment by the
Guarantor hereunder of Taxes or in respect of Taxes, the Guarantor shall
deliver to the Agent satisfactory evidence (including originals, or
certified copies, of all relevant receipts) that such Taxes have been duly
remitted to the appropriate authority or authorities.
ARTICLE IV
OBLIGATIONS ABSOLUTE
Section 4.01 - Obligations Absolute
The obligations of the Guarantor hereunder are and shall be
absolute and unconditional and any monies or amounts expressed to be owing
or payable by the Guarantor hereunder which may not be recoverable from the
Guarantor on the footing of a guarantee shall be recoverable from the
Guarantor as a primary obligor and principal debtor in respect thereof.
ARTICLE V
OBLIGATIONS CONTINUING
Section 5.01 - Obligations Continuing
(a) The obligations of the Guarantor hereunder shall be continuing
and shall remain in full force and effect so long as any Lender's
Commitment remains in effect under the Credit Agreement and until all the
Guaranteed Liabilities have been paid and satisfied in full. The
obligations of the Guarantor hereunder shall not be satisfied, reduced or
discharged by any intermediate payment or satisfaction of the whole or any
part of the principal, interest, fees and other monies or amounts which
may at any time be or become owing or payable under or by virtue of or
otherwise in connection with the Credit Agreement.
(b) The obligations of the Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any
payment which would otherwise have reduced the obligations of the Guarantor
hereunder (whether such payment shall have been by or on behalf of the
Borrower or by or on behalf of the Guarantor) is rescinded or reclaimed
from any of the Guaranteed Parties upon the insolvency, bankruptcy,
liquidation or reorganization of the Borrower or the Guarantor
or otherwise, all as though such payment had not been made.
ARTICLE VI
OBLIGATIONS NOT AFFECTED
Section 6.01 - Obligations Not Affected
The obligations of the Guarantor hereunder shall not be affected
or impaired by any act, omission, matter or thing whatsoever, occurring
before, upon or after any demand for payment hereunder (and whether or not
known to the Guarantor or any of the Guaranteed Parties) which, but for
this provision, might constitute a whole or partial defence to a claim
against the Guarantor hereunder or might operate to release or otherwise
exonerate the Guarantor from any of its obligations hereunder or otherwise
affect such obligations, whether occasioned by default of any of the
Guaranteed Parties or otherwise, and the Guarantor hereby irrevocably
waives any such defence it may now or hereafter have in any way relating to
any of the foregoing, including:
(a) any limitation of status or power, disability, incapacity or
other circumstance relating to the Borrower or any other Person, including
any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding-up or other proceeding involving or
affecting the Borrower or any other Person;
(b) any irregularity, defect, unenforceability or invalidity in
respect of any indebtedness or other obligation of the Borrower or any
other Person under the Credit Agreement or any other document or
instrument;
(c) any failure of the Borrower, whether or not without fault on its
part, to perform or comply with any of the provisions of the Credit
Agreement or to give notice thereof to the Guarantor;
(d) the taking or enforcing or exercising or the refusal or neglect
to take or enforce or exercise any right or remedy from or against the
Borrower or any other Person or their respective assets or the release or
discharge of any such right or remedies;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Borrower or any other Person;
(f) any amendment, variation, modification, supplement or replacement
of the Credit Agreement or any other document or instrument;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Borrower or the Guarantor;
(h) any merger or amalgamation of the Borrower or the Guarantor with
any Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction or by any present or future action of any
Governmental Authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Guaranteed Liabilities or the obligations of the Guarantor under this
Guarantee; and
(j) any other circumstance (including, without limitation, any
existence of or reliance upon any representation by the Agent, any Co-Agent
or any Lender, but excluding complete, irrevocable payment) that might
otherwise constitute a legal or equitable discharge or defence of the
Borrower under the Credit Agreement or of the Guarantor in respect of its
guarantee hereunder.
Section 6.02 - Waiver
Without in any way limiting the provisions of Section 6.01
hereof, the Guarantor hereby waives notice of acceptance hereof, notice of
any liability of the Guarantor hereunder, notice or proof of reliance by
the Guaranteed Parties upon the obligations of the Guarantor hereunder, and
diligence, presentment, demand for payment on the Borrower, protest, notice
of dishonour or non-payment of any of the Guaranteed Liabilities, or other
notice or formalities to the Borrower of any kind whatsoever. The
Guarantor further hereby waives any requirement that any Guaranteed Party
protect, secure, perfect or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action against
the Borrower or any other Person or entity or any collateral.
Section 6.03 - No Obligation to Take Action Against Borrower
Neither the Agent nor any of the other Guaranteed Parties shall
have any obligation to enforce any rights or remedies or to take any other
steps against the Borrower or any other Person or any property of the
Borrower or any other Person before the Agent is entitled to demand
payment and performance by the Guarantor of its liabilities and obligations
under this Guarantee, and the Guarantor hereby waives all benefit of
discussion. The obligations of the Guarantor hereunder are independent of
the Guaranteed Liabilities and a separate action or actions may be brought
and prosecuted against the Guarantor to enforce this Guarantee,
irrespective of whether any action is brought against the Borrower or
whether the Borrower is joined in any such action or actions.
Section 6.04 - Dealing with the Borrower and Others
The Lenders or the Agent, without releasing, discharging,
limiting or otherwise affecting in whole or in part the Guarantor's
obligations and liabilities hereunder and without the consent of or notice
to the Guarantor may,
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Borrower or any
other Person;
(b) take or abstain from taking securities or collateral from the
Borrower or from perfecting securities or collateral of the Borrower;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Borrower or any third party with respect to the obligations or matters
contemplated by the Credit Agreement;
(d) accept compromises or arrangements from the Borrower;
(e) apply all monies at any time received from the Borrower or from
securities upon such part of the Guaranteed Liabilities as the Guaranteed
Parties may see fit or change any such application in whole or in part from
time to time as the Guaranteed Parties may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Borrower and all other Persons and securities as the Guaranteed Parties
may see fit.
Section 6.05 - Acknowledgement
The Guarantor hereby acknowledges communication of the terms of
the Credit Agreement and of all the provisions therein contained and
consents to and approves the same.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 - Representations and Warranties
The Guarantor represents and warrants to the Guaranteed Parties
on and as of the Effective Date as follows and acknowledges and confirms
that the Guaranteed Parties are relying upon such representations and
warranties in entering into the Credit Agreement and in making each
Borrowing available thereunder:
(a) the Guarantor and each of its Subsidiaries (i) is a corporation
duly organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation, amalgamation or continuance, as the case
may be, and (ii) is duly qualified as a foreign corporation to do business
and is in good standing in each of the jurisdictions in which the character
of the properties owned or held under lease by it or the nature of business
transacted by it makes such qualification necessary, except in the case of
this clause (ii) to the extent that the failure to be so qualified or in
good standing would not have a material adverse effect on the business,
operations or financial condition of the Guarantor and its Subsidiaries
taken as a whole;
(b) the Guarantor and each of its Significant Subsidiaries has the
corporate power and authority to own its respective properties and to carry
on its business as now conducted; the Guarantor has full power and
authority to enter into and perform its obligations under this Guarantee
and this Guarantee has been duly authorized by all necessary corporate
action on the part of the Guarantor and, to the best of the knowledge of
the Guarantor, this Guarantee is not in violation of any Applicable Law;
(c) neither the execution and delivery of this Guarantee nor
compliance with the terms and provisions hereof as of the Effective Date
(i) conflicts with, violates, or results in a breach of any of the terms,
conditions or provisions of any Applicable Law applicable to the Guarantor
or any of its Significant Subsidiaries or, (ii) conflicts with, violates,
results in a breach of, or constitutes a default under, any restated
articles of incorporation or by-law provision of the Guarantor or any of
its Significant Subsidiaries or of any loan agreement, indenture, trust
deed or any other agreement or instrument to which the Guarantor or any of
its Significant Subsidiaries is a party or by which it or any of them is
bound;
(d) this Guarantee has been duly executed and delivered on behalf of
the Guarantor, and this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance
with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by principles
of equity, whether considered in a proceeding in equity or at law. No
authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority is required for the due execution,
delivery and performance by the Guarantor of this Guarantee;
(e) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor or any of its
Subsidiaries or against any of its or their respective properties or
revenues, in which there is reasonable likelihood of an adverse
determination (i) with respect to this Guarantee, if such adverse
determination would have a material adverse effect on the ability of the
Guarantor to fulfil its obligations under this Guarantee or on the rights
and remedies of the Guaranteed Parties thereunder or (ii) which would, if
adversely determined, have a material adverse effect on the business,
operations, property or financial condition of the Guarantor and its
Subsidiaries taken as a whole;
(f) neither the Guarantor nor any of its Significant Subsidiaries is
in breach of any term of its incorporating instruments or of its by-laws
and, to the best of the knowledge of the Guarantor, neither the Guarantor
nor any of its Significant Subsidiaries is in breach of any material
mortgage, franchise, licence, which breach could materially and adversely
affect the financial condition of the Guarantor and its Significant
Subsidiaries taken as a whole;
(g) to the best of the Guarantor's knowledge, no Event of Default
under the Credit Agreement has occurred and is continuing and no other
event has occurred and is continuing which, with the giving or receipt of
notice or the lapse of time, or both, would constitute an Event of Default
under the Credit Agreement;
(h) the audited consolidated balance sheet of the Guarantor and its
Subsidiaries as at December 31, 1993, and the related audited consolidated
statements of net earnings and cash flows for the fiscal year ended on such
date, certified by Deloitte & Touche, copies of which have been delivered
to the Agent, present fairly the consolidated financial position of the
Guarantor and its Subsidiaries as at such date, and the consolidated
results of their operations and cash flows for the fiscal year then ended.
The unaudited consolidated balance sheet of the Guarantor and its
Subsidiaries as at March 31, 1994, and the related consolidated statements
of net earnings and cash flows for the three-month period ended on such
date, copies of which have been delivered to the Agent, present fairly the
consolidated financial condition of the Guarantor and its Subsidiaries as
at such date, and the consolidated results of their operations for the
three-month period then ended (subject to normal year-end audit
adjustments). Such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP. As at March
31, 1994, neither the Guarantor nor any of its Subsidiaries had any asset,
liability, contingent obligation, liability for taxes, long-term lease or
unusual forward or long-term commitment material to the financial condition
of the Guarantor and its Subsidiaries taken as a whole, which was not
reflected in the foregoing unaudited statements or in the notes thereto;
(i) the information, exhibits and reports furnished by the Guarantor
to the Agent for the benefit of the Lenders contain no material
misstatement of fact nor do they omit to state a material fact which is
necessary to make any statement therein contained not misleading;
(j) between December 31, 1993 and the Effective Date under the Credit
Agreement, there has been no material adverse change in the business,
operations, property or financial or other condition of the Guarantor and
its Subsidiaries taken as a whole; and
(k) the Guarantor has filed all material income tax returns which
were required to be filed, paid or made provision for payment of all
material taxes (including interest and penalties) which are due and
payable, and provided adequate reserves established in accordance with GAAP
for the payment of any tax the payment of which is being contested.
Section 7.02 - Deemed Repetition
The representations and warranties contained in this Article VII
shall continue in effect so long as any Lender's Commitment remains in
effect under the Credit Agreement or any Guaranteed Liabilities remain
outstanding and unpaid and shall be deemed to be repeated on each Drawdown
Date (which for the purposes of this Section 7.02 shall exclude a
Conversion Date or a date on which a Libor Loan is reborrowed by way of
another Libor Loan or a date on which a Bankers' Acceptance is repaid by
way of Bankers' Acceptances) as if made on and as of each such date except
for the representations and warranties in Section 7.01(c)(i), (h) and (j)
which relate solely to an earlier date.
ARTICLE VIII
NEGATIVE COVENANTS
Section 8.01 - Affirmative Covenants
The Guarantor covenants and agrees that so long as any Lender's
Commitment remains in effect under the Credit Agreement or any Guaranteed
Liabilities remain outstanding and unpaid:
(a) Maintenance of Ownership Interest
The Guarantor will maintain ownership of 100% of the issued and
outstanding shares of capital stock of the Borrower which are
entitled to vote under all circumstances for the election of the
board of directors of the Borrower.
(b) Certificate
The Guarantor shall furnish to the Agent in sufficient numbers
for each Lender concurrently with the financial statements for
each quarterly accounting period and for each fiscal year of the
Borrower furnished pursuant to subparagraphs 10.01(1)(a)(i) and
10.01(1)(a)(ii) of the Credit Agreement, (A) a certificate in the
form and substance set out in Exhibit "A" of the Chairman of the
Board, the President, an Executive Vice President, a Vice
President or the Treasurer of the Guarantor, (B) an analysis
prepared and certified by such officer of the Borrower of the
covenant contained in Section 8.02(b) of this Guarantee and (C)
the analysis prepared, certified and delivered by an officer of
CFC to its bankers pursuant to Section 5.1(a)(iii) of the U.S.
Credit Agreement or any substitution or replacement thereof.
(c) Information to be Provided
Upon written request by any Lender through the Agent, the
Guarantor shall furnish promptly to such Lender copies of (i) all
such reports, if any, of the type a publicly held corporation
would generally make available to its shareholders as the
Guarantor shall make available to Chrysler Corporation, and (ii)
all regular and periodic reports which the Guarantor or any of
its Subsidiaries may be required to file with the Securities and
Exchange Commission or any similar or corresponding government
department, commission, board, bureau or agency, or with any
securities exchange.
Section 8.02 - Negative Covenants
The Guarantor covenants and agrees that so long as any Lender's
Commitment remains in effect under the Credit Agreement or any Guaranteed
Liabilities remain outstanding and unpaid:
(a) No Impairment of Borrower
The Guarantor will not cause or do any act, the effect of which
would be to impair the ability of the Borrower to perform its
obligations under the Credit Agreement.
(b) Fixed Charges Coverage Ratio
The Guarantor will not permit its "net earnings available for
fixed charges" to be less than 110% of its "fixed charges" for
any fiscal year of the Guarantor, or for the portion of any
fiscal year of the Guarantor ending with the last day of each
calendar quarter therein; "net earnings available for fixed
charges" and "fixed charges" being determined for the Guarantor
and for the Guarantor and its Subsidiaries on a consolidated
basis. For the purposes of this Section 8.02(b):
(i) "Net earnings available for fixed charges" shall mean
net income after deducting operating and maintenance
expenses, taxes other than federal, state and other
income taxes, except to the extent stated below in the
case of consolidated subsidiaries, depreciation and
depletion, but excluding extraordinary nonrecurring
items of income or expense appearing in the regular
consolidated financial statements of the Guarantor;
(ii) "Fixed charges" shall mean interest on debt,
amortization of debt discount and rentals for leased
properties, except rentals under leases having a term
of one year or less;
(iii) In determining net earnings and fixed charges on a
consolidated basis, all intercompany items and the
portions of earnings allocable to minority interests in
consolidated subsidiaries shall be eliminated,
provision for or refund of income taxes of consolidated
subsidiaries in which the Guarantor owns directly or
indirectly less than ninety percent of all classes of
voting stock shall be deducted or added, and fixed
charges shall include fixed charges and preferred
dividends of consolidated subsidiaries that are not
intercompany items; and
(iv) Earnings attributable to assets or institutions
acquired by merger, consolidation, reorganization,
succession, organization, purchase or otherwise may be
included for that part of the test period which
precedes such acquisition, provided that (A) if less
than substantially all assets of any other institution
(or all or less than all assets of any other type of
business enterprise) is acquired, such earnings may be
included to the extent they are certified by an
independent accountant to be attributable to such
assets and (B) if an institution (or substantially all
of its assets) is acquired, such earnings may be
included if they are included in financial statements
of such institution prepared under generally accepted
accounting principles. Fixed charges and preferred
dividends for the period of such inclusion shall either
include any additional fixed charges and preferred
dividends properly attributable to such acquisitions as
certified by an independent accountant, or be the fixed
charges and preferred dividends with respect to debt
and stock outstanding immediately after such
acquisition.
(c) Limitation on Liens
(1) The Guarantor will not, and will not permit any Finance
Subsidiary to, create, assume or incur, or suffer to be created, assumed or
incurred or to exist, any Lien in respect of any property of any character
of the Guarantor or such Finance Subsidiary, whether heretofore or
hereafter acquired; excluding, however, from the operation of this
covenant:
(i) Liens on assets of any Finance Subsidiary which is a
Canadian Corporation securing obligations of such
Finance Subsidiary;
(ii) any deposit of assets of the Guarantor or any of its
Finance Subsidiaries with any surety company or clerk
of any court, or in escrow, as collateral in connection
with, or in lieu of, any bond on appeal by the
Guarantor or any of its Finance Subsidiaries, from any
judgment or decree, or in connection with other
proceedings or actions at law or in equity by or
against the Guarantor or any of its Finance
Subsidiaries;
(iii) Liens created by any Finance Subsidiary in favour of
the Guarantor or a wholly-owned Subsidiary securing
indebtedness of such Finance Subsidiary to the
Guarantor or a wholly-owned Subsidiary (which Liens
cannot be transferred except to the Guarantor or to
another wholly-owned Subsidiary);
(iv) any deposits to secure public or statutory obligations
of the Guarantor or any of its Finance Subsidiaries,
other than any such deposit made as a result of or in
connection with the occurrence of any of the following
events or circumstances: (A) any Person shall engage
in any Prohibited Transaction involving any Plan, (B)
any Accumulated Funding Deficiency, whether or not
waived, shall exist with respect to any Plan, (C) a
Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable
Event or institution of proceedings is likely to result
in the termination of such Plan for purposes of Title
IV of ERISA, and, in the case of a Reportable Event,
the continuance of such Reportable Event unremedied for
ten days after notice of such Reportable Event pursuant
to Section 4043(a), (c) or (d) of ERISA is given or the
continuance of such proceedings for ten days after
commencement thereof, as the case may be, or (D) any
Single Employer Plan shall terminate for purposes of
Title IV of ERISA;
(v) any purchase money Liens in respect of fixed assets or
other physical or real properties heretofore or
hereafter acquired by the Guarantor or any of its
Finance Subsidiaries, or any Liens existing in respect
of such property at the time of acquisition thereof;
provided, however, that no such Lien shall extend to or
cover any other property of the Guarantor or such
Finance Subsidiary, as the case may be;
(vi) any Liens which are (A) in respect of fixed assets or
other physical properties of a Corporation which is not
a Finance Subsidiary as of the date hereof, and (B) in
existence at the time such corporation becomes a
Finance Subsidiary;
(vii) the extension, renewal or replacement of any Lien
permitted by paragraphs (i) through (v) above in
respect of the same property theretofore subject
thereto or the extension, renewal or replacement
(without increase of principal amount) of the
indebtedness secured thereby;
(viii) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings
if adequate reserves with respect thereto are
maintained on the books of the Guarantor or such
Finance Subsidiary, as the case may be, in accordance
with GAAP;
(ix) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising
in the ordinary course of business (A) which are not
overdue for a period of more than 60 days or (B) which
are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto
are maintained on the books of the Guarantor or such
Finance Subsidiary, as the case may be, in accordance
with GAAP;
(x) easements, rights-of-way, zoning and similar
restrictions and other similar encumbrances or title
defects incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from
the value of the property subject thereto or interfere
with the ordinary conduct of the business of the
Guarantor or its Finance Subsidiary;
(xi) any attachment or judgment lien, unless the judgment it
secures shall not, within 30 days after the entry
thereof, have been discharged or execution thereof
stayed pending appeal, or shall not have been
discharged within 30 days after the expiration of any
such stay;
(xii) Liens granted on assets in connection with leveraged
leases and project financing entered into in the
ordinary course of the Finance Business; and
(xiii) Liens to secure Indebtedness and other obligations of
the Guarantor or any of its Finance Subsidiaries not
otherwise permitted by this Section 8.02(c), but only
to the extent that the aggregate amount of Indebtedness
and other obligations secured thereby does not at any
time exceed US$100,000,000.
(2) The Guarantor will not permit any Domestic Subsidiary that is not
a Finance Subsidiary to create, assume or incur, or suffer to be created,
assumed or incurred or to exist, any Lien in respect of any property of any
character of such Domestic Subsidiary, whether heretofore or hereafter
acquired, excluding, however, from the operation of this covenant:
(i) Liens on property of such Domestic Subsidiary that
would be permitted under Section 8.02(c)(1) if such
Domestic Subsidiary were a Finance Subsidiary;
(ii) Liens on property of such Domestic Subsidiary that are
incurred in the ordinary course of the Finance Business
or the Real Estate Business of such Domestic
Subsidiary; and
(iii) Liens on any property of such Domestic Subsidiary if
such Domestic Subsidiary is a "single purpose" entity
formed for the purpose of holding title to such
property and engages in no activities other than those
related to holding title to such property.
(3) Nothing in this Section 8.02(c) shall allow the Borrower and its
Subsidiaries to create, assume or incur or suffer to be created, assumed or
incurred or to exist any Lien not permitted by the provisions of the Credit
Agreement.
ARTICLE IX
NOTICE
Section 9.01 - Notice
Any notice or demand to or upon the Guarantor to be effective,
shall be in writing or by telecopy or telegraph, and shall not be effective
until received and shall be addressed as follows:
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan
U.S.A. 48034
Attention: Treasurer
Telecopier: (810) 948-3801
Any such notice or demand, if telecopied before 4:30 p.m. on a
U.S. Business Day, shall be deemed to have been received on that day, and,
if telecopied after 4:30 p.m. on a U.S. Business Day, shall be deemed to
have been received on the U.S. Business Day next following the date of
transmission.
ARTICLE X
MISCELLANEOUS
Section 10.01 - Amendment, Etc.
No amendment, modification or waiver of any provision of this
Guarantee or consent to any departure by the Guarantor or any other Person
from any provision of this Guarantee will in any event be effective unless
it is signed by the Guarantor and the Agent, with the written consent of
all the Guaranteed Parties, on behalf of the Guaranteed Parties.
Section 10.02 - Assignment, Transfer and Participation
(a) The Guarantor hereby consents to any assignment or transfer of,
or any grant of the participation in, any rights, benefits or obligations
of, a Lender in respect of this Guarantee so long as the participation or
assignment of such Lender's interest in the Credit Agreement is effected in
accordance with the provisions of the Credit Agreement.
(b) Notwithstanding the provisions of Section 10.02(a), the Guarantor
shall upon request made by an assignee from a Lender, execute and deliver
such assurances as may be reasonably requested by such assignee to confirm
its entitlement to the rights and benefits hereunder so assigned and
transferred to it and the liability of the Guarantor to the assignee
hereunder.
Section 10.03 - Acknowledgement by CFC re: Increased Commitments
The Guarantor acknowledges and agrees that any Lender which
increases its Commitment pursuant to the provisions of Section 17.06 of the
Credit Agreement shall also be entitled to the benefit of this Guarantee in
respect of the increased amount of its Commitment and the obligations of
the Guarantor under this Guarantee shall in no way be varied or diminished
by virtue of such increase in Commitment; and the Guarantor further
acknowledges and agrees that this Guarantee shall extend to all
Obligations, including any Borrowings under the Credit Agreement after any
increase in the Total Commitment resulting from the increase in a Lender's
Commitment pursuant to Section 17.06 of the Credit Agreement.
Section 10.04 - Acknowledgement by CFC re: New Lenders
The Guarantor acknowledges and agrees that any Chartered Bank
which becomes a New Lender pursuant to the provisions of Section 17.05 of
the Credit Agreement shall be entitled to the benefit of this Guarantee as
if such New Lender had been a Lender as at the time of execution of the
Guarantee and the obligations of the Guarantor under this Guarantee shall
in no way be varied or diminished by virtue of the addition of such New
Lenders; and the Guarantor further acknowledges and agrees that this
Guarantee shall extend to all Obligations including any Borrowings under
the Credit Agreement after any increases in the Total Commitment resulting
from the addition of New Lenders pursuant to Section 17.05 of the Credit
Agreement.
Section 10.05 - Exchange of Information
The Guarantor agrees that the Agent and each Lender may disclose
to any prospective assignee or participant, on a confidential basis, such
information concerning the financial condition of the Guarantor or any
Subsidiary which the Borrower or Guarantor is required to provide to the
Agent or the Lenders under the Credit Agreement or this Guarantee.
Section 10.06 - Successor Agent
In the event that the Agent for the time being under the Credit
Agreement shall resign or be removed and a successor agent thereafter shall
be appointed in accordance with Section 14.07 of the Credit Agreement, then
upon such successor agent agreeing in writing to be bound by the provisions
of this Guarantee as Agent hereunder, all references herein to Agent in
this Guarantee shall be deemed to be references to such successor agent as
and from such date and such successor agent shall receive and become vested
with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from
its further duties and obligations as Agent under this Guarantee.
Section 10.07 - Judgment Currency
If for the purposes of obtaining judgment in any court in any
jurisdiction with respect to this Guarantee, it becomes necessary to
convert into the currency of such jurisdiction (herein called the "Judgment
Currency") any amount due hereunder in any currency other than the Judgment
Currency, then conversion shall be made at the rate of exchange prevailing
on the Business Day before the day on which judgment is given. For this
purpose, "rate of exchange" means the rate at which the Agent would, on the
relevant date at or about 12:00 noon (Toronto time), be prepared to sell a
similar amount of such currency in Toronto against the Judgment Currency.
In the event that there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is given and
the date of payment of the amount due, the Guarantor will, on the date of
payment, pay such additional amounts (if any) as may be necessary to ensure
that the amount paid on such date is the amount in the Judgment Currency
which when converted at the rate of exchange prevailing on the date of
payment is the amount then due under this Guarantee in such other currency.
Any additional amount due from the Guarantor under this Section 10.07 will
be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Guarantee.
Section 10.08 - Applicable Law
This Guarantee shall be conclusively deemed to be a contract made
under, and shall for all purposes be governed by, and construed and
interpreted in accordance with, the laws of the Province of Ontario and the
federal laws of Canada applicable therein in effect from time to time
without prejudice to or limitation of any other rights or remedies
available under the laws of any jurisdiction where property or assets of
the Guarantor may be found.
Section 10.09 - Jurisdiction
(a) The Guarantor hereby irrevocably agrees that any suits, actions
or proceedings arising out of or in connection with this Guarantee
(collectively "Proceedings") may be brought in any Michigan State Court or
any U.S. Federal Court sitting in the State of Michigan or any court in the
Province of Ontario and submits and attorns to the non-exclusive
jurisdiction of each such court.
(b) The Guarantor hereby irrevocably waives any objections which it
may have now or hereafter to the laying of the venue of any Proceedings in
any court referred to in paragraph (a) and any claim that any such
Proceedings have been brought in an inconvenient forum and further
irrevocably agrees that a judgment in any Proceedings brought in any such
court shall be conclusive and binding upon the Guarantor and may be
enforced in any courts to the jurisdiction of which such parties may be
subject by Proceedings upon such judgment.
(c) Nothing contained in this Section 10.09 shall limit the right of
the Agent or any other Guaranteed Party to take Proceedings against the
Guarantor in any other court of competent jurisdiction nor shall the taking
of Proceedings in one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction, whether concurrently or not.
(d) The Guarantor hereby irrevocably:
(i) appoints the Borrower at its address for service or
delivery of notice in the Credit Agreement as its agent
for service of process in the Province of Ontario in
connection with any Proceedings in the Province of
Ontario and consents to process being served in any
Proceedings in the Province of Ontario by delivering or
transmitting a true copy thereof to the Borrower at
such address;
(ii) agrees that service in accordance with the provisions
of clause 10.9(d)(i) shall be deemed in every respect
effective service of process upon the Guarantor in any
such Proceedings and shall, to the fullest extent
permitted by law, be taken and be held to be valid
personal service upon and personal delivery to the
Guarantor; and
(iii) consents generally to the fullest extent permitted by
law in respect of any Proceedings to the giving of any
relief and the issue of any process in connection with
such Proceedings including the making, enforcement or
execution against any property whatsoever
(irrespective of its use or intended use) of any order
or judgment which may be made or given in such
Proceedings.
(e) Each of the Guarantor and the Guaranteed Parties hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of
or relating to the Credit Agreement or this Guarantee, the transactions
contemplated hereby or thereby or the actions of the Guarantor or any
Guaranteed party in the negotiation, administration, performance or
enforcement hereof or thereof.
Section 10.10 - Costs and Expenses
The Guarantor agrees, on demand, to pay or reimburse each
Guaranteed Party for all costs, fees and expenses (other than legal fees
and disbursements) incurred in connection with the enforcement or
preservation of any rights under this Guarantee and under any other
documents prepared in connection herewith or therewith, and the reasonable
fees and disbursements of one firm of counsel to the Guaranteed Parties.
Section 10.11 - No Waiver, Cumulative Remedies
No failure to exercise and no delay in exercising, on the part of
the Agent or the other Guaranteed Parties, any right, remedy, power or
privilege hereunder or under the Credit Agreement, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or under the Credit Agreement preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges
herein and under the Credit Agreement are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
Section 10.12 - Waiver of Rights of Subrogation, Reimbursement, Etc.
The Guarantor hereby irrevocably waives any claim or other rights
that it may now or hereafter acquire against the Borrower that arise from
the existence, payment, performance or enforcement of the Guaranteed
Liabilities under this Guarantee or the Credit Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim
or remedy of any Guaranteed Party against the Borrower or any collateral,
whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including the right to take or receive
from the Borrower, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such
claim, remedy or right. If any amount shall be paid to the Guarantor in
violation of the preceding sentence at any time prior to the later of the
payment in full of the Guaranteed Liabilities and all other amounts payable
under this Guarantee and the termination of the Commitments, such amount
shall be held in trust for the benefit of the Guaranteed Parties and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Liabilities and all other amounts payable under this Guarantee, whether
matured or unmatured, in accordance with the terms of the Credit Agreement,
or to be held as collateral for any Guaranteed Liabilities or other amounts
payable under this Guarantee thereafter arising. The Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that the
waiver set forth in this Section 10.12 is knowingly made in contemplation
of such benefits.
Section 10.13 - Survival of Obligations; No Set-off
Without prejudice to the survival of the other obligations of the
Guarantor hereunder, the obligations of the Guarantor under Section 3.01(b)
and (c) shall survive payment in full of the Guaranteed Liabilities.
All payments to be made by or on behalf of the Guarantor
hereunder shall be made without giving effect to any defence or right of
set-off or counterclaim which may be asserted by the Borrower or the
Guarantor.
Section 10.14 - Guarantee in Addition to Other Obligations
The obligations of the Guarantor under this Agreement are in
addition to and not in substitution for any other obligations to the Agent
or to any of the Guaranteed Parties in relation to the Credit Agreement and
any guarantees or security at any time held by or for the benefit of any of
them.
Section 10.15 - Entire Agreement
This Guarantee, including all documents contemplated hereby,
constitutes the entire agreement between the parties with respect to the
subject matter and supersedes all prior negotiations, undertakings,
representations and understandings.
Section 10.16 - Severability
Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 10.17 - Successors and Assignees
This Agreement shall be binding upon and inure to the benefit of
the Guarantor and the Agent and the other Guaranteed Parties and their
respective successors and permitted assignees, except that the Guarantor
may not assign any of its obligations hereunder.
Section 10.18 - Counterparts
This Guarantee and the acceptance thereof may be executed in any
number of separate counterparts and all said counterparts taken together
shall be deemed to constitute one and the same instrument.
Section 10.19 - Effective Date
This Guarantee shall become effective on the Effective Date.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
duly executed and delivered by its proper and duly authorized officers as
of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION
By: "David A. Robison"
Title: "Vice President and Treasurer"
The undersigned hereby accept the foregoing Guarantee as of the
day and year first above written.
ROYAL BANK OF CANADA
As Agent
By: "David W. Cox"
Title: "Senior Manager, Loan Syndications
and Asset Sales"
CANADIAN IMPERIAL BANK OF COMMERCE
As Co-Agent
By: "Harold Chataway"
Title: "Managing Director
Automotive Group
North American Corporate Banking"
THE BANK OF NOVA SCOTIA
As Co-Agent
By: "Cynthia P. Thomas"
Title: "Senior Relationship Manager"
By: "Anthony S. Courtright"
Title: "Unit Head"
ROYAL BANK OF CANADA
By: "R.E. (Ron) Stanley"
Title: "Senior Vice Prsident
Corporate Banking - Multinational"
By: "Glen D. Carter"
Title: "Senior Manager
Corporate Banking - Multinational"
CANADIAN IMPERIAL BANK OF
COMMERCE
By: "Harold Chataway"
Title: "Managing Director
Automotive Group
North American Corporate Banking"
THE BANK OF NOVA SCOTIA
By: "Cynthia P. Thomas"
Title: "Senior Relationship Manager"
By: "Anthony S. Courtright"
Title: "Unit Head"
BANK OF MONTREAL
By: "Surjit Rajpal"
Title: "Managing Director
Diversified Corporate Accounts,
Corporate Banking"
By: "Kevin J. Malone"
Title: "Director"
THE TORONTO-DOMINION BANK
By: "Karl H. Schulz"
Title: "Assistant Vice President
Corporate & Investment Banking Group"
BANK OF AMERICA CANADA
By: "Jai S. Menon"
Title: "Vice President"
CHEMICAL BANK OF CANADA
By: "William T. Carrothers"
Title: "Vice President"
By: "Owen G. Roberts"
Title: "Vice President"
CREDIT LYONNAIS CANADA
By: "David J. Farmer"
Title: "Vice President"
CREDIT SUISSE CANADA
By: "Alain Daoust"
Title: "Associate"
By: "Angelo Bisutti"
Title: "Associate"
MORGAN BANK OF CANADA
By: "Katharine B. Stevenson"
Title: "Vice President"
NATIONAL BANK OF CANADA
By: "Lili L. Shain"
Title: "Vice President
North American Corporate Banking"
By: "Anne L. Brown"
Title: "Manager"
ABN AMRO BANK CANADA
By: "Joseph Cavanaugh"
Title: "Vice President
Corporate Banking"
By: "David Lam"
Title: "Manager, Credit"
BANQUE NATIONALE DE PARIS (CANADA)
By: "Mark B. Kolada"
Title: "Vice President & Deputy
Branch Manager"
By: "Linda L. Barrett"
Title: "Account Officer"
SWISS BANK CORPORATION (CANADA)
By: "Blaise Ganguin"
Title: "Associate Director
Merchant Banking"
By: "Robin V.J. Scott"
Title: "Director
Merchant Banking"
UNION BANK OF SWITZERLAND (CANADA)
By: "Cheryl Tibbetts"
Title: "Senior Account Officer"
By: "Mark O. Bohn"
Title: "Assistant Vice President
Corporate & Institutional Banking"
DAI-ICHI KANGYO BANK (CANADA)
By: "M. Takemoto"
Title: "Vice President
Corporate Banking"
DRESDNER BANK CANADA
By: "William J. Eeuwes"
Title: "Vice President"
By: "Ramona Sankar"
Title: "Assistant Treasurer"
NATIONAL WESTMINSTER BANK OF CANADA
By: "Neil L. Stride"
Title: "Vice President"
By: "Paula McArdle"
Title: "Assistant Vice President"
SOCIETE GENERALE (CANADA)
By: "Eric Dhoste"
Title: "Senior Vice President
Ontario & Western Canada"
By: "Duncan Irvine
Title: "Senior Manager
Corporate Banking"
THE BANK OF TOKYO CANADA
By: "Ted S. Vanderlaan"
Title: "Assistant Vice President"
Exhibit 10-D
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.
as Borrower
CHRYSLER FINANCIAL CORPORATION
as Guarantor
ROYAL BANK OF CANADA
as Agent
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
as Co-Agents
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
CREDIT SUISSE CANADA
MORGAN BANK OF CANADA
NATIONAL BANK OF CANADA
ABN AMRO BANK CANADA
BANQUE NATIONALE DE PARIS (CANADA)
SWISS BANK CORPORATION (CANADA)
UNION BANK OF SWITZERLAND (CANADA)
DAI-ICHI KANGYO BANK (CANADA)
DRESDNER BANK CANADA
NATIONAL WESTMINSTER BANK OF CANADA
SOCIETE GENERALE (CANADA)
THE BANK OF TOKYO CANADA
as Lenders
___________________________________________________________________________
$810,000,000
REVOLVING CREDIT AGREEMENT
May 23, 1994
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
INTERPRETATION
1.01 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) "Acceptance Fee" . . . . . . . . . . . . . . . . . . . . 2
(b) "Acceptance Rate". . . . . . . . . . . . . . . . . . . . 2
(c) "Affiliate". . . . . . . . . . . . . . . . . . . . . . . 2
(d) "Agent". . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) "Agent's Account for Payments" . . . . . . . . . . . . . 3
(f) "Agent's Branch of Account". . . . . . . . . . . . . . . 3
(g) "Agreement". . . . . . . . . . . . . . . . . . . . . . . 3
(h) "Applicable Laws". . . . . . . . . . . . . . . . . . . . 3
(i) "Average Compensation" . . . . . . . . . . . . . . . . . 3
(j) "BA Discount Proceeds" . . . . . . . . . . . . . . . . . 4
(k) "BA Discount Rate" . . . . . . . . . . . . . . . . . . . 4
(l) "Bankers' Acceptance". . . . . . . . . . . . . . . . . . 4
(m) "Banking Day". . . . . . . . . . . . . . . . . . . . . . 4
(n) "BNS". . . . . . . . . . . . . . . . . . . . . . . . . . 4
(o) "Borrower" . . . . . . . . . . . . . . . . . . . . . . . 4
(p) "Borrowing". . . . . . . . . . . . . . . . . . . . . . . 4
(q) "Branch of Account". . . . . . . . . . . . . . . . . . . 5
(r) "Business Day" . . . . . . . . . . . . . . . . . . . . . 5
(s) "Canadian Dollar Amount" . . . . . . . . . . . . . . . . 5
(t) "Canadian Dollars" . . . . . . . . . . . . . . . . . . . 5
(u) "Capital Leases" . . . . . . . . . . . . . . . . . . . . 5
(v) "Capital Notes". . . . . . . . . . . . . . . . . . . . . 5
(w) "CDOR Rate". . . . . . . . . . . . . . . . . . . . . . . 5
(x) "CFC". . . . . . . . . . . . . . . . . . . . . . . . . . 6
(y) "CFC 1994 Credit Agreement". . . . . . . . . . . . . . . 6
(z) "Change in Capital Requirement". . . . . . . . . . . . . 6
(aa) "Chartered Bank" . . . . . . . . . . . . . . . . . . . . 6
(ab) "Chrysler Canada". . . . . . . . . . . . . . . . . . . . 6
(ac) "Chrysler Corporation" . . . . . . . . . . . . . . . . . 6
(ad) "CIBC" . . . . . . . . . . . . . . . . . . . . . . . . . 6
(ae) "Co-Agents". . . . . . . . . . . . . . . . . . . . . . . 6
(af) "Commitment" . . . . . . . . . . . . . . . . . . . . . . 6
(ag) "Consolidated Tangible Net Worth". . . . . . . . . . . . 6
(ah) "Conversion Date". . . . . . . . . . . . . . . . . . . . 7
(ai) "Credit Facility". . . . . . . . . . . . . . . . . . . . 7
(aj) "D&P". . . . . . . . . . . . . . . . . . . . . . . . . . 7
(ak) "Drawdown Date". . . . . . . . . . . . . . . . . . . . . 7
(al) "Effective Date" . . . . . . . . . . . . . . . . . . . . 7
(am) "Equivalent Amount". . . . . . . . . . . . . . . . . . . 7
(an) "Event of Default" . . . . . . . . . . . . . . . . . . . 7
(ao) "Existing Credit Agreement". . . . . . . . . . . . . . . 8
(ap) "Facility Fee Rate". . . . . . . . . . . . . . . . . . . 8
(aq) "Final Date" . . . . . . . . . . . . . . . . . . . . . . 8
(ar) "Final Utilization Period" . . . . . . . . . . . . . . . 8
(as) "Finance Business" . . . . . . . . . . . . . . . . . . . 8
(at) "Finance Subsidiary" . . . . . . . . . . . . . . . . . . 8
(au) "Fitch". . . . . . . . . . . . . . . . . . . . . . . . . 8
(av) "GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . 8
(aw) "Governmental Authority" . . . . . . . . . . . . . . . . 8
(ax) "Guarantee". . . . . . . . . . . . . . . . . . . . . . . 9
(ay) "Increased Costs". . . . . . . . . . . . . . . . . . . . 9
(az) "Indebtedness" . . . . . . . . . . . . . . . . . . . . . 9
(ba) "Interest Date". . . . . . . . . . . . . . . . . . . . . 9
(bb) "Interest Determination Date". . . . . . . . . . . . . . 9
(bc) "Interest Payment Date". . . . . . . . . . . . . . . . . 9
(bd) "Lenders". . . . . . . . . . . . . . . . . . . . . . . . 9
(be) "Lender's Proportion". . . . . . . . . . . . . . . . . . 9
(bf) "Level". . . . . . . . . . . . . . . . . . . . . . . . . 9
(bg) "Level I". . . . . . . . . . . . . . . . . . . . . . . . 9
(bh) "Level II" . . . . . . . . . . . . . . . . . . . . . . . 9
(bi) "Level III". . . . . . . . . . . . . . . . . . . . . . . 9
(bj) "Level IV" . . . . . . . . . . . . . . . . . . . . . . . 10
(bk) "Level V". . . . . . . . . . . . . . . . . . . . . . . . 10
(bl) "Libor". . . . . . . . . . . . . . . . . . . . . . . . . 10
(bm) "Libor Interest Date". . . . . . . . . . . . . . . . . . 10
(bn) "Libor Interest Period". . . . . . . . . . . . . . . . . 11
(bo) "Libor Loan" . . . . . . . . . . . . . . . . . . . . . . 11
(bp) "Libor Margin" . . . . . . . . . . . . . . . . . . . . . 11
(bq) "Libor Repayment Date" . . . . . . . . . . . . . . . . . 11
(br) "Lien" . . . . . . . . . . . . . . . . . . . . . . . . . 11
(bs) "Loan" . . . . . . . . . . . . . . . . . . . . . . . . . 11
(bt) "Majority Lenders" . . . . . . . . . . . . . . . . . . . 12
(bu) "Maturity Date". . . . . . . . . . . . . . . . . . . . . 12
(bv) "Moody's". . . . . . . . . . . . . . . . . . . . . . . . 12
(bw) "New Lender" . . . . . . . . . . . . . . . . . . . . . . 12
(bx) "Obligations". . . . . . . . . . . . . . . . . . . . . . 12
(by) "Permitted Encumbrances" . . . . . . . . . . . . . . . . 12
(bz) "Person" . . . . . . . . . . . . . . . . . . . . . . . . 13
(ca) "Prime Loan" . . . . . . . . . . . . . . . . . . . . . . 14
(cb) "Prime Rate" . . . . . . . . . . . . . . . . . . . . . . 14
(cc) "Prime Rate Margin". . . . . . . . . . . . . . . . . . . 14
(cd) "Quarterly Utilization Period" . . . . . . . . . . . . . 14
(ce) "Rating Agencies". . . . . . . . . . . . . . . . . . . . 14
(cf) "Receivables". . . . . . . . . . . . . . . . . . . . . . 14
(cg) "Royal". . . . . . . . . . . . . . . . . . . . . . . . . 14
(ch) "S&P". . . . . . . . . . . . . . . . . . . . . . . . . . 14
(ci) "Schedules". . . . . . . . . . . . . . . . . . . . . . . 14
(cj) "Short-Term Fixed Rate Loan" . . . . . . . . . . . . . . 14
(ck) "Short-Term Fixed Rate Margin" . . . . . . . . . . . . . 15
(cl) "Significant Subsidiary" . . . . . . . . . . . . . . . . 15
(cm) "Special Purpose Subsidiary" . . . . . . . . . . . . . . 15
(cn) "Status" . . . . . . . . . . . . . . . . . . . . . . . . 15
(co) "Subsidiary" . . . . . . . . . . . . . . . . . . . . . . 15
(cp) "Tax". . . . . . . . . . . . . . . . . . . . . . . . . . 15
(cq) "Terminated Lender". . . . . . . . . . . . . . . . . . . 16
(cr) "Total Commitment" . . . . . . . . . . . . . . . . . . . 16
(cs) "Tranche A Facility" . . . . . . . . . . . . . . . . . . 16
(ct) "Tranche B Facility" . . . . . . . . . . . . . . . . . . 16
(cu) "United States Dollars". . . . . . . . . . . . . . . . . 16
(cv) "US Base Rate" . . . . . . . . . . . . . . . . . . . . . 16
(cw) "Utilization". . . . . . . . . . . . . . . . . . . . . . 16
(cx) "Utilization Period" . . . . . . . . . . . . . . . . . . 16
1.02 - Headings and Table of Contents. . . . . . . . . . . . . . . . 16
1.03 - References. . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.04 - Rules of Interpretation . . . . . . . . . . . . . . . . . . . 17
1.05 - Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . 17
1.06 - Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 - Representations and Warranties of the Borrower. . . . . . . . 17
(a) Status . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Power. . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) No Conflict. . . . . . . . . . . . . . . . . . . . . . . 18
(d) Binding Effect . . . . . . . . . . . . . . . . . . . . . 18
(e) Litigation . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Compliance with Other Instruments: . . . . . . . . . . . 18
(g) No Default . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Financial Statements . . . . . . . . . . . . . . . . . . 19
(i) Reports, etc.. . . . . . . . . . . . . . . . . . . . . . 19
(j) No Material Adverse Change . . . . . . . . . . . . . . . 19
(k) Title. . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 19
(m) Compliance with Laws . . . . . . . . . . . . . . . . . . 19
2.02 - Deemed Repetition . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III
THE TRANCHE A FACILITY
3.01 - Obligation of each of the Lenders . . . . . . . . . . . . . . 20
3.02 - Manner of Borrowing under the Tranche A Facility. . . . . . . 20
3.03 - Repayment of Tranche A Facility Borrowings. . . . . . . . . . 21
3.04 - No Pro Rata Allocation. . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV
THE TRANCHE B FACILITY
4.01 - Obligation of each of the Lenders . . . . . . . . . . . . . . 22
4.02 - Manner of Borrowing under the Tranche B Facility by way
of Prime Loans and Libor Loans. . . . . . . . . . . . . . . . 22
4.03 - Pro Rata Treatment of Borrowings. . . . . . . . . . . . . . . 24
4.04 - Repayment of Tranche A Facility Borrowings Using
Tranche B Facility. . . . . . . . . . . . . . . . . . . . . . 24
4.05 - Repayment under the Tranche B Facility. . . . . . . . . . . . 25
4.06 - Conversion Option . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V
THE CREDIT FACILITY
5.01 - Borrowings During the Term of this Agreement. . . . . . . . . 26
5.02 - Cancellation During the Term of This Agreement. . . . . . . . 26
5.03 - Repayment of Borrowings on Maturity Date. . . . . . . . . . . 26
5.04 - Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.05 - Reliance on Oral Instructions . . . . . . . . . . . . . . . . 27
ARTICLE VI
INTEREST, FEES, COSTS AND EXPENSES
6.01 - Payment of Interest on Prime Loans. . . . . . . . . . . . . . 27
6.02 - Payment of Interest on Short-Term Fixed Rate
Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.03 - Payment of Interest on Libor Loans. . . . . . . . . . . . . . 28
6.04 - Utilization . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.05 - Default Interest and Indemnity. . . . . . . . . . . . . . . . 29
6.06 - Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . 29
6.07 - Agency Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.08 - Computation of Interest for Interest Act Purposes . . . . . . 30
6.09 - Limit on Rate of Interest . . . . . . . . . . . . . . . . . . 30
6.10 - Increased Costs . . . . . . . . . . . . . . . . . . . . . . . 30
6.11 - Changes in Capital Requirements . . . . . . . . . . . . . . . 31
6.12 - Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.13 - Substitute Basis of Libor Borrowing . . . . . . . . . . . . . 34
6.14 - Indemnity for Libor Loans and Short-Term Fixed Rate
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.15 - Replacement of Lenders. . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII
BANKERS' ACCEPTANCES
7.01 - Issue of Bankers' Acceptances . . . . . . . . . . . . . . . . 36
7.02 - Conditions Applicable to Bankers' Acceptances . . . . . . . . 36
(a) Notice . . . . . . . . . . . . . . . . . . . . . . . . . 36
(b) Minimum Borrowing. . . . . . . . . . . . . . . . . . . . 37
(c) Face Amounts . . . . . . . . . . . . . . . . . . . . . . 37
(d) Term . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(e) Bankers' Acceptances in Blank. . . . . . . . . . . . . . 37
(f) Execution of Bankers' Acceptances. . . . . . . . . . . . 37
(g) Issuance of Bankers' Acceptances . . . . . . . . . . . . 38
(h) Acceptance of Bankers' Acceptances . . . . . . . . . . . 38
(i) Purchase of Bankers' Acceptances . . . . . . . . . . . . 38
(j) Sale of Bankers' Acceptances . . . . . . . . . . . . . . 38
(k) Waiver of Presentment and Other Conditions . . . . . . . 38
7.03 - Repayment of Bankers' Acceptances . . . . . . . . . . . . . . 39
7.04 - Acceptance Fees . . . . . . . . . . . . . . . . . . . . . . . 39
7.05 - Cash Cover Accounts . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
PAYMENTS AND EVIDENCE OF INDEBTEDNESS
8.01 - Place and Currency of Payment . . . . . . . . . . . . . . . . 40
8.02 - Application of Payments Prior to an Event of Default. . . . . 40
8.03 - Manner of Payment and Taxes . . . . . . . . . . . . . . . . . 40
8.04 - No Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.05 - Evidence of Indebtedness. . . . . . . . . . . . . . . . . . . 41
ARTICLE IX
CONDITIONS PRECEDENT
9.01 - Conditions to Effectiveness . . . . . . . . . . . . . . . . . 42
9.02 - Conditions Precedent to all Borrowings. . . . . . . . . . . . 44
9.03 - Waiver of a Condition Precedent . . . . . . . . . . . . . . . 44
9.04 - Existing Credit Agreement . . . . . . . . . . . . . . . . . . 44
ARTICLE X
COVENANTS OF THE BORROWER
10.01 - Affirmative Covenants of the Borrower. . . . . . . . . . . . 45
(1) Financial Statements, etc. . . . . . . . . . . . . . . . 45
(2) Payment and Performance of Obligations.. . . . . . . . . 46
(3) Maintenance of Existence and Property. . . . . . . . . . 47
(4) Notices. . . . . . . . . . . . . . . . . . . . . . . . . 47
(5) Change in Debt Ratings . . . . . . . . . . . . . . . . . 48
10.02 - Negative Covenants of the Borrower . . . . . . . . . . . . . 48
(1) Consolidated Tangible Net Worth. . . . . . . . . . . . . 48
(2) Limitation on Transactions with Affiliates.. . . . . . . 48
(3) Limitation on Fundamental Changes. . . . . . . . . . . . 48
(4) Limitation on Liens. . . . . . . . . . . . . . . . . . . 49
ARTICLE XI
REIMBURSEMENT OF EXPENSES
11.01 - Reimbursement of Expenses. . . . . . . . . . . . . . . . . . 50
ARTICLE XII
EVENTS OF DEFAULT
12.01 - Events of Default. . . . . . . . . . . . . . . . . . . . . . 51
12.02 - Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 53
12.03 - Waiver of Default. . . . . . . . . . . . . . . . . . . . . . 54
12.04 - Application and Sharing of Payments Following
Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XIII
REMEDIES
13.01 - Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . 55
13.02 - Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
13.03 - Lenders May Perform Covenants. . . . . . . . . . . . . . . . 56
ARTICLE XIV
THE AGENT AND THE LENDERS
14.01 - Authorization of Agent . . . . . . . . . . . . . . . . . . . 56
14.02 - Arrangements for Tranche B Facility Borrowings . . . . . . . 56
14.03 - Arrangements for Repayment of Tranche B Facility
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 57
14.04 - Repayment by Lenders to Agent. . . . . . . . . . . . . . . . 57
14.05 - Disclaimer of Agent. . . . . . . . . . . . . . . . . . . . . 58
14.06 - Acknowledgement of Lenders . . . . . . . . . . . . . . . . . 58
14.07 - Successor Agent. . . . . . . . . . . . . . . . . . . . . . . 59
14.08 - Notices Between the Lenders and the Agent. . . . . . . . . . 59
14.09 - Relations with Borrower and CFC. . . . . . . . . . . . . . . 59
14.10 - Reliance by Agent on Notices, etc. . . . . . . . . . . . . . 59
14.11 - Reimbursement for Agent's Expenses . . . . . . . . . . . . . 60
14.12 - Action by Agent. . . . . . . . . . . . . . . . . . . . . . . 60
14.13 - Waivers, Amendments, etc.. . . . . . . . . . . . . . . . . . 60
(a) In Writing . . . . . . . . . . . . . . . . . . . . . . . 60
(b) Agent's Consent. . . . . . . . . . . . . . . . . . . . . 60
(c) Unanimous Consent. . . . . . . . . . . . . . . . . . . . 60
14.14 - Failure to Act . . . . . . . . . . . . . . . . . . . . . . . 61
14.15 - Agent's Duty to Deliver Documents, etc. Obtained from
the Borrower and CFC . . . . . . . . . . . . . . . . . . . . 61
14.16 - No Partnership . . . . . . . . . . . . . . . . . . . . . . . 62
14.17 - Adjustments Among Lenders. . . . . . . . . . . . . . . . . . 62
14.18 - Amendment of this Article XIV. . . . . . . . . . . . . . . . 63
14.19 - Indemnification of Agent . . . . . . . . . . . . . . . . . . 63
14.20 - The Co-Agents. . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XV
SUCCESSORS AND ASSIGNS, JUDGMENT CURRENCY AND
GOVERNING LAW
15.01 - Successors and Assigns; Participations . . . . . . . . . . . 64
15.02 - Judgment Currency. . . . . . . . . . . . . . . . . . . . . . 65
15.03 - Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 65
15.04 - Submission to Jurisdiction . . . . . . . . . . . . . . . . . 65
ARTICLE XVI
NOTICE
16.01 - Form and Address for Notice. . . . . . . . . . . . . . . . . 66
ARTICLE XVII
MISCELLANEOUS
17.01 - Severability . . . . . . . . . . . . . . . . . . . . . . . . 66
17.02 - Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 66
17.03 - Further Assurances . . . . . . . . . . . . . . . . . . . . . 66
17.04 - Term of Agreement. . . . . . . . . . . . . . . . . . . . . . 67
17.05 - New Lenders. . . . . . . . . . . . . . . . . . . . . . . . . 67
17.06 - Increase in Commitments. . . . . . . . . . . . . . . . . . . 67
17.07 - Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . 68
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is made as of the 23rd day of
May, 1994
B E T W E E N:
CHRYSLER CREDIT CANADA LTD., a corporation incorporated under the
laws of Canada, having its registered office at Suite 201, 2233
Argentia Road, in the City of Mississauga, Province of Ontario,
L5N 2X7, Canada,
- and -
each of the banks named on the signature pages hereto or which
become Lenders,
- and -
ROYAL BANK OF CANADA, a Canadian chartered bank having its head
office in the City of Montreal, Province of Quebec, and a branch
in the City of Toronto, Province of Ontario, in its capacity as
Agent,
- and -
CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered bank
having its head office in the City of Toronto, Province of
Ontario, and a branch in the City of Toronto, Province of
Ontario, in its capacity as Co-Agent,
- and -
THE BANK OF NOVA SCOTIA, a Canadian chartered bank having its
head office in the City of Halifax, Province of Nova Scotia, and
a branch in the City of Toronto, Province of Ontario, in its
capacity as Co-Agent.
WHEREAS the Borrower, has requested that the Agent, the Co-Agents
and the Lenders enter into this Revolving Credit Agreement for the purpose
of providing the Borrower with a credit facility in the initial amount of
eight hundred and ten million Canadian Dollars ($810,000,000) or the
Equivalent Amount in United States Dollars;
AND WHEREAS the Borrower is a Subsidiary of CFC;
AND WHEREAS to induce the Agent, the Co-Agents and the Lenders to
enter into this Revolving Credit Agreement with the Borrower and for other
good and valuable consideration, CFC has agreed to enter into the Guarantee
pursuant to which it will guarantee the Borrower's Obligations;
NOW THEREFORE, in consideration of the premises, the mutual
covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the parties agree as
follows:
ARTICLE I
INTERPRETATION
Section 1.01 - Definitions
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
(a) "Acceptance Fee" means the fee payable to each Lender in respect
of Bankers' Acceptances computed in accordance with Section 7.04;
(b) "Acceptance Rate" means, in respect of any Bankers' Acceptance
accepted by a Lender on any day, the applicable percentage per
annum set forth below based on the Status and Utilization on such
day (provided that if the Commitments have been terminated prior
to such date, the Utilization for such date shall be deemed to be
greater than 33-1/3%):
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
Status Status Status Status Status
<S> <C> <C> <C> <C> <C>
If Utilization
is less than
or equal to
33-1/3%: 0.3125% 0.4000% 0.4000% 0.5000% 0.7500%
If Utilization
is greater
than 33-1/3%: 0.4375% 0.5250% 0.5250% 0.6250% 0.8750%
</TABLE>
(c) "Affiliate" of any corporation means any Person which, directly
or indirectly, controls or is controlled by or is under common
control with such corporation. For the purposes of this
definition, "control" (including, with correlative meanings, the
terms, "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of voting securities or by contract or by any other
means whatsoever;
(d) "Agent" means Royal when acting in its capacity as agent
hereunder and includes any successor agent appointed pursuant to
Section 14.07;
(e) "Agent's Account for Payments" means:
(i) for all payments in Canadian Dollars, the following account
maintained by the Agent at its Toronto main branch, to
which payments and transfers are to be effected as follows:
Royal Bank of Canada, Toronto, Ontario, Swift Address:
ROYCCAT2, account number 0002-266-760-8, RBC Loan
Syndications, Toronto, Reference: "Chrysler Credit Canada
Ltd."; and
(ii) for all payments in US Dollars, the following account
maintained by the Agent at its Toronto main branch, to
which payments and transfers are to be effected as follows:
Royal Bank of Canada, Toronto, Ontario, transit number
0002, account number 408-919-9, RBC Loan Syndications,
Toronto, Reference: "Chrysler Credit Canada Ltd."
or such other account of the Agent as the Agent may at any time
advise the Borrower and the Lenders in writing;
(f) "Agent's Branch of Account" means the Loan Structuring and
Syndications office of the Agent located at South Tower, Royal
Bank Plaza, 200 Bay Street, Toronto, Ontario, Canada M5J 2J5 (Fax
No. (416) 974-2407) or such other office or branch of the Agent
in Canada as the Agent may at any time advise the Borrower and
the Lenders in writing;
(g) "Agreement" means this Revolving Credit Agreement, including the
Schedules, as further supplemented, amended, modified or restated
from time to time;
(h) "Applicable Laws" means, with respect to any Person, property,
transaction or event, all present or future applicable laws,
statutes, regulations, treaties, judgments and decrees and
(whether or not having the force of law) all applicable official
directives, rules, consents, approvals, authorizations,
guidelines, orders and policies of any governmental bodies or
Persons having authority over any such Person, property,
transaction or event;
(i) "Average Compensation" has the meaning given to that term in
Section 6.11(a);
(j) "BA Discount Proceeds" means, in respect of any Bankers'
Acceptance to be purchased by a Lender on any day under Section
7.02(g), an amount (rounded to the nearest whole cent, and with
one-half of one cent being rounded up) calculated on such day by
dividing:
(i) the face amount of such Bankers' Acceptance; by
(ii) the sum of one plus the product of:
(A) such Lender's BA Discount Rate (expressed as a
decimal) applicable to such Bankers' Acceptance; and
(B) a fraction, the numerator of which is the number of
days remaining in the term of such Bankers' Acceptance
and the denominator of which is the number of days in
the calendar year in which the Bankers' Acceptance is
issued, being three hundred and sixty-five (365) or
three hundred and sixty-six (366), as applicable;
with such product being rounded up or down to the fifth
decimal place and .000005 being rounded up;
(k) "BA Discount Rate" applicable to a Bankers' Acceptance being
purchased by a Lender on any day means the percentage discount
rate (expressed to two decimal places) determined by such Lender
to be the percentage discount rate at which such Lender would, in
accordance with its normal practices, at or about 10:00 a.m. on
such day, be prepared to purchase bankers' acceptances accepted
by such Lender having a comparable maturity date as the maturity
date of such Bankers' Acceptance;
(l) "Bankers' Acceptance" means a bill of exchange denominated in
Canadian Dollars drawn by the Borrower and accepted by a Lender
pursuant to Article VII;
(m) "Banking Day" means a Business Day on which dealings in US Dollar
deposits by and between banks in the London interbank market may
be conducted;
(n) "BNS" means The Bank of Nova Scotia and its successors;
(o) "Borrower" means Chrysler Credit Canada Ltd., a corporation
incorporated under the laws of Canada;
(p) "Borrowing" means a utilization of the Credit Facility by way of
a Prime Loan or Short-Term Fixed Rate Loan in the case of the
Tranche A Facility and by way of a Prime Loan, Libor Loan or the
acceptance of a Bankers' Acceptance in the case of the Tranche B
Facility;
(q) "Branch of Account" means, with respect to each Lender, the
branch or office of such Lender at the address set out opposite
such Lender's name on the signature pages hereto or, if
applicable, in a Supplement in the form and substance set out in
Schedule "L" or Schedule "N", or such other branch or office in
Canada as such Lender may advise the Borrower and the Agent in
writing provided that, for purposes of delivering any notice
required to be delivered by the Agent to a Lender pursuant to
Section 14.02 and for purposes of effecting any payments to a
Lender in connection with this Agreement, a Lender may specify in
writing any other branch or office of such Lender in Canada and
such branch or office shall thereafter be the Branch of Account
of such Lender for such purposes;
(r) "Business Day" means a day on which banks are open for business
in Toronto, Ontario, Canada but excludes Saturday, Sunday and any
other day which is a legal holiday in Toronto, Ontario, Canada
and, with respect to any day on which any payments are to be made
hereunder in US Dollars, also excludes a day on which commercial
banks in New York, New York are authorized or required by law to
close;
(s) "Canadian Dollar Amount" means for any amount on any particular
date the aggregate of:
(i) the portion, if any, of the amount on such date denominated
in Canadian Dollars, and
(ii) the Equivalent Amount in Canadian Dollars (determined on
such date) of the portion, if any, of the amount on such
date denominated in US Dollars;
(t) "Canadian Dollars" and the symbols "$" and "Cdn$" each means
lawful money of Canada;
(u) "Capital Leases" means, with respect to any Person, any lease or
other arrangement relating to property or assets which would be
required to be accounted for as a capital lease obligation on a
balance sheet of the Person if such balance sheet were prepared
in accordance with GAAP;
(v) "Capital Notes" shall mean any notes made by the Borrower in
favour of CFC that are issued for cash at par and are
subordinated substantially on the terms set out in Schedule "P"
in right of payment to the Obligations;
(w) "CDOR Rate" means, on any day, the annual rate of interest which
is the rate based on an average 30 day rate applicable to
Canadian Dollar bankers' acceptances appearing on the "Reuters
Screen CDOR Page" (as defined in the International Swap Dealer
Association, Inc. definitions, as modified and amended from time
to time) as of 10:00 a.m. on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day;
provided, however, if such rate does not appear on the Reuters
Screen CDOR Page as contemplated, then the CDOR Rate on any day
shall be calculated as the arithmetic mean of the 30 day rates
applicable to Canadian Dollar bankers' acceptances quoted by four
major Schedule I Chartered Banks as of 10:00 a.m. on such day, or
if such day is not a Business Day, then on the immediately
preceding Business Day. Initially, the four major Schedule I
Chartered Banks will be Bank of Montreal, BNS, Royal and CIBC.
If less than four of the institutions described in the
immediately preceding sentence quote the aforementioned rate on
the days and at the times described above, the "CDOR Rate" shall
be such other rate or rates as the parties may agree;
(x) "CFC" means Chrysler Financial Corporation, a corporation
incorporated under the laws of the State of Michigan, one of the
United States of America;
(y) "CFC 1994 Credit Agreement" means the Revolving Credit Agreement
dated as of May 23, 1994 between CFC as borrower, the commercial
banks party thereto, Chemical Bank as agent and Chemical
Securities Inc. as arranger;
(z) "Change in Capital Requirement" has the meaning given to that
term in Section 6.11(a);
(aa) "Chartered Bank" means a bank named on Schedule I or Schedule II
to the Bank Act (Canada);
(ab) "Chrysler Canada" means Chrysler Canada Ltd., a corporation
incorporated under the laws of Canada;
(ac) "Chrysler Corporation" means Chrysler Corporation, a corporation
incorporated under the laws of the State of Delaware, one of the
United States of America;
(ad) "CIBC" means Canadian Imperial Bank of Commerce and its
successors;
(ae) "Co-Agents" means CIBC and BNS when acting in their capacities as
co-agents hereunder;
(af) "Commitment" means, with respect to any Lender, the obligation of
such Lender to make available to the Borrower advances under the
Credit Facility in the aggregate outstanding amount of up to but
not exceeding the amount set opposite its name under the heading
Commitment on the signature pages of this Agreement (or its
Equivalent Amount in US Dollars in the case of Libor Loans), as
the same is increased or reduced from time to time in accordance
with the terms of this Agreement;
(ag) "Consolidated Tangible Net Worth" means, at any date, the amount
which would appear in accordance with GAAP on a consolidated
balance sheet of the Borrower and its Subsidiaries opposite the
heading "total shareholders' investment" (or any similar item)
plus the aggregate unpaid principal amount of the Capital Notes,
less the aggregate net book value (after deducting any reserves
applicable thereto) of all items of the following character which
are included in the consolidated assets of the Borrower and its
Subsidiaries:
(i) franchises, licences, permits, patents, patent
applications, copyrights, trademarks, trade names,
goodwill, experimental or organizational expense, and other
like intangibles,
(ii) deferred charges and prepaid expenses (other than prepaid
interest, insurance and taxes),
(iii) unamortized debt discount and expense,
(iv) assets which are pledged or deposited as security for or
for the purpose of paying any obligations, contingent or
otherwise, which are not included in consolidated
liabilities, and
(v) amounts in respect of capital stock, promissory notes and
other securities issued by the Borrower or a Subsidiary and
held in its treasury;
(ah) "Conversion Date" means the date which the Borrower notifies the
Agent at the Agent's Branch of Account as being the date on which
the Borrower has elected to convert a Borrowing or a portion of
it pursuant to Section 4.06;
(ai) "Credit Facility" means the Tranche A Facility and the Tranche B
Facility;
(aj) "D&P" means Duff & Phelps Credit Rating Company and its
successors.
(ak) "Drawdown Date" means a Business Day on which a Borrowing is to
be made by way of Loans or Bankers' Acceptances;
(al) "Effective Date" means the later of May 23, 1994 and the date on
which the conditions set forth in Section 9.01 shall have been
satisfied or waived;
(am) "Equivalent Amount" means, in one currency (the "First Currency")
the amount of the First Currency which is required to purchase a
fixed amount in another currency (the "Other Currency") on any
Business Day at the Bank of Canada's noon mid-point spot rate for
the Other Currency against the First Currency on such Business
Day (as quoted or published from time to time by the Bank of
Canada) or, if the date of determination is not a Business Day,
on the Business Day immediately preceding such date of
determination, or at such other rate as may have been agreed to
by the Borrower and the Agent;
(an) "Event of Default" means any of the events or circumstances set
out in Section 12.01;
(ao) "Existing Credit Agreement" means the Amended and Restated Credit
Agreement dated as of January 27, 1993 between the Borrower, CFC,
the Agent and the financial institutions listed on the signature
pages thereto;
(ap) "Facility Fee Rate" means, for any day, the rate per annum set
forth below opposite the Status in effect on such day:
<TABLE>
<CAPTION>
Status Facility Fee Rate
<S> <C>
Level I Status 0.1875%
Level II Status 0.2000%
Level III Status 0.2250%
Level IV Status 0.2500%
Level V Status 0.3750%
</TABLE>
(aq) "Final Date" has the meaning given to that term in Section 6.06;
(ar) "Final Utilization Period" has the meaning given to that term in
Section 6.04;
(as) "Finance Business" means (i) the small loan, personal finance,
consumer finance or instalment credit business (including the
business of making collateral loans secured by credit obligations
or personal property), (ii) the sales finance business and the
business of purchasing notes and accounts receivable (whether or
not repayable in instalments) and interests therein, (iii) the
commercial financing and factoring business as generally
conducted, including the leasing of tangible personal property,
and (iv) any business (including securitizations and other
receivables based transactions) related to or conducted in
connection with any business of the character referred to in the
foregoing clauses (i), (ii) and (iii) other than insurance
underwriting;
(at) "Finance Subsidiary" means any Subsidiary which is engaged
primarily in the Finance Business;
(au) "Fitch" means Fitch Investors Service, Inc. and its successors;
(av) "GAAP" means generally accepted accounting principles in Canada
in effect from time to time except that for the purpose of
determining compliance with the covenants set forth in Section
10.02, "GAAP" means generally accepted accounting principles in
Canada in effect on December 31, 1993 applied consistently with
those used in compiling the Borrower's 1993 financial statements;
(aw) "Governmental Authority" means any nation or government, any
province, state or other political subdivision thereof and any
entity exercising executive, legislative, regulatory or
administrative functions of or pertaining to government;
(ax) "Guarantee" means the Guarantee dated as of May 23, 1994 given by
CFC in connection with this Agreement, substantially in the form
and substance set out in Schedule "G";
(ay) "Increased Costs" has the meaning given to that term in Section
6.10;
(az) "Indebtedness" means, at any date, (i) indebtedness for borrowed
money or for the deferred purchase price of property or services
which would appear on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP
and (ii) obligations of the Borrower or any Subsidiary of the
Borrower under leases which would appear as Capital Leases on a
consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP;
(ba) "Interest Date" means, with respect to Prime Loans, the first
Business Day of each calendar month and the date of any repayment
or Conversion Date of such Prime Loans;
(bb) "Interest Determination Date" means, with respect to a Libor
Loan, the date which is two (2) Banking Days prior to the first
day of the Libor Interest Period applicable to the Libor Loan;
(bc) "Interest Payment Date" has the meaning given to that term in
Section 6.04;
(bd) "Lenders" means all of the Chartered Banks named on the signature
pages of this Agreement and their successors and assigns, or
which become Lenders pursuant to Section 15.01 or 17.05 hereof,
and "Lender" means any one of them including each of BNS, CIBC
and Royal in its capacity as a lender but excluding each of BNS
and CIBC in its capacity as Co-Agent and excluding Royal in its
capacity as Agent;
(be) "Lender's Proportion" means, with respect to each Lender, the
fraction, the numerator of which is such Lender's Commitment and
the denominator of which is the Total Commitment;
(bf) "Level" means any of Level I, Level II, Level III, Level IV or
Level V;
(bg) "Level I" means any of the following long-term senior unsecured
debt ratings: A- or better by S&P, A3 or better by Moody's, A- or
better by D&P or A- or better by Fitch;
(bh) "Level II" means any of the following long-term senior unsecured
debt ratings: BBB+ by S&P, Baa1 by Moody's, BBB+ by D&P or BBB+
by Fitch;
(bi) "Level III" means any of the following long-term senior unsecured
debt ratings: BBB by S&P, Baa2 by Moody's, BBB by D&P or BBB by
Fitch;
(bj) "Level IV" means any of the following long-term senior unsecured
debt ratings: BBB- by S&P, Baa3 by Moody's, BBB- by D&P or BBB-
by Fitch;
(bk) "Level V" means any of the following long-term senior unsecured
debt ratings: BB+ or lower (or unrated) by S&P, Bal or lower (or
unrated) by Moody's, BB+ or lower (or unrated) by D&P or BB+ or
lower (or unrated) by Fitch;
(bl) "Libor" means, in the case of any Libor Loan, with respect to
each day during each Libor Interest Period pertaining to such
Libor Loan, the rate of interest (based on a three hundred and
sixty (360) day year):
(i) in respect of a Libor Interest Period of approximately
seven (7) days, calculated as the arithmetic mean (rounded
to the nearest one hundredth of one percent (.01%)) of the
rates at which each of Royal, BNS and CIBC, in accordance
with their respective normal practices, at or about 12:00
noon (Toronto time) on the Interest Determination Date
would be prepared to offer to leading banks in the London
interbank market for delivery on the first day of such
Libor Interest Period and for a period equal to the number
of days in such Libor Interest Period, deposits in US
Dollars, or
(ii) in respect of any other Libor Interest Period, determined
on the basis of the rate for deposits in US Dollars for a
period equal to such Libor Interest Period commencing on
the first day of such Libor Interest Period on Page 3750 of
the Telerate Service screen as of 11:00 a.m. (London time)
on the Interest Determination Date.
In the event that such rate is not quoted by all the Lenders
referred to in clause (i) above or if such rate does not appear
on Page 3750 of the Telerate Service (or otherwise on such
service), as applicable, "Libor" for the purposes of this
paragraph shall be determined by reference to such other publicly
available service for displaying Libor rates as may be agreed
upon by the Agent and the Borrower or, in the absence of such
agreement, "Libor" for the purposes of this paragraph shall
instead be the rate per annum (based on a three hundred and sixty
(360) day year) at which the Agent, in accordance with its normal
practice, at or about 12:00 noon (Toronto time) in the case of a
Libor Interest Period of approximately seven (7) days or 11:00
a.m. (London time) in the case of any other Libor Interest Period
on the Interest Determination Date, would be prepared to offer to
leading banks in the London interbank market for delivery on the
first day of such Libor Interest Period and for a period equal to
the number of days in such Libor Interest Period, deposits in US
Dollars;
(bm) "Libor Interest Date" means, with respect to a Libor Loan, (i)
the date falling on the last day of each Libor Interest Period
applicable to such Libor Loan, and (ii) in the case of each Libor
Interest Period longer than three (3) months, the dates falling
every three (3) months after the first day of such Libor Interest
Period and on the last day of such Libor Interest Period;
(bn) "Libor Interest Period" means, with respect to a Libor Loan, a
period of approximately seven (7) days, one (1) month, two (2)
months, three (3) months, six (6) months, nine (9) months, twelve
(12) months or, subject to the consent of all the Lenders, a
longer period, as selected by the Borrower and notified to the
Agent at the Agent's Branch of Account pursuant to Section
4.02(a)(ii) or 4.02(b) commencing on and including the Drawdown
Date or Conversion Date, as the case may be, and ending on a
Banking Day in accordance with the customary practice in the
London interbank market;
(bo) "Libor Loan" means a loan made under this Agreement which is
denominated in US Dollars and in respect of which the Borrower
has agreed to pay interest in accordance with Section 6.03;
(bp) "Libor Margin" means, with respect to any Libor Loan at any date,
the applicable percentage per annum set forth below based upon
the Status and Utilization on such date (provided that if the
Commitments have been terminated prior to such date, the
Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
Status Status Status Status Status
<S> <C> <C> <C> <C> <C>
If Utilization
is less than
or equal to
33-1/3%: 0.3125% 0.4000% 0.4000% 0.5000% 0.7500%
If Utilization
is greater
than 33-1/3%: 0.4375% 0.5250% 0.5250% 0.6250% 0.8750%
</TABLE>
(bq) "Libor Repayment Date" has the meaning given to that term in
Section 4.02(c);
(br) "Lien" means, with respect to any property, whether real or
personal, any mortgage, charge, pledge, hypothecation, assignment
by way of security, deposit arrangement, encumbrance, lien
(statutory or other), security interest, priority or other
security arrangement of any kind or nature whatsoever, including
any conditional sale, other title retention agreement or any
financing lease having substantially the same economic effect as
any of the foregoing;
(bs) "Loan" means a Prime Loan, Libor Loan or Short-Term Fixed Rate
Loan;
(bt) "Majority Lenders" means, at any time, any group of Lenders whose
Commitments amount in the aggregate to at least 51% of the Total
Commitment;
(bu) "Maturity Date" means, with respect to each Lender, May 22, 1998;
(bv) "Moody's" means Moody's Investors Service, Inc. and its
successors;
(bw) "New Lender" means a Chartered Bank which becomes a Lender under
this Agreement pursuant to Section 17.05;
(bx) "Obligations" means all the liability and indebtedness of the
Borrower at any time and from time to time existing or arising
under or in connection with this Agreement;
(by) "Permitted Encumbrances" means with respect to the Borrower and
its Finance Subsidiaries:
(i) any deposit of assets of the Borrower or any of its Finance
Subsidiaries with any surety company or any court, or in
escrow, as collateral in connection with, or in lieu of,
any bond on appeal by the Borrower or any of its Finance
Subsidiaries, from any judgment or decree, or in connection
with other proceedings or actions at law or in equity by or
against the Borrower or any of its Finance Subsidiaries;
(ii) Liens created by any Finance Subsidiary in favour of the
Borrower or a wholly-owned Subsidiary securing indebtedness
of such Finance Subsidiary to the Borrower or a
wholly-owned Subsidiary (which Liens cannot be transferred
except to the Borrower or to another wholly-owned
Subsidiary);
(iii) any deposits to secure public or statutory obligations of
the Borrower or any of its Finance Subsidiaries;
(iv) any purchase money Liens in respect of fixed assets or
other physical or real properties hereafter acquired by the
Borrower or any of its Finance Subsidiaries or any Liens
existing in respect of such property at the time of
acquisition thereof; provided however, that no such Lien
shall extend to or cover any other property of the Borrower
or such Finance Subsidiary, as the case may be;
(v) any Liens which are (A) in respect of fixed assets or other
physical properties of a corporation which is not a Finance
Subsidiary as of the date hereof, and (B) in existence at
the time such corporation becomes a Finance Subsidiary;
(vi) the extension, renewal or replacement of any Lien permitted
by paragraphs (i) through (v) above in respect of the same
property theretofore subject thereto or the extension,
renewal or replacement (without increase of principal
amount) of the indebtedness secured thereby;
(vii) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books
of the Borrower or such Finance Subsidiary, as the case may
be, in accordance with GAAP;
(viii) carriers', warehousemen's, mechanics', landlords'
materialmen's, repairers', storers' or other like Liens
arising in the ordinary course of business (A) which are
not overdue for a period of more than sixty (60) days or
(B) which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Borrower or such
Finance Subsidiary, as the case may be, in accordance with
GAAP;
(ix) easements, rights-of-way, zoning and other similar
encumbrances, restrictions or title defects, hich, in the
aggregate, are not substantial in amount, and which do not
in any case materially detract from the value of the
property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or its Finance
Subsidiaries;
(x) Liens arising out of judgments or awards against the
Borrower with respect to which the Borrower at the time
shall be prosecuting an appeal or proceedings for review
and with respect to which it shall have secured a stay of
execution pending such appeal or proceeding for review;
(xi) Liens granted on assets in connection with leveraged leases
and project financings entered into in the ordinary course
of the Finance Business; and
(xii) Liens to secure Indebtedness and other obligations of the
Borrower or any of its Finance Subsidiaries not otherwise
permitted by paragraphs (i) through (xi) above but only to
the extent that the aggregate Indebtedness and other
obligations secured thereby does not at any time exceed
$20,000,000;
(bz) "Person" means an individual, a partnership, a corporation, a
joint stock company, a trust, an unincorporated association, a
joint venture or other entity or a government or any agency or
political subdivision thereof;
(ca) "Prime Loan" means a loan made under this Agreement which is
denominated in Canadian Dollars and in respect of which the
Borrower has agreed to pay interest in accordance with Section
6.01;
(cb) "Prime Rate" means, with respect to a Prime Loan, on any day the
greater of (i) the annual rate of interest announced from time to
time by Royal as its reference rate then in effect for
determining interest rates on Canadian Dollar denominated
commercial loans in Canada and (ii) the annual rate of interest
equal to the sum of (A) the CDOR Rate and (B) 1% per annum;
(cc) "Prime Rate Margin" means, with respect to any Prime Loan at any
date, the applicable percentage per annum set forth below based
upon the Status and Utilization on such date (provided that if
the Commitments have been terminated prior to such date, the
Utilization for such date shall be deemed to be greater than
33-1/3%):
<TABLE>
<CAPTION>
Level I, II,
III or IV Level V
Status Status
<S> <C> <C>
If Utilization is
less than or equal
to 33-1/3%: 0.0000% 0.1250%
If Utilization is
greater than 33-1/3%: 0.0000% 0.2500%
</TABLE>
(cd) "Quarterly Utilization Period" has the meaning given to that term
in Section 6.04;
(ce) "Rating Agencies" means, collectively, D&P, Fitch, Moody's and
S&P;
(cf) "Receivables" means, at any date, any and all amounts owing to
the Borrower and its Subsidiaries on account of receivables
arising out of their conduct of their business;
(cg) "Royal" means Royal Bank of Canada and its successors;
(ch) "S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, and its successors;
(ci) "Schedules" means the Schedules to this Agreement, as the same
may be supplemented, amended, modified or restated from time to
time;
(cj) "Short-Term Fixed Rate Loan" means a loan made under this
Agreement which is denominated in Canadian Dollars for any period
of time of not less than one (1) day and not more than ninety
(90) days under the Tranche A Facility and in respect of which
the Borrower has agreed to pay interest at a fixed rate of
interest determined by the Lender making such loan which loan is
prepayable in the circumstances provided for in Section 4.04 and
in respect of which the Borrower is obliged to indemnify such
Lender for the costs and expenses referred to therein;
(ck) "Short-Term Fixed Rate Margin" means, with respect to a
Short-Term Fixed Rate Loan, at any date, the applicable
percentage per annum set forth below based on the Utilization on
such date (provided that if the Commitments have been terminated
prior to such date, the Utilization for such date shall be deemed
to be greater than 33-1/3%):
<TABLE>
<CAPTION>
Utilization Short-Term Fixed Rate Margin
<S> <C>
If Utilization is less
than or equal to 33-1/3% 0.0000%
If Utilization is greater
than 33-1/3% 0.1250%
</TABLE>
(cl) "Significant Subsidiary" means, at any particular time, (i) any
Finance Subsidiary and (ii) any other Subsidiary of CFC, the
assets of which constitute at least 5% of the consolidated assets
of CFC and its Subsidiaries as stated in the consolidated
financial statements of CFC and its Subsidiaries for the most
recently completed fiscal quarter of CFC, provided that the term
"Significant Subsidiary" shall not include any Special Purpose
Subsidiary;
(cm) "Special Purpose Subsidiary" means any Subsidiary created for the
sole purpose of purchasing assets from the Borrower or any
Finance Subsidiary with the intention and for the purpose of
using such assets in a securitization transaction;
(cn) "Status" means, as to CFC, the existence of Level I Status, Level
II Status, Level III Status, Level IV Status or Level V Status,
as the case may be. For the purpose of this definition, "Status"
will be set at the lowest Level assigned to CFC by any Rating
Agency, unless only one Rating Agency has assigned such Level to
CFC, in which case CFC's Status will be set at the second lowest
Level assigned to CFC by any Rating Agency;
(co) "Subsidiary" means, in relation to a Person, any corporation of
which such Person or one or more Subsidiaries of such Person or
such Person and one or more Subsidiaries shall at the time own
shares of any class or classes (however designated) having voting
power for the election of at least a majority of the members of
the board of directors (or other governing body) of such
corporation;
(cp) "Tax" includes all present and future taxes, levies, imposts,
stamp taxes, duties, charges to tax, fees, deductions,
withholdings and any restrictions or conditions resulting in a
charge to tax and all penalties, interest and other payments on
or in respect thereof;
(cq) "Terminated Lender" has the meaning given to that term in Section
6.11(a);
(cr) "Total Commitment" means the sum of the Commitments from time to
time, irrespective of any outstanding Borrowings;
(cs) "Tranche A Facility" means the revolving credit facility which
the Lenders are making available to the Borrower pursuant to
Article III of this Agreement;
(ct) "Tranche B Facility" means the revolving credit facility which
the Lenders are making available to the Borrower pursuant to
Article IV of this Agreement;
(cu) "United States Dollars", "US Dollars", and the symbol "US$" each
means the lawful money of the United States of America in same
day immediately available funds;
(cv) "US Base Rate" means the annual rate of interest announced from
time to time by Royal as its reference rate then in effect for
determining interest rates on US Dollar denominated commercial
loans in Canada;
(cw) "Utilization" means, for any Utilization Period, the percentage
equivalent of a fraction (a) the numerator of which is the
average daily Canadian Dollar Amount of Borrowings (including the
face amount of all Bankers' Acceptances outstanding) during such
Utilization Period, and (b) the denominator of which is the
average daily amount of the Total Commitment during such
Utilization Period; and
(cx) "Utilization Period" means any Quarterly Utilization Period and
the Final Utilization Period.
Section 1.02 - Headings and Table of Contents
The division of this Agreement into Articles and Sections and the
insertion of headings and the Table of Contents are for convenience of
reference only and shall not affect the construction or interpretation of
this Agreement.
Section 1.03 - References
Unless something in the subject matter or context is inconsistent
therewith, all references to Sections, Articles and Schedules are to
Sections and Articles of, and Schedules to, this Agreement. The words
"hereto", "herein", "hereof", "hereunder" and similar expressions refer to
this Agreement and not to any particular Article, Section, paragraph or
other portion hereof.
Section 1.04 - Rules of Interpretation
In this Agreement, unless otherwise specifically provided, the
singular includes the plural and vice versa; "including" shall mean
"including, without limitation,"; and "in writing" or "written" includes
printing, typewriting, or any electronic means of communication capable of
being visually reproduced at the point of reception, including telex,
telecopier or telegraph.
Section 1.05 - Accounting Terms
Unless otherwise defined herein, each accounting term used in
this Agreement has the meaning assigned to it under GAAP and reference to
any balance sheet item or income statement item means such item as computed
from the applicable consolidated statement prepared in accordance with
GAAP. Each financial statement referred to in this Agreement shall be
prepared on a consolidated basis.
Section 1.06 - Time
Except where otherwise indicated in this Agreement, any reference
to a time shall mean local time in the City of Toronto, Province of
Ontario.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 - Representations and Warranties of the Borrower
The Borrower represents and warrants to each Lender and the Agent
(all of which representations and warranties the Borrower hereby
acknowledges are being relied upon by the Lenders and the Agent in entering
into this Agreement and in making each Borrowing available under this
Agreement) that:
(a) Status: The Borrower and each of its Subsidiaries (i) is a
corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation,
amalgamation or continuance, as the case may be, and (ii) is duly
qualified as a foreign corporation to do business and is in good
standing in each of the jurisdictions in which the character of
the properties owned or held under lease by it or the nature of
business transacted by it makes such qualification necessary,
except in the case of this clause (ii) to the extent that the
failure to be so qualified or in good standing would not have a
material adverse effect on the business, operations or financial
condition of the Borrower and its Subsidiaries taken as a whole;
(b) Power: The Borrower and each of its Subsidiaries has the
corporate power and authority to own its respective properties
and to carry on its business as now conducted; the Borrower has
full power and authority to enter into and perform its
obligations under this Agreement and this Agreement has been duly
authorized by all necessary corporate action on the part of the
Borrower and does not violate, to the best of the knowledge of
the Borrower, any Applicable Law;
(c) No Conflict: Neither the execution and delivery of this
Agreement nor compliance with the terms and provisions hereof (i)
as of the Effective Date conflicts with, violates, or results in
a breach of any of the terms, conditions or provisions of any
Applicable Law applicable to the Borrower or any of its
Subsidiaries or, (ii) conflicts with, violates, results in a
breach of, or constitutes a default under, any charter or bylaw
provision of the Borrower or any of its Subsidiaries or of any
loan agreement, indenture, trust deed or any other agreement or
instrument to which the Borrower or any of its Subsidiaries is a
party or by which it or any of them is bound;
(d) Binding Effect: This Agreement has been duly executed and
delivered on behalf of the Borrower, and this Agreement
constitutes a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by principles
of equity, whether considered in a proceeding in equity or at
law;
(e) Litigation: No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to
the knowledge of the Borrower, threatened by or against the
Borrower or any of its Subsidiaries or against any of its or
their respective properties or revenues, in which there is a
reasonable likelihood of an adverse determination (i) with
respect to this Agreement or any of the transactions contemplated
hereby, if such adverse determination would have a material
adverse effect on the ability of the Borrower to fulfil its
obligations under this Agreement or on the rights and remedies of
the Agent and the Lenders hereunder or (ii) which would, if
adversely determined, have a material adverse effect on the
business, operations, property or financial condition of the
Borrower and its Subsidiaries taken as a whole;
(f) Compliance with Other Instruments: Neither the Borrower nor any
of its Subsidiaries is in breach of any term of its incorporating
instruments or of its by-laws and, to the best of the knowledge
of the Borrower, neither the Borrower nor any of its Subsidiaries
is in breach of any agreement, mortgage, franchise, employee
benefit plan or licence which breach could materially and
adversely affect the financial condition of the Borrower and its
Subsidiaries taken as a whole;
(g) No Default: No Event of Default has occurred and is continuing
and no other event has occurred and is continuing which, with the
giving or receipt of notice or the lapse of time, or both, would
constitute an Event of Default;
(h) Financial Statements: The audited consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 1993, and
the related audited consolidated statements of net earnings and
cash flows for the fiscal year ended on such date, copies of
which have been delivered to each Lender, present fairly the
consolidated financial position of the Borrower and its
Subsidiaries as at such date, and the consolidated results of
their operations and cash flows for the fiscal year then ended.
The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at March 31, 1994, and the related consolidated
statements of net earnings and cash flows for the three-month
period ended on such date, copies of which have been delivered to
each Lender, present fairly the consolidated financial condition
of the Borrower and its Subsidiaries as at such date, and the
consolidated results of their operations for the three-month
period then ended (subject to normal year-end audit adjustments).
Such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP. As at
March 31, 1994, neither the Borrower nor any of its Subsidiaries
had any asset, liability, contingent obligations, liability for
taxes, long-term lease or unusual forward or long-term commitment
material to the financial condition of the Borrower and its
Subsidiaries taken as a whole, which was not reflected in the
foregoing unaudited statements or in the notes thereto;
(i) Reports, etc.: The information, exhibits and reports furnished
by the Borrower to the Agent for the benefit of the Agent and the
Lenders contain no material misstatement of fact nor do they omit
to state a material fact which may be necessary to make any
statement therein contained not misleading;
(j) No Material Adverse Change: Between December 31, 1993 and the
Effective Date, there has been no material adverse change in the
business, operations, property or financial condition of the
Borrower and its Subsidiaries taken as a whole;
(k) Title: The Borrower and each of its Subsidiaries has good and
marketable title to all its assets and properties and, except for
Permitted Encumbrances, such assets and properties are free and
clear of any Lien;
(l) Tax Returns: The Borrower and each of its Subsidiaries has (i)
filed all material income tax returns which were required to be
filed, (ii) except as contemplated in (iii) below, paid or made
provision for payment of all material Taxes (including interest
and penalties) which are due and payable, and (iii) provided
adequate reserves established in accordance with GAAP for the
payment of any Tax the payment of which is being contested; and
(m) Compliance with Laws: The Borrower and each of its Subsidiaries
is in compliance, in all material respects, with all Applicable
Laws applicable to the Borrower and its Subsidiaries, except to
the extent failure to comply with such laws does not have any
reasonable likelihood of having a material adverse effect on the
business, operations, property or financial or other condition of
the Borrower and its Subsidiaries taken as a whole.
Section 2.02 - Deemed Repetition
The representations and warranties contained in this Article II
shall continue in effect until payment and performance of all debts,
liabilities and obligations under this Agreement and shall be deemed to be
repeated on each Drawdown Date as if made on each such date except for the
representations and warranties in Section 2.01(c)(i), (h) and (j) which
relate solely to an earlier date; provided that for the purposes of this
Section 2.02, "Drawdown Date" shall not include a Conversion Date or a date
on which a Libor Loan is reborrowed by way of another Libor Loan or a date
on which a Bankers' Acceptance is repaid by way of Bankers' Acceptances.
ARTICLE III
THE TRANCHE A FACILITY
Section 3.01 - Obligation of each of the Lenders
Subject to the terms and conditions herein contained, if
requested by the Borrower, and subject to availability, each Lender, at its
option, may make its Commitment available to the Borrower from time to time
by way of Prime Loans and Short-Term Fixed Rate Loans under the Tranche A
Facility at its Branch of Account after 12:00 noon on such Business Days
and in such amounts as the Borrower may from time to time request, up to an
amount equal to the undrawn portion of its Commitment. Prior to the
Maturity Date, the Borrower may borrow, repay and reborrow from such Lender
by way of Prime Loans or Short-Term Fixed Rate Loans under the Tranche A
Facility subject to the terms and conditions of this Agreement.
Section 3.02 - Manner of Borrowing under the Tranche A Facility
Subject to the provisions of this Agreement, the Borrower may, on
any Business Day from time to time during the term of this Agreement,
request a Borrowing from any Lender or Lenders by way of:
(i) if such Lender has agreed to make its Commitment available
from time to time by way of Prime Loans, then Prime Loans,
and
(ii) if such Lender has agreed to make its Commitment available
from time to time by way of Short-Term Fixed Rate Loans,
then Short-Term Fixed Rate Loans,
in either case, upon giving irrevocable telephone or written notice (or
such other method of notification as may be agreed between such Lender and
the Borrower) to such Lender at or before 12:00 noon on the date of
request, followed, in the case of telephone notice, by written confirmation
electronically transmitted to such Lender on the same day in the form and
substance set out in Schedule "A". A copy of each such written
confirmation shall be delivered to the Agent by such Lender.
Section 3.03 - Repayment of Tranche A Facility Borrowings
(a) At or before 2:00 p.m. five (5) Business Days following the
Drawdown Date of a Prime Loan under the Tranche A Facility, the
Borrower will repay to the affected Lender at its Branch of
Account such Prime Loan with the proceeds of a Borrowing under
the Tranche B Facility or otherwise.
(b) At or before 2:00 p.m. on the maturity date of a Short-Term Fixed
Rate Loan, the Borrower will repay to the affected Lender at its
Branch of Account such Short-Term Fixed Rate Loan with the
proceeds of a Borrowing under the Tranche B Facility or
otherwise.
(c) If the Borrower intends to repay any Prime Loan or Short-Term
Fixed Rate Loan under the Tranche A Facility with the proceeds of
a Borrowing under the Tranche B Facility, other than by way of
Bankers' Acceptances, pursuant to Section 4.02 it shall give
irrevocable telephone or written notice (or such other method of
notification as may be agreed between the Agent and the Borrower)
to the Agent at or before 12:00 noon three (3) Business Days
prior to such Loan's maturity, followed, in the case of telephone
notice, by written confirmation electronically transmitted to the
Agent on the same day in the form and substance set out in
Schedule "B", of its request that such Prime Loan or Short-Term
Fixed Rate Loan be converted into a Borrowing under the Tranche B
Facility three (3) Business Days following the date of such
request. If the Borrower intends to repay any Prime Loan or
Short-Term Fixed Rate Loan under the Tranche A Facility with the
proceeds of a Borrowing under the Tranche B Facility by way of
Bankers' Acceptances, pursuant to Section 4.02 it shall give
irrevocable written notice of its request to the Agent at or
before 10:00 a.m. one (1) Business Day prior to such Loan's
maturity.
(d) If the Borrower intends to repay a Prime Loan under the Tranche A
Facility other than with the proceeds of a Borrowing under the
Tranche B Facility, it shall give irrevocable notice of such
repayment to the Agent and the Lender in respect of such Prime
Loan at the time of request for such Prime Loan.
(e) If the Borrower shall fail to repay any Prime Loan or Short-Term
Fixed Rate Loan made under the Tranche A Facility as required by
this Section 3.03, then the affected Lender shall advise the
Agent, and upon written notice being given by the Agent to the
Borrower and to each of the other Lenders (which written notice
shall refer to such Prime Loan or Short-Term Fixed Rate Loan made
under the Tranche A Facility and shall be expressed to be given
pursuant to this Section 3.03(e)), the Borrower will be deemed to
have requested a Borrowing under the Tranche B Facility by way of
a Prime Loan from each of the Lenders in an aggregate principal
amount equal to the outstanding principal amount of such Prime
Loan or Short-Term Fixed Rate Loan made under the Tranche A
Facility. In such event, subject to satisfaction of the
conditions precedent to a Borrowing under the Tranche B Facility,
at or before 2:00 p.m. on the third Business Day following such
notice each Lender will make payment to the Agent for the account
of such Lender, in repayment of such Prime Loan or Short-Term
Fixed Rate Loan made under the Tranche A Facility, an amount
equal to its Lender's Proportion of the outstanding principal
amount of such Prime Loan or Short-Term Fixed Rate Loan made
under the Tranche A Facility. Each such payment to the Agent by
a Lender pursuant to this Section 3.03(e) will be deemed to be
and will be treated in all respects as a Borrowing by way of
Prime Loan made to the Borrower by such Lender under the Tranche
B Facility.
Section 3.04 - No Pro Rata Allocation
Borrowings pursuant to the Tranche A Facility may be outstanding
in favour of the Lenders from time to time in amounts other than their
respective Lender's Proportions. Each Lender's Commitment is several, and
a Lender shall not be responsible for the commitment of any other Lender to
make available Borrowings under the Tranche A Facility. The failure of a
Lender to make available a Borrowing in accordance with its obligations
under this Agreement shall not release any other Lender from its
obligations hereunder.
ARTICLE IV
THE TRANCHE B FACILITY
Section 4.01 - Obligation of each of the Lenders
Subject to the terms and conditions herein contained, the Lenders
severally agree to make available to the Borrower from time to time under
the Tranche B Facility Borrowings by way of Prime Loans and Libor Loans
through the Agent's Account for Payments and by way of Bankers' Acceptances
by the acceptance thereof by each of the Lenders at their respective
Branches of Account up to an amount equal to the undrawn amounts of their
respective Commitments.
Each of the Lenders will make Borrowings available under the
Tranche B Facility at such times, on such bases and in such amounts as the
Borrower shall request in accordance with this Agreement. Prior to the
Maturity Date, the Borrower may borrow, repay and reborrow from each Lender
to the full extent of such Lender's Commitment subject to the terms and
conditions of this Agreement.
Section 4.02 - Manner of Borrowing under the Tranche B Facility by way of
Prime Loans and Libor Loans
(a) Subject to the provisions of this Agreement, the Borrower may,
from time to time during the term of this Agreement, request
Borrowings under the Tranche B Facility by way of:
(i) Prime Loans in minimum aggregate amounts of the lesser of
$5,000,000 or the undrawn amount of the Total Commitment,
upon giving irrevocable telephone or written notice (or
such other method of notification as may be agreed between
the Agent and the Borrower) to the Agent at or before 12:00
noon three (3) Business Days prior to the Drawdown Date,
followed, in the case of telephone notice, by written
confirmation electronically transmitted to the Agent on the
same day in the form and substance set out in Schedule "B",
and
(ii) Libor Loans in minimum aggregate amounts of the lesser of
US$10,000,000 or the undrawn amount of the Total
Commitment, upon giving irrevocable telephone or written
notice (or such other method of notification as may be
agreed between the Agent and the Borrower) to the Agent at
or before 12:00 noon one (1) Banking Day prior to the
Interest Determination Date with respect to such Libor
Loans, followed, in the case of telephone notice, by
written confirmation electronically transmitted to the
Agent on the same day in the form and substance set out in
Schedule "B". Each such notice shall include a selection
of the duration of the Libor Interest Period.
(b) With respect to each Borrowing by way of Libor Loans, subject to
the right of the Borrower to repay the same as provided in
Section 4.02(c), the Borrower shall give irrevocable telephone or
written notice (or such other method of notification as may be
agreed between the Agent and the Borrower) to the Agent at or
before 12:00 noon on the third Banking Day prior to the last day
of the Libor Interest Period for such Libor Loans, followed, in
the case of telephone notice, by written confirmation
electronically transmitted to the Agent on the same day, if it
wishes to reborrow such Libor Loans as a Borrowing by way of new
Libor Loans. Any such notice shall include a selection of the
duration of the Libor Interest Period for the new Libor Loans
which shall commence on and include the last day of the Libor
Interest Period for the current Libor Loans. The affected
current Libor Loans shall for all purposes of this Agreement be
treated as if they were repaid and a Borrowing by way of new
Libor Loans in like amount was made on the last day of such
current Libor Interest Period. If the Borrower fails to so
notify the Agent and so select a Libor Interest Period or to
repay the same as provided in Section 4.02(c), the Borrower shall
be deemed to have notified the Agent that it wishes to reborrow
such Libor Loans as a Borrowing by way of Libor Loans with a
Libor Interest Period of approximately one (1) month commencing
on and including the last day of the Libor Interest Period for
the current Libor Loans.
(c) Except as otherwise provided in Section 4.02(b) and subject to
the other terms of this Agreement, each Borrowing by way of Libor
Loans must be repaid on the last day of the Libor Interest Period
therefor (a "Libor Repayment Date"). If the Borrower intends to
repay any Borrowing by way of Libor Loans, it shall give
irrevocable telephone or written notice (or such other method of
notification as may be agreed between the Agent and the Borrower)
to the Agent at or before 12:00 noon on the third Banking Day
before the Libor Repayment Date thereof followed, in the case of
telephone notice, by written confirmation electronically
transmitted to the Agent on the same day. The Borrower shall,
upon giving such notice, be obligated to repay such Borrowing on
such Libor Repayment Date.
(d) Each Libor Loan shall be hedged by the purchase by the Borrower
of a forward contract for US Dollars with a counterparty
satisfactory to the Agent or in such other manner reasonably
satisfactory to the Agent in an amount equal to 100% of such
Libor Loan and for a like term as such Libor Loan. The Borrower
shall provide the Agent upon request with particulars of the
hedging arrangements for each Libor Loan outstanding.
Section 4.03 - Pro Rata Treatment of Borrowings
Unless otherwise provided for in this Agreement, each Borrowing
under the Tranche B Facility shall be made available by the Lenders in
accordance with their respective Lenders' Proportions, in the case of Prime
Loans and Libor Loans through the Agent's Account for Payments and in the
case of Bankers' Acceptances at the respective Lenders' Branches of
Account. Each Lender's Commitment is several, and a Lender shall not be
responsible for the commitment of any other Lender to make available
Borrowings under the Tranche B Facility. The failure of a Lender to make
available a Borrowing in accordance with its obligations hereunder shall
not release any other Lender from its obligations hereunder.
Section 4.04 - Repayment of Tranche A Facility Borrowings Using Tranche B
Facility
If on any Drawdown Date or Conversion Date with respect to the
Tranche B Facility, the sum of (i) a Lender's Proportion of the Borrowings
to be advanced on such Drawdown Date or Conversion Date pursuant to the
Tranche B Facility, (ii) the Borrowings from such Lender under the Tranche
A Facility, and (iii) the Borrowings from such Lender under the Tranche B
Facility, would exceed such Lender's Commitment, then the proceeds of the
Borrowing to be advanced by such Lender on such Drawdown Date or Conversion
Date pursuant to the Tranche B Facility shall be applied by such Lender to
repay the Borrowings from such Lender under the Tranche A Facility to the
extent required to permit such Lender to advance its Lender's Proportion of
the Borrowings to be advanced by such Lender pursuant to the Tranche B
Facility on such Drawdown Date or Conversion Date. In such event, the
Borrower shall indemnify such Lender for any loss or expense suffered or
incurred by such Lender as a result of repayment of any Short-Term Fixed
Rate Loan made by such Lender.
Section 4.05 - Repayment under the Tranche B Facility
So long as this Agreement is in effect, the Borrower may repay,
on a pro rata basis, the Borrowings under the Tranche B Facility in minimum
aggregate amounts of $5,000,000 in the case of Prime Loans, US$10,000,000
in the case of Libor Loans and $10,000,000 in the case of Bankers'
Acceptances from time to time upon giving irrevocable telephone or written
notice (or such other method of notification as may be agreed between the
Agent and the Borrower) to the Agent at or before 12:00 noon three (3)
Business Days prior to the date of repayment followed, in the case of
telephone notice, by written confirmation electronically transmitted to the
Agent on the same day in the form and substance set out in Schedule "D".
Repayments of Libor Loans shall be made in accordance with the provisions
of Section 4.02 and repayments of Bankers' Acceptances shall be made in
accordance with the provisions of Section 7.03.
Section 4.06 - Conversion Option
(a) Subject to the provisions of this Agreement, the Borrower may,
during the term of this Agreement, effective on any Business Day, convert,
in whole or in part, an outstanding Borrowing under the Tranche B Facility
by way of Prime Loans into a Borrowing under the Tranche B Facility by way
of Bankers' Acceptances or vice versa upon giving to the Agent on behalf of
the Lenders at the Agent's Branch of Account prior irrevocable telephone or
written notice within the notice period and in the form which would be
required to be given to the Agent in respect of the type of Borrowing into
which the outstanding Borrowing is to be converted in accordance with the
provisions of Sections 4.02(a)(i) and 7.02, as applicable, followed by
written confirmation on the same day in the form and substance set out in
Schedule "C", provided that:
(i) except where otherwise consented to by the Majority
Lenders, no Event of Default and no event or circumstance
which with notice or lapse of time or both might constitute
an Event of Default has occurred and is continuing,
(ii) each conversion to a Borrowing by way of Bankers'
Acceptances shall be for a minimum aggregate amount of
Cdn$10,000,000 (and whole multiples of Cdn$100,000 in
excess thereof) and each conversion to a Borrowing by way
of Prime Loans shall be in a minimum aggregate amount of
Cdn$5,000,000,
(iii) a Borrowing by way of Bankers' Acceptances may be converted
only on the maturity date of such Bankers' Acceptances and,
provided that, if less than all Borrowings by way of
Bankers' Acceptances are converted, then after such
conversion not less than Cdn$10,000,000 (and whole
multiples of Cdn$100,000 in excess thereof) shall remain as
Borrowings by way of Bankers' Acceptances,
(iv) a conversion into a Borrowing by way of Bankers'
Acceptances shall only be made to the extent that the
conditions outlined in Sections 6.10, 6.11 and 6.12 shall
not exist on the relevant Conversion Date, and
(v) on the Conversion Date, the amount of the outstanding
Borrowings (after any such conversion) would not exceed the
Total Commitment at that time.
(b) With respect to any determination required to be made by the
Agent in respect of the existence of conditions outlined in Sections 6.10
and 6.11, such determination shall be conclusive and binding, except in the
case of manifest error.
ARTICLE V
THE CREDIT FACILITY
Section 5.01 - Borrowings During the Term of this Agreement
Notwithstanding anything contained in this Agreement to the
contrary, no Lender shall be required to make available Borrowings under
the Credit Facility in excess of its Commitment.
The Borrower shall be entitled to borrow under this Agreement
from any Lender until the close of business on the last Business Day prior
to the Maturity Date and no Lender shall be obliged to make available
Borrowings on or after the Maturity Date. Each Borrowing made available by
a Lender shall have a term that does not extend beyond the Maturity Date.
Section 5.02 - Cancellation During the Term of This Agreement
The Borrower may, at any time during the term of this Agreement,
upon giving not less than five (5) Business Days prior written notice to
the Agent substantially in the form and substance set out in Schedule "E",
cancel and reduce without penalty any portion of the Total Commitment in an
amount which is a multiple of $1,000,000 subject to a minimum of
$5,000,000. Such notice of cancellation with respect to any drawn portion
of the Total Commitment shall be without effect unless on or before the
last day of such notice period (i) such drawn portion shall have been
repaid or otherwise retired, (ii) the accrued interest on such drawn
portion shall have been paid, and (iii) any other fees and charges in
connection with such drawn portion have been paid. Any such notice of
cancellation is irrevocable and the amount so cancelled may not be
reinstated hereunder. The Total Commitment shall be reduced accordingly
and the amount of each Lender's Commitment shall be reduced by an amount
equal to such Lender's Proportion of the amount so cancelled.
Section 5.03 - Repayment of Borrowings on Maturity Date
At or before 2:00 p.m. on the Maturity Date, the Borrower shall
repay (i) to each Lender at its Branch of Account all Borrowings made
available pursuant to the Tranche A Facility by such Lender and (ii) to the
Agent at the Agent's Account for Payments all Borrowings made available
pursuant to the Tranche B Facility.
Section 5.04 - Purpose
The proceeds of the Borrowings shall be used by the Borrower to
(i) finance the Borrower's general corporate purposes, (ii) provide a
standby line to support the Borrower's commercial paper borrowings, and
(iii) finance the Borrower's short term operating requirements.
Section 5.05 - Reliance on Oral Instructions
The Agent and each of the Lenders shall be entitled to act upon
the oral instructions of any Person who the Agent or such Lender believes
is a Person the Borrower has identified in writing from time to time to the
Agent or such Lender as being a Person authorized by the Borrower to give
instructions regarding the completion and issuance of Bankers' Acceptances
and the drawdown or conversion of other Borrowings and none of the Agent or
the Lenders shall be responsible for any error or omission in such
instructions or in the performance thereof except in the case of gross
negligence or wilful misconduct by the Agent or such Lender, as the case
may be, or its employees. Any such oral instructions so given shall be
confirmed in writing by the Borrower to the Agent as provided herein. The
Borrower may revoke the authority of such Persons so authorized by
notifying the Agent in writing, which notice shall be effective upon its
actual receipt by the Agent. Any instructions given to the Agent or any
Lender prior to the time such notice becomes effective shall remain
effective for the purposes of this Agreement.
ARTICLE VI
INTEREST, FEES, COSTS AND EXPENSES
Section 6.01 - Payment of Interest on Prime Loans
The Borrower shall pay at or before 2:00 p.m. on each Interest
Date, interest on each Prime Loan made by a Lender,
(i) under the Tranche A Facility, to such Lender at such
Lender's Branch of Account (except to the extent it is
otherwise payable to the Agent for such Lender's account
pursuant to Section 6.04), and
(ii) under the Tranche B Facility, to the Agent at the Agent's
Account for Payments for the account of such Lender,
calculated at a rate per annum equal to the sum of the Prime Rate in effect
from time to time and the Prime Rate Margin. Such interest shall be
payable in arrears on each Interest Date and shall be computed on a daily
basis and on the basis of the actual number of days elapsed in a year of
365 days or 366 days, as applicable.
Section 6.02 - Payment of Interest on Short-Term Fixed Rate Borrowings
The Borrower shall pay at or before 2:00 p.m. on the maturity
date of each Short-Term Fixed Rate Loan, interest on such Short-Term Fixed
Rate Loan made by a Lender calculated at the rate per annum equal to the
sum of the rate quoted by such Lender at the time such Short-Term Fixed
Rate Loan was made and the Short-Term Fixed Rate Margin, such payment to be
made at such Lender's Branch of Account except to the extent it is
otherwise payable to the Agent for such Lender's account pursuant to
Section 6.04. Such interest shall be computed on a daily basis and on the
basis of the actual number of days elapsed in a year of 365 days or 366
days, as applicable.
Section 6.03 - Payment of Interest on Libor Loans
The Borrower shall pay to the Agent for the account of each
Lender at or before 2:00 p.m. on each Libor Interest Date in each Libor
Interest Period applicable to a Libor Loan made by such Lender, interest
accrued on such Libor Loan during such Libor Interest Period calculated at
a rate per annum equal to the sum of the relevant Libor plus the applicable
Libor Margin. Such interest shall be payable in arrears on each Libor
Interest Date during such Libor Interest Period for the period from and
including the first day of such Libor Interest Period or the last Libor
Interest Date in such Libor Interest Period, as applicable, to but not
including such Libor Interest Date, computed on a daily basis and on the
basis of the actual number of days elapsed during such Libor Interest
Period (excluding such Libor Interest Date) in a year of 360 days.
Section 6.04 - Utilization
The amount of interest on Prime Loans, Short-Term Fixed Rate
Loans and Libor Loans to be paid on any date as specified in Section 6.01,
6.02 or 6.03 (each, an "Interest Payment Date") shall be the amount which
would be due and payable if the Utilization for the period for which such
interest is paid was less than 33-1/3%, provided that, in the case of Libor
Loans and Short-Term Fixed Rate Loans, the amount of any portion of the
interest payable in respect thereof on any Interest Payment Date which
accrued during a Utilization Period ending prior to such Interest Payment
Date shall be determined on the basis of the actual Utilization for such
Utilization Period. On the first Business Day following the last day of
each fiscal quarter of the Borrower and on the Final Date, the Borrower
shall pay to the Agent, for the ratable benefit of the Lenders, an
additional amount of interest equal to the excess (if any) of (i) the
amount of interest which would have been payable during such fiscal quarter
(a "Quarterly Utilization Period") (or, in the case of the payment due on
the Final Date, the portion thereof (the "Final Utilization Period") ending
on such date) after giving effect to the actual Utilization during such
Utilization Period over (ii) the amount of interest which actually was paid
during such Utilization Period.
On the first Business Day following the last day of each
Utilization Period, the Borrower shall pay to the Agent, for the ratable
benefit of the Lenders an additional amount on account of Acceptance Fees
in respect of each Bankers' Acceptance outstanding during such Utilization
Period equal to an amount calculated by multiplying:
(i) a fraction, the numerator of which is the number of days in
the term of the Bankers' Acceptance in such Utilization
Period and the denominator of which is the number of days
in the term of the Bankers' Acceptance; by
(ii) the excess (if any) of (A) the amount of Acceptance Fees
which would have been payable in respect of such Bankers'
Acceptance had the Utilization at the time of the issuance
of such Bankers' Acceptance been the same as the actual
Utilization during such Utilization Period, over (B) the
amount of Acceptance Fees which actually were paid in
respect of such Bankers' Acceptance.
Section 6.05 - Default Interest and Indemnity
Interest shall be payable on all overdue interest, fees and other
amounts payable hereunder, (i) if the overdue amount is denominated in
Canadian Dollars, at a rate per annum equal to the sum of the Prime Rate in
effect from time to time and two percent (2%) per annum, and (ii) if the
overdue amount is denominated in US Dollars, at a rate per annum equal to
the sum of the US Base Rate in effect from time to time and two percent
(2%) per annum. In each case, interest shall be computed from the date
such amount becomes due and payable for so long as such amount remains
unpaid, and, such interest shall be payable on demand and shall be
compounded monthly on the first Business Day of each calendar month on the
basis of the actual number of days elapsed in a year of 365 days or 366
days, as applicable.
All interest provided for in this Agreement shall be payable both
before and after maturity, default and judgment.
The Borrower agrees to indemnify each Lender and the Agent
against any actual loss or expense which such Lender or the Agent may
sustain or incur as a consequence of (a) any failure of the Borrower to
effect a Borrowing as specified in any notice of Borrowing delivered
pursuant to this Agreement or (b) the default by the Borrower in the
payment of any sum due by the Borrower under this Agreement.
Section 6.06 - Facility Fee
The Borrower shall pay to the Agent for the account of each
Lender, a facility fee for each day from and including the Effective Date
to but excluding the later of (i) the Maturity Date and (ii) the date on
which all Borrowings shall have been repaid in full (such later date, the
"Final Date"). Such facility fee shall be payable quarterly in arrears on
(a) the first Business Day of each of January, April, July and October (for
the three-month period (or portion thereof) ended on the last day of the
immediately preceding month) and (b) on the Final Date (for the period
ended on such date for which no payment has been received pursuant to
clause (a) above) and shall be computed for each day during such period at
a rate per annum equal to the Facility Fee Rate in effect on such day on
the Total Commitment in effect on such day (or if the Commitments shall
have been terminated, on the aggregate outstanding Borrowings on such day)
and on the basis of the actual number of days elapsed in a year of 365 days
or 366 days, as applicable.
Section 6.07 - Agency Fee
The Borrower agrees to pay to the Agent an agency fee for its
sole account to the Agent's Account for Payments at the times and in the
amounts agreed in writing by the Borrower and the Agent.
Section 6.08 - Computation of Interest for Interest Act Purposes
The annual rates of interest to which the rates determined in
accordance with Section 6.03 of this Article VI are equivalent for purposes
of the Interest Act (Canada) are the rates so determined multiplied by the
number of days in the applicable calendar year and divided by 360.
Section 6.09 - Limit on Rate of Interest
(a) Notwithstanding any provision contained in this Agreement, the
Borrower shall not be obliged to make any payments of interest or other
amounts payable to a Lender hereunder in excess of the amount or rate which
would be prohibited by Applicable Laws or would result in the receipt by a
Lender of interest at a criminal rate (as such terms are construed under
the Criminal Code (Canada)).
(b) In the event that any such payments are limited or prohibited as
provided in this Section 6.09, such payments of interest and other amounts
hereunder shall be made at the highest rate permitted.
Section 6.10 - Increased Costs
In the event that any Applicable Law or any change therein or in
the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority enacted or made subsequent to
the date hereof:
(i) does or shall subject such Lender to any Tax, or change
the basis of taxation or increase any existing Tax, on
payments of principal, interest or other amounts payable by
the Borrower to such Lender (except for taxes on the
overall net income of such Lender imposed by the
jurisdiction in which it is incorporated or resident or
from which it is acting for the purposes of this Agreement,
but including taxes on capital or other similar taxes);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by,
or other credit extended by, or any other acquisition of
funds by, any office of such Lender; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making, or maintaining advances or extensions of credit or to
reduce any amounts receivable hereunder (such increase in costs or
reduction in amounts receivable, "Increased Costs") then, in any such case,
the Borrower shall promptly pay to the Agent for the account of such
Lender, upon the written demand of such Lender to the Borrower (with a copy
to the Agent), so long as such Increased Costs are not otherwise included
in the amounts required to be paid to such Lender pursuant to Section 6.11,
6.12 or 6.14, any additional amounts necessary to compensate such Lender
for such Increased Costs which such Lender deems to be material as
determined by such Lender with respect to its Libor Loans, Bankers'
Acceptances or Short-Term Fixed Rate Loans. If a Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower, through the Agent, of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by a Lender, through the
Agent, to the Borrower shall be conclusive in the absence of manifest
error.
Section 6.11 - Changes in Capital Requirements
(a) In the event that, in the opinion of counsel for any Lender
(which may, in the discretion of such Lender, be such Lender's
internal counsel), compliance with any law, rule, regulation or
guideline, or any change therein or in the interpretation or
application thereof or compliance by any Lender with any request
or directive from any central bank or Governmental Authority
(whether or not such requirement has the force of law) enacted or
made subsequent to the date hereof shall affect the amount of
capital required or expected to be maintained by such Lender or
any corporation controlling such Lender and the amount of such
capital that is required or expected to be maintained is
increased by or based upon the Commitment of such Lender under
this Agreement or any participation agreement entered into
pursuant to Section 15.01, as applicable (such event, a "Change
in Capital Requirement"), such affected Lender shall so notify
the Borrower and the Agent within one hundred and eighty (180)
days after such affected Lender shall have obtained actual
knowledge of the costs associated with its compliance with such
Change in Capital Requirement (but in no event later than 365
days after such Lender is first required to comply with such
Change in Capital Requirement).
At the time of such notification such affected Lender shall
provide the Borrower with a written statement setting forth the
amount that would adequately compensate such affected Lender for
the costs associated with its compliance with such Change in
Capital Requirement and setting forth in reasonable detail the
assumptions upon which such affected Lender calculated such
amount, and a copy of the opinion of counsel referred to in the
preceding sentence. Such affected Lender shall allocate to the
Borrower the costs associated with such Change in Capital
Requirement in such a way that the proportion of (i) such costs
that are allocated to the Borrower to (ii) the total of such
costs of such affected Lender associated with such Change in
Capital Requirement as it relates to all commitments of such
Lender to its customers of a similar creditworthiness as the
Borrower, is substantially the same as the proportion of (i) the
Commitment of such affected Lender under this Agreement or such
participation agreement to (ii) the total of all commitments by
such affected Lender to its customers of similar creditworthiness
as the Borrower.
The Borrower and such affected Lender shall thereafter negotiate
in good faith an agreement to increase that portion of the
facility fees payable to such affected Lender under Section 6.06
of this Agreement, which, in the opinion of such affected Lender,
will adequately compensate such affected Lender for such costs.
If such increase is approved in writing by the Borrower within
ninety (90) days from the date of the notice to the Borrower from
such affected Lender, the facility fees payable by the Borrower
shall, effective from the date the affected Lender is first
required to comply with such Change in Capital Requirement (but
subject to the second last sentence of this Section 6.11(a))
include the amount of such agreed increase, and the Borrower will
so notify the Agent. If the Borrower and such affected Lender
are unable to agree on such an increase within ninety (90) days
from the date of the notice to the Borrower from such affected
Lender, the Borrower shall by written notice to such affected
Lender within one hundred and twenty (120) days from the date of
the aforesaid notice to the Borrower from such affected Lender,
elect either to (i) terminate the Commitment of such affected
Lender (each such Lender, a "Terminated Lender") (subject to the
second last sentence of this Section 6.11(a)) or (ii) (subject to
the second last sentence of this Section 6.11(a)) increase the
facility fees payable to such affected Lender by the amount
requested by such affected Lender and the Borrower will so notify
the Agent. Without limiting the foregoing, if the Borrower
elects to take the action described in clause (ii) of the
preceding sentence, it may simultaneously therewith reduce the
Commitment of such affected Lender by an amount chosen by the
Borrower. If the Borrower fails to provide notice to such
affected Lender as described in the second preceding sentence by
such one hundred twentieth day, the Borrower shall be deemed to
have taken the action described in clause (ii) of such second
preceding sentence without reduction of the Commitment of such
affected Lender.
The Borrower (A) may from time to time after such one hundred
twentieth day reduce the compensation to be received pursuant to
the preceding provisions of this Section 6.11(a) by any affected
Lender as a result of any Change in Capital Requirement, to the
average compensation (the "Average Compensation") the Borrower
has agreed, as provided above, to pay the affected Lenders as a
result of such Change in Capital Requirement (such average
compensation to be measured by a percentage of the aggregate
Commitments of such affected Lenders) and (B) shall pay to each
Terminated Lender on the day the Commitment of such Terminated
Lender is terminated, an amount equal to the excess, if any, of
(i) the lesser of (I) the aggregate facility fee that would have
been payable to such Terminated Lender from the date of such
Terminated Lender's notice to the Borrower pursuant to this
Section 6.11(a) to the date the Commitment of such Terminated
Lender is terminated had such facility fee been determined by
reference to the Average Compensation, and (II) the aggregate
facility fee that would have been payable to such Terminated
Lender during such period had such facility fee been increased by
an amount necessary to adequately compensate such Terminated
Lender (as determined by such Terminated Lender in accordance
with the applicable provisions of this Section 6.11(a)) for the
costs attributable to the relevant Change in Capital Requirement,
over (ii) the aggregate facility fee actually paid to such
Terminated Lender during such period.
On the day the Commitment of a Terminated Lender is terminated
pursuant to this Section 6.11(a), the Borrower shall (i) repay
all Loans and other amounts (including accrued interest and
facility fees) owing to such Terminated Lender, (ii) be liable to
such Terminated Lender under Section 6.14 if any Libor Loans or
Short-Term Fixed Rate Loans owing to such Terminated Lender shall
be repaid other than on the last day of the Libor Interest Period
relating to such Libor Loan or the maturity date relating to such
Short-Term Fixed Rate Loan, and (iii) pay to such Terminated
Lender an amount equal to the maximum aggregate amount of the
Borrower's obligations pursuant to any Bankers' Acceptance
accepted by such Terminated Lender, which amount shall be held by
such Terminated Lender in an interest bearing account as
collateral security for the Borrower's obligations to such
Terminated Lender with respect to such Borrowings, and the
Borrower shall execute in favour of such Terminated Lender a cash
collateral agreement (or such alternate arrangement as may be
agreed upon by the Borrower and such Terminated Lender) in form
and substance satisfactory to such Terminated Lender in respect
of such amount.
(b) Upon the occurrence of any Change in Capital Requirement, each
Lender whose Commitment hereunder is affected by such Change in
Capital Requirement shall transfer its Commitment to another
branch office (or, if such Lender so elects, to an Affiliate) of
such Lender, provided that such transfer shall be made only if
such Lender shall have determined in good faith (which
determination shall, absent manifest error, be final, conclusive
and binding upon all parties) that (i) on the basis of existing
circumstances, such transfer will avoid the increased costs
resulting from such Change in Capital Requirement and will not
result in any additional costs, liabilities or expenses to such
Lender (unless the Borrower agrees to pay such additional costs,
liabilities or expenses of such Lender) and (ii) such transfer is
otherwise consistent with the interests of such Lender. A
transfer of a Lender's Commitment pursuant to this Section
6.11(b) shall be effected pursuant to the provisions of Section
15.01, provided that no consent to such assignment shall be
required from the Borrower or the Agent.
Section 6.12 - Illegality
If the introduction of or any change in applicable law,
regulation, treaty or official directive, or regulatory requirement
(whether or not having the force of law), or the interpretation or
application thereof by any court or by any Governmental Authority charged
with the interpretation or administration thereof, makes it unlawful or
prohibited for any Lender (as determined by such Lender in its sole and
absolute discretion) to make, fund or maintain any Borrowing or any portion
thereof or to perform its obligations under this Agreement, such Lender
may, by written notice to the Borrower through the Agent, terminate its
obligations under this Agreement to make, fund or maintain such Borrowings
or perform such obligations and the Borrower shall prepay such Lender's
Proportion thereof forthwith (or at the end of such period as such Lender
in its sole and absolute discretion may determine), together with all
accrued but unpaid interest, fees and costs as may be applicable to the
date of payment or conversion and may reborrow by notice to the Agent such
Borrowing on another basis of borrowing available under this Agreement.
Section 6.13 - Substitute Basis of Libor Borrowing
If, at any time before the first day of any Libor Interest
Period, any Lender determines in its sole and absolute discretion (which
determination is final, conclusive and binding upon the Borrower) that:
(a) adequate and reasonable means do not exist for ascertaining Libor
for any Libor Loan for such Libor Interest Period;
(b) Libor for any Libor Loan for such Libor Interest Period does not
accurately reflect the effective cost to such Lender of making,
funding or maintaining such Libor Loan or such cost is increased
or the income actually received or receivable by such Lender is
reduced in respect of any such Libor Loan;
(c) the making or deemed re-Borrowing of any Libor Loan or any
portion of any Libor Loan for such Libor Interest Period by such
Lender has become impracticable by reason of circumstances which
materially and adversely affect the London interbank market; or
(d) deposits in US Dollars are not available to such Lender in the
London interbank market in sufficient amounts in the ordinary
course of business for such Libor Interest Period to make, fund
or maintain any Libor Loan during such Libor Interest Period,
then such Lender shall promptly notify the Agent and the Agent shall
promptly notify the Borrower in writing of such determination setting forth
the basis for such determination, whereupon such Lender shall be released
of its obligation to make the relevant Borrowing by way of Libor Loans for
such Libor Interest Period. If the same occurs with respect to any Libor
Loan which is already outstanding, then such Libor Loan shall be treated,
effective on the date of notice to the Borrower from the Agent, as a
Borrowing by way of a Prime Loan pursuant to the Tranche B Facility in an
Equivalent Amount for all purposes under this Agreement. Such Lender will
not be obligated to make any further Libor Loans available pursuant to this
Agreement so long as the circumstances referred to in clauses (a), (b), (c)
or (d) of this Section 6.13 continue.
Section 6.14 - Indemnity for Libor Loans and Short-Term Fixed Rate Loans
If the Borrower repays any Borrowing by way of Libor Loans or
Short-Term Fixed Rate Loans on a day other than the last day of the Libor
Interest Period of such Libor Loans or the maturity date of such Short-Term
Fixed Rate Loans, the Borrower shall indemnify each Lender for any loss or
expense suffered or incurred by such Lender, including, without limitation,
any expense such Lender suffers or incurs by reason of the liquidation or
redeployment of deposits or other funds acquired by such Lender to maintain
its Libor Loan or Short-Term Fixed Rate Loan or any increased interest or
other charges payable to lenders of funds borrowed in order to maintain
such Libor Loan or Short-Term Fixed Rate Loan together with any other
costs, charges or expenses incurred by such Lender with respect thereto. A
certificate of such Lender setting out the basis for the determination of
the amount necessary to indemnify such Lender, together with reasonable
details of any calculations used in such determination shall be conclusive
and binding on the Borrower for the purposes of payment and constitute
prima facie evidence of the amount of such indemnity, absent manifest
error.
Section 6.15 - Replacement of Lenders
The Borrower shall be permitted to replace any Lender which (a)
requests reimbursement for amounts owing pursuant to Section 6.10 or 6.11,
(b) is affected in the manner described in Section 6.12 and as a result
thereof any of the actions described in said Section is required to be
taken, (c) defaults in its obligation to make Loans or accept Bankers'
Acceptances hereunder, or (d) is an Affiliate of a Bank (as defined in the
CFC 1994 Credit Agreement) whose commitment under the CFC 1994 Credit
Agreement is terminated, with a replacement Chartered Bank provided that
(i) such replacement does not conflict with any Applicable Law,
(ii) no Event of Default shall have occurred and be continuing
at the time of such replacement,
(iii) the Borrower shall repay (or the replacement Lender shall
purchase, at par) all Loans and other amounts (including
accrued interest) owing to such replaced Lender
concurrently with such replacement,
(iv) the Borrower shall be liable to such replaced Lender under
Section 6.14 if any Libor Loans or Short-Term Fixed Rate
Loans owing to such replaced Lender shall be repaid (or
purchased) other than on the last day of the Libor Interest
Period relating to such Libor Loan or the maturity date
relating to such Short-Term Fixed Rate Loan,
(v) the Borrower shall pay to such replaced Lender an amount
equal to the maximum, aggregate amount of the Borrower's
obligations pursuant to any Bankers' Acceptance accepted by
such replaced Lender, which amount shall be held by such
replaced Lender in an interest bearing account as
collateral security for the Borrower's obligations to such
replaced Lender with respect to such Borrowings, and the
Borrower shall execute in favour of such replaced Lender a
cash collateral agreement (or such alternate arrangement as
may be agreed upon by the Borrower and such replaced
Lender) in form and substance satisfactory to such replaced
Lender in respect of such amount,
(vi) the replacement Lender, if not already a Lender, and the
terms and conditions of such replacement, shall be
reasonably satisfactory to the Agent,
(vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section
15.01 (provided that the Borrower shall be obligated to pay
the registration and processing fee referred to therein),
(viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any)
required pursuant to Section 6.10 or 6.11, as the case may
be, and
(ix) any such replacement shall not be deemed to be a waiver of
any rights which the Borrower, the Agent or any other
Lender shall have against the replaced Lender.
ARTICLE VII
BANKERS' ACCEPTANCES
Section 7.01 - Issue of Bankers' Acceptances
The Borrower may issue Bankers' Acceptances denominated in
Canadian Dollars, each in accordance with the provisions of this Article
VII.
For the purposes of this Agreement, the full face value of a
Bankers' Acceptance, without discount, shall be used when calculations are
made to determine the amount of Borrowings.
Section 7.02 - Conditions Applicable to Bankers' Acceptances
(a) Notice: The Borrower shall notify the Agent at the Agent's
Branch of Account by irrevocable written notice (which notice
shall be in the form and substance set out in Schedule "B") by
10:00 a.m. one (1) Business Day prior to the Drawdown Date in
respect of any Borrowing by way of Bankers' Acceptances.
(b) Minimum Borrowing: Each Borrowing by way of Bankers' Acceptances
shall be in a minimum aggregate face amount of $10,000,000.
(c) Face Amounts: The face amount of any Bankers' Acceptance shall
be $100,000 or any integral multiple thereof.
(d) Term: Bankers' Acceptances shall be issued and shall mature on a
Business Day. Each Bankers' Acceptance shall have a term of at
least thirty (30) days and not more than three hundred and
sixty-five (365) days excluding days of grace and shall mature on
or before the Maturity Date and shall be in form and substance
satisfactory to such Lender. Notwithstanding the foregoing
sentence, Bankers' Acceptances may from time to time be issued
for a term of seven (7) days if each Lender agrees at such time
to accept Bankers' Acceptances with such term in the amount
determined by the Agent in respect of such Lender in accordance
with Section 7.02(g); provided, however, that the failure of any
Lender to so agree shall not constitute a default by such Lender
under this Agreement for purposes of Section 6.15 or otherwise.
(e) Bankers' Acceptances in Blank: To facilitate the acceptance of
Bankers' Acceptances under this Agreement, the Borrower shall,
upon execution of this Agreement and from time to time as
required, provide to the Agent drafts, in form satisfactory to
the Agent, duly executed and endorsed in blank by the Borrower in
quantities sufficient for each Lender to fulfil its obligations
hereunder. Each Lender is hereby authorized to issue such
Bankers' Acceptances endorsed in blank in such face amounts as
may be determined by such Lender provided that the aggregate
amount thereof is equal to the aggregate amount of Bankers'
Acceptances required to be accepted by such Lender. No Lender
shall be responsible or liable for its failure to accept a
Bankers' Acceptance if the cause of such failure is, in whole or
in part, due to the failure of the Borrower to provide duly
executed and endorsed drafts to the Agent on a timely basis nor
shall any Lender be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such
instrument except loss or improper use arising by reason of the
gross negligence or wilful misconduct of such Lender, its
officers, employees, agents or representatives. Each Lender
shall maintain a record with respect to Bankers' Acceptances (i)
received by it from the Agent in blank hereunder, (ii) voided by
it for any reason, (iii) accepted by it hereunder, (iv) purchased
by it hereunder and (v) cancelled at their respective maturities.
Each Lender further agrees to retain such records in the manner
and for the statutory periods provided in the various provincial
or federal statutes and regulations which apply to such Lender.
(f) Execution of Bankers' Acceptances: Drafts of the Borrower to be
accepted as Bankers' Acceptances hereunder shall be duly executed
on behalf of the Borrower. Notwithstanding that any person whose
signature appears on any Bankers' Acceptance as a signatory for
the Borrower may no longer be an authorized signatory for the
Borrower at the date of issuance of a Bankers' Acceptance, such
signature shall nevertheless be valid and sufficient for all
purposes as if such authority had remained in force at the time
of such issuance and any such Bankers' Acceptance so signed shall
be binding on the Borrower.
(g) Issuance of Bankers' Acceptances: Promptly following receipt of
a notice of Borrowing by way of Bankers' Acceptances, the Agent
shall so advise the Lenders and shall advise each Lender of the
face amount of each Bankers' Acceptance to be accepted by it and
the term thereof. The aggregate face amount of Bankers'
Acceptances to be accepted by a Lender shall be determined by the
Agent by reference to the respective Commitments of the Lenders,
except that, if the face amount of a Bankers' Acceptance, which
would otherwise be accepted by a Lender, would not be $100,000 or
an integral multiple thereof, such face amount shall be increased
or reduced by the Agent in its sole and unfettered discretion to
the nearest integral multiple of $100,000.
(h) Acceptance of Bankers' Acceptances: Each Bankers' Acceptance to
be accepted by a Lender shall be accepted at such Lender's Branch
of Account.
(i) Purchase of Bankers' Acceptances: The Borrower may require any
Lender to purchase promptly, and in any event no later than one
(1) Business Day following written notice by the Borrower to such
Lender and the Agent, from the Borrower at such Lender's BA
Discount Rate any Bankers' Acceptance accepted by it and provide
to the Agent the BA Discount Proceeds for the account of the
Borrower. The Acceptance Fee payable by the Borrower to such
Lender under Section 7.04 in respect of each Bankers' Acceptance
accepted and purchased by such Lender may, at the option of such
Lender, be set off against the BA Discount Proceeds payable by
such Lender under this Section 7.02(i).
(j) Sale of Bankers' Acceptances: Each Lender may at any time and
from time to time hold, sell, rediscount or otherwise dispose of
any or all Bankers' Acceptances accepted and purchased by it.
(k) Waiver of Presentment and Other Conditions: The Borrower waives
presentment for payment and any other defence to payment of any
amounts due to a Lender in respect of a Bankers' Acceptance
accepted by it pursuant to this Agreement which might exist
solely by reason of such Bankers' Acceptance being held, at the
maturity thereof, by such Lender in its own right and the
Borrower agrees not to claim any days of grace if such Lender as
holder sues the Borrower on the Bankers' Acceptances for payment
of the amount payable by the Borrower thereunder.
Section 7.03 - Repayment of Bankers' Acceptances
With respect to each Borrowing which is outstanding hereunder as
a Bankers' Acceptance, the Borrower shall give irrevocable telephone or
written notice (or such other method of notification as may be agreed upon
between the Agent and the Borrower) to the Agent at or before 2:00 p.m.
three (3) Business Days prior to the maturity date of such Bankers'
Acceptance followed by written confirmation electronically transmitted to
the Agent on the same day, of the Borrower's intention to issue Bankers'
Acceptances on such maturity date to provide for the payment of such
maturing Bankers' Acceptance. Any repayment of Bankers' Acceptances must
be made at or before 12:00 noon on the respective maturity dates of such
Bankers' Acceptances. If the Borrower fails to give such notice, the
Borrower shall be deemed to have repaid such maturing Bankers' Acceptances
with funds obtained by way of Prime Loans drawn under the Tranche B
Facility commencing on the maturity date of such maturing Bankers'
Acceptances.
Section 7.04 - Acceptance Fees
Except to the extent that a Lender has set off its Acceptance Fee
against the BA Discount Proceeds payable by such Lender under Section
7.02(i), the Borrower shall pay to the Agent for the account of each Lender
in advance an Acceptance Fee forthwith upon the issuance of a Bankers'
Acceptance to be accepted by such Lender calculated at the rate per annum
equal to the Acceptance Rate, such Acceptance Fee to be calculated on the
face amount of such Bankers' Acceptance and to be computed on the basis of
the number of days in the term of such Bankers' Acceptance and on the basis
of a year of 365 days or 366 days, as applicable. The Acceptance Fee
applicable to a Bankers' Acceptance accepted by a Lender shall be received
by the Agent for the account of the Lender no later than 12:00 noon on the
date of issuance of such Bankers' Acceptance. Subject to the additional
amounts payable under Section 6.04, the amount of Acceptance Fees to be
paid on any date as specified above shall be the amount which would be due
and payable if the Utilization for the term of the Bankers' Acceptance was
less than 33-1/3%.
Section 7.05 - Cash Cover Accounts
Upon the occurrence of an Event of Default or any event which
with the giving of notice or lapse of time or the happening of any further
condition, event or act would constitute an Event of Default, and in
addition to any other rights or remedies of any Lender and the Agent
hereunder, any Lender or the Agent as and by way of collateral security (or
such alternate arrangement as may be agreed upon by the Borrower and such
Lender or the Agent, as applicable) shall be entitled to deposit and retain
in an account to be maintained by the Agent (bearing interest at the
Agent's rates as may be applicable in respect of other deposits of similar
amounts for similar terms) amounts which are received by such Lender or the
Agent from the Borrower hereunder or as proceeds of the exercise of any
rights or remedies of any Lender or the Agent hereunder against the
Borrower, to the extent such amounts may be required to satisfy any
contingent or unmatured obligations or liabilities of the Borrower to the
Lenders or the Agent, or any of them hereunder.
ARTICLE VIII
PAYMENTS AND EVIDENCE OF INDEBTEDNESS
Section 8.01 - Place and Currency of Payment
Payments of principal, interest and fees payable by the Borrower
pursuant to this Agreement shall be paid in the currency in which the
particular Borrowing is denominated and all other payments made pursuant to
this Agreement shall be paid in Canadian Dollars, all such payments to be
for value at or before 2:00 p.m. on the day such payment is due. If such
day is not a Business Day, such amount shall be deemed for all purposes of
this Agreement to be due on the Business Day next following such day and
any such extension of time shall be included for purposes of the
computation of interest or fees payable under this Agreement. Until such
time as the Borrowings shall have been declared to be due and payable, all
payments shall be made at the Agent's Account for Payments, unless
otherwise explicitly provided for elsewhere in this Agreement. If the
Borrowings are declared to be immediately due and payable, all payments,
after such demand, shall be made at the Agent's Branch of Account,
notwithstanding any other provision of this Agreement.
Section 8.02 - Application of Payments Prior to an Event of Default
All payments made by or on behalf of the Borrower pursuant to
this Agreement prior to an Event of Default shall be made to (i) the
Lenders in the case of the Tranche A Facility and (ii) the Agent on behalf
of the Lenders in the case of the Tranche B Facility and, in each case,
shall be applied in each instance in the following order:
(i) firstly, in payment of any amounts due and payable as and
by way of agency fees and recoverable expenses hereunder;
(ii) secondly, in payment of any amounts due and payable as and
by way of facility fees referred to in Section 6.06;
(iii) thirdly, in payment of any interest or default interest or
Acceptance Fees then due and payable on or in respect of
the Borrowings;
(iv) fourthly, in repayment of any principal amounts of the
Borrowings; and
(v) fifthly, in payment of any other amounts then due and
payable by the Borrower hereunder.
Section 8.03 - Manner of Payment and Taxes
All payments to be made by or on behalf of the Borrower under or
in connection with this Agreement are to be made without deduction or
withholding for or on account of any Tax in respect of the payment. If any
Tax is deducted or withheld from any payment, the Borrower shall promptly
remit to the Agent at the Agent's Account for Payment on behalf of each
affected Lender, in the currency in which such payment is to be made, the
equivalent of the amount so deducted or withheld together with relevant
official receipts or other evidence satisfactory to each such affected
Lender evidencing payment to the appropriate taxing authority of each such
Tax by the Borrower on behalf of each such affected Lender. If the
Borrower is prevented by operation of law or otherwise from paying, causing
to be paid or remitting such Tax, the interest payable under this Agreement
shall be increased to such rates as are necessary to yield and remit to
each such affected Lender the principal sum advanced together with interest
at the rates specified in this Agreement after provision for payment of
such Tax. From time to time at the request of the Agent on behalf of each
such affected Lender, the Borrower shall execute and deliver any and all
further instruments necessary or advisable to give full force and effect to
such increase in the rates of interest as are necessary to yield to a
Lender interest at the specified rates. The Borrower shall also indemnify
each such affected Lender in respect of the delay or failure of the
Borrower to make any such payment, including penalties relating thereto or
interest thereon.
Section 8.04 - No Set-Off
All payments to be made by or on behalf of the Borrower shall be
made without set-off or counterclaim.
Section 8.05 - Evidence of Indebtedness
With respect to the Tranche A Facility, each Lender shall open
and maintain on the books of such Lender's Branch of Account, accounts and
records evidencing the Borrowings made available by such Lender under this
Agreement. Each Lender shall record therein the amount of each Borrowing
made available by way of Prime Loans or Short-Term Fixed Rate Loans under
the Tranche A Facility, each payment of principal on account thereof and
interest becoming due to the Lender in respect of such Loans, and all
payments on account thereof. Such accounts and records maintained by each
of the Lenders will constitute, in the absence of manifest error, prima
facie evidence of the indebtedness of the Borrower owing to such Lender in
respect of Loans under the Tranche A Facility pursuant to this Agreement,
the date of each Borrowing made available by the Lender under the Tranche A
Facility and the amount thereof, and the amounts and the dates on which the
Borrower has made payments to the Lender from time to time on account of
the principal thereof and interest thereon.
With respect to amounts owing under this Agreement other than
Loans under the Tranche A Facility, the Agent shall open and maintain on
the books of the Agent at the Agent's Branch of Account, accounts and
records evidencing the Borrowings by each Lender made available by way of
Prime Loans and Libor Loans under the Tranche B Facility and each payment
of principal on account thereof, and shall record the Bankers' Acceptances
accepted and cancelled by each Lender, and all other amounts becoming
payable to the Agent and the Lenders under this Agreement other than Loans
under the Tranche A Facility, and all payments on account thereof. Such
accounts and records maintained by the Agent will constitute, in the
absence of manifest error, prima facie evidence of the indebtedness of the
Borrower owing to the Agent and each Lender pursuant to this Agreement
(other than in respect of Loans under the Tranche A Facility), the date of
each Borrowing under the Tranche B Facility made available by each Lender
and the amount thereof, and the amounts and the dates on which the Borrower
has made payments through the Agent on account of the principal of and
interest on the Borrowings under the Tranche B Facility, fees payable and
other amounts owing hereunder.
The Agent shall maintain at the Agent's Branch of Account a
register (the "Register") for the recordation of the names of the Lenders,
the Commitments of the Lenders, the principal amount of each Loan owing to
each Lender from time to time, the aggregate face amount of Bankers'
Acceptances accepted by each Lender from time to time and the rates of
interest applicable to each outstanding Loan from time to time. Within two
(2) Business Days after the end of each month during the term of this
Agreement, the Agent shall provide a copy of the Register to the Borrower.
ARTICLE IX
CONDITIONS PRECEDENT
Section 9.01 - Conditions to Effectiveness
This Agreement shall be effective on the later of May 23, 1994
and the date on which:
(a) there shall have been delivered to the Agent in sufficient
numbers for distribution to the Lenders in form and substance
satisfactory to the Agent, the following:
(i) a duly executed copy of this Agreement,
(ii) a certificate of the Borrower, dated the Effective Date, in
the form and substance set out in Schedule "O" with
appropriate insertions, executed by the Chairman of the
Board, President, any Vice President, the Treasurer, the
Secretary or any Assistant Secretary of the Borrower
attaching the documents referred to in Sections
9.01(a)(iii), (iv) and (v);
(iii) a certified copy of the constating documents of the
Borrower,
(iv) a certificate of compliance relating to the Borrower issued
under the Canada Business Corporations Act,
(v) a certified resolution or resolutions of the board of
directors of the Borrower relating to the authority of the
Borrower to execute, deliver and perform its obligations
under this Agreement and the instruments, agreements,
certificates, papers and other documents contemplated
herein and the manner in which and by whom the foregoing
documents are to be executed and delivered,
(vi) the opinion of Gowling, Strathy & Henderson, counsel to the
Borrower and CFC, as to (A) the corporate status and
capacity of the Borrower, its authority and legal right to
enter into, observe and perform the terms and obligations
on its part to be observed and performed under this
Agreement, (B) the validity, binding effect and
enforceability of this Agreement as against the Borrower,
(C) the validity, binding effect and enforceability of the
Guarantee as against CFC and (D) such other matters as the
Agent may reasonably request, in the form and substance set
out in Schedule "F",
(vii) a certificate of CFC, dated the Effective Date, in the form
and substance set out in Schedule "O" with appropriate
insertions, executed by the Chairman of the Board, any Vice
President, the Treasurer, the Secretary or any Assistant
Secretary of CFC attaching the documents referred to in
Sections 9.01(a)(viii), (ix) and (x),
(viii) a certified copy of the restated articles of incorporation,
as amended, of CFC,
(ix) a certificate of standing relating to CFC,
(x) a certified resolution or resolutions of the executive
committee of the board of directors of CFC relating to the
authority of CFC to execute, deliver and perform its
obligations under the Guarantee and the manner in which and
by whom the Guarantee is to be executed and delivered,
(xi) a duly executed copy of the Guarantee,
(xii) the opinion of the General Counsel of CFC (A) as to the
corporate status, capacity and good standing of CFC, its
authority and legal right to enter into, observe and
perform the obligations it assumes under the Guarantee and
(B) as to such other matters as the Agent may reasonably
request, in the form and substance set out in Schedule "H",
(xiii) the opinion of McMillan Binch, counsel to the Agent and the
Lenders, in the form and substance set out in Schedule "I",
and
(xiv) a duly executed copy of the undertaking for each Lender in
the form and substance set out in Schedule "J"; and
(b) the Agent shall have received satisfactory evidence that the
Existing Credit Agreement shall have been terminated pursuant to
an irrevocable notice of termination of commitments and that any
amounts owing thereunder by the Borrower shall have been (or
shall upon this Agreement becoming effective be) paid in full.
Section 9.02 - Conditions Precedent to all Borrowings
The obligation of each Lender to make available Borrowings on a
Drawdown Date (which for purposes of this Section 9.02 shall exclude a
Conversion Date or a date on which a Libor Loan is reborrowed by way of
another Libor Loan or a date on which a Bankers' Acceptance is repaid by
way of Bankers' Acceptances) is subject to the following conditions:
(i) the representations and warranties contained in Section
2.01 of this Agreement (other than Section 2.01(j)) and in
Section 7.01 (other than Section 7.01(j)) of the Guarantee
shall be true and correct on and as of such Drawdown Date
for the Borrowing as if made on and as of such date and,
for the purposes hereof, the representations and warranties
set forth in Section 2.01(h) of this Agreement and Section
7.01(h) of the Guarantee shall be read as if they each
referred to the most recent financial statements of the
Borrower or CFC, as applicable, delivered to the Agent
pursuant to Section 10.01(l)(a) prior to such Borrowing,
and
(ii) with respect to Borrowings pursuant to the Tranche B
Facility, the Agent shall have received the timely notice
of the Borrowing required pursuant to Section 3.03, 4.02,
4.06 or 7.02.
Section 9.03 - Waiver of a Condition Precedent
The terms and conditions of Sections 9.01 and 9.02 are inserted
for the sole benefit of the Lenders and may be waived by the Agent on
behalf of the Lenders in whole or in part with or without terms or
conditions, in respect of all or any portion of the Borrowings, without
affecting the right of the Lenders to assert such terms and conditions in
whole or in part in respect of any other Borrowing.
Section 9.04 - Existing Credit Agreement
Without affecting any terms of the Existing Credit Agreement
which expressly survive the termination of the Existing Credit Agreement,
each Lender party to the Existing Credit Agreement hereby waives any
requirement of advance notice of such termination contained in the Existing
Credit Agreement and hereby agrees that the Existing Credit Agreement and
the commitments thereunder (subject to receipt of any other required
consents of any other Person) shall terminate simultaneously with the
satisfaction by the Borrower of the conditions to effectiveness set forth
in Section 9.01.
ARTICLE X
COVENANTS OF THE BORROWER
Section 10.01 - Affirmative Covenants of the Borrower
The Borrower covenants and agrees with each of the Lenders and
the Agent that, so long as any Lender's Commitment remains in effect, any
Borrowing remains outstanding and unpaid or any other amount is owing to
any Lender or the Agent hereunder:
(1) Financial Statements, etc.
(a) The Borrower shall furnish to the Agent in sufficient numbers for
each Lender:
(i) as soon as available and in any event within sixty (60)
days after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Borrower and
of CFC, copies of the financial statements of the Borrower
and financial statements of CFC consisting of, at a
minimum, balance sheets of the Borrower and of CFC, as of
the end of such quarterly accounting-period, and related
statements of net earnings, net earnings retained for use
in the business, and cash flows for the portion of such
fiscal year ended with the last day of such quarterly
accounting period, all in reasonable detail and prepared
and certified (subject to year-end audit adjustments) by
the chief financial officers or other authorized financial
officers of the Borrower and CFC, respectively, and stating
in comparative form the respective figures for the
corresponding date and period in the previous fiscal year,
(ii) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower,
copies of financial statements of the Borrower consisting
of, at a minimum, balance sheets of the Borrower as of the
end of such fiscal year, and copies of the related
statements of net earnings, net earnings retained for use
in the business, and cash flows for such fiscal year, all
in reasonable detail and audited by independent chartered
accountants of nationally recognized standing selected by
the Borrower and stating in comparative form the respective
figures as of the end of and for the previous fiscal year,
together with an auditor's report confirming that in such
auditor's opinion the statements present fairly the
financial position of the Borrower and its Subsidiaries and
the results of their operations for the fiscal year
reported on,
(iii) as soon as available and in any event within ninety (90)
days after the end of each fiscal year of CFC, copies of
financial statements of CFC consisting of, at a minimum,
balance sheets of CFC as of the end of such fiscal year,
and copies of the related statements of net earnings, net
earnings retained for use in the business, and cash flows
for such fiscal year, all in reasonable detail and
certified by independent public accountants of nationally
recognized standing selected by CFC, and stating in
comparative form the respective figures as of the end of
and for the previous fiscal year,
(iv) concurrently with the financial statements for each
quarterly accounting period and for each fiscal year of the
Borrower furnished pursuant to subparagraphs (a)(i) and
(a)(ii) of this Section 10.01(1), (A) a certificate in the
form and substance set out in Schedule "K" of the Chairman
of the Board, the President, an Executive Vice President, a
Vice President or the Treasurer of the Borrower, and
(v) promptly following the Agent's request therefor, such other
information relating to the affairs of the Borrower and its
Subsidiaries or CFC and its Subsidiaries as the Agent may
from time to time reasonably request.
(b) Upon written request by any Lender through the Agent, the
Borrower will furnish to such Lender copies of (i) all such
reports, if any, of the type a publicly held corporation would
generally make available to its shareholders as the Borrower
shall make available to CFC, and (ii) all regular and periodic
reports which the Borrower or any Subsidiary may be required to
file with the Ontario Securities Commission or any similar or
corresponding governmental department, commission, board, bureau
or agency, domestic or foreign, or with any securities exchange.
(2) Payment and Performance of Obligations.
(a) The Borrower shall duly and punctually pay or cause to be paid
the principal of and interest (including any interest on amounts
in default) on and any other payments in respect of the
Borrowings, on the dates, at the places, in the currency and in
the manner mentioned herein.
(b) The Borrower will, and will cause each Subsidiary (but only to
the extent that such Subsidiary's assets shall be sufficient for
the purpose) to:
(i) pay or cause to be paid the principal of and the interest
on all indebtedness heretofore or hereafter incurred or
assumed by it when and as the same shall become due and
payable, unless such indebtedness be renewed or extended,
and
(ii) faithfully perform, observe and discharge all the
covenants, conditions and obligations which are imposed on
it by any and all indentures and other agreements securing
or evidencing such indebtedness or pursuant to which such
indebtedness is issued, and not permit the occurrence of
any act or omission which is or may be declared to be a
default thereunder;
provided, however, that neither the Borrower nor any Subsidiary
shall be required to make any payment or to take any other action
by reason of this Section 10.01(2) at any time while it shall be
contesting in good faith by appropriate proceedings its
obligation so to do, if it shall have set aside on its books
adequate reserves established in accordance with GAAP with
respect thereto.
(c) The Borrower will, and will cause each Subsidiary to, pay and
discharge promptly all taxes, assessments and other governmental
charges or levies imposed upon it or upon its income or upon any
of its property, real, personal or mixed, or upon any part
thereof, as well as all claims of any kind (including claims for
labour, materials and supplies) which, if unpaid, might by law
become a Lien upon its property; provided, however, that neither
the Borrower nor any Subsidiary shall be required to pay any such
tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings and if the Borrower or such
Subsidiary, as the case may be, shall have set aside on its books
adequate reserves established in accordance with GAAP with
respect thereto.
(3) Maintenance of Existence and Property.
The Borrower will remain a corporation validly subsisting under
the laws of Canada or a province thereof and the Borrower will,
and will cause each Subsidiary to:
(i) do all things necessary to preserve and keep in full force
and effect its corporate existence, rights, privileges and
franchises; provided, however, that nothing in this
subparagraph (i) shall prevent the abandonment or
termination of the corporate existence, rights, privileges
and franchises of any Subsidiary if, in the opinion of the
board of directors of the Borrower, such abandonment or
termination is in the best interests of the Borrower and
not disadvantageous in any material respect to the Lenders,
and
(ii) maintain and keep its properties in good repair, working
order and condition, and from time to time make all needful
and proper repairs, renewals and replacements, so that the
business carried on in connection therewith may be properly
and advantageously conducted at all times.
(4) Notices.
The Borrower will promptly give notice to the Agent (i) of the
occurrence of any Event of Default or any event which with notice
or lapse of time or both would constitute an Event of Default,
(ii) of any event of default under any material instrument or
other agreement of the Borrower or any of its Subsidiaries taken
as a whole (and in the case of a notice under this clause (ii) or
the foregoing clause (i), such notice shall be accompanied by a
certificate of any Vice President, the Treasurer or the
Controller of the Borrower specifying the nature of such event,
the period of existence thereof, and the action that the Borrower
proposes to take with respect thereto), (iii) of any litigation,
proceeding, investigation or dispute which may exist at any time,
involving the Borrower or any of its Subsidiaries and any
Governmental Authority or any other Person which might have a
materially adverse effect upon the business, operations, assets
or condition, financial or otherwise, of the Borrower and any of
its Subsidiaries taken as a whole, and (iv) of any change in the
ownership of shares of capital stock of the Borrower which are
entitled to vote under all circumstances for the election of the
board of directors of the Borrower.
(5) Change in Debt Ratings.
The Borrower will promptly give notice to the Agent of each
change in the long-term senior unsecured debt ratings assigned to
CFC by S&P, Moody's, D&P or Fitch and any change in the Status.
Section 10.02 - Negative Covenants of the Borrower
The Borrower covenants and agrees with each of the Lenders and
the Agent that, so long as any Lender's Commitment remains in effect, any
Borrowing remains outstanding and unpaid or any other amount is owing to
any Lender or the Agent hereunder:
(1) Consolidated Tangible Net Worth.
The Borrower shall not permit its Consolidated Tangible Net Worth
to be less than $150,000,000.
(2) Limitation on Transactions with Affiliates.
The Borrower will not, and will not permit any Subsidiary to,
engage in any transaction with an Affiliate (other than CFC or
its Subsidiaries) on terms substantially less favourable to the
Borrower or such Subsidiary than would be obtainable at the time
in comparable transactions between the Borrower or such
Subsidiary with Persons who are not Affiliates.
(3) Limitation on Fundamental Changes.
(a) The Borrower shall not, nor shall it permit any Subsidiary to,
amalgamate with any other corporation, nor shall the Borrower or
any Subsidiary enter into any Material Asset Disposition (as
hereinafter defined) except that:
(i) the Borrower may amalgamate with any other Person, provided
that (A) immediately after such amalgamation, no Event of
Default shall have occurred and be continuing, and (B) the
amalgamated corporation shall execute and deliver if
requested by the Agent, in form and substance satisfactory
to the Lenders, ratification of any outstanding Borrowings
and confirmation of its assumption of the Obligations,
(ii) any Subsidiary may amalgamate (A) with the Borrower, (B)
with any one or more wholly-owned Subsidiaries, (C) with
any other corporation, if such Subsidiary shall continue to
be a Subsidiary of the Borrower and immediately after such
amalgamation, no Event of Default shall have occurred and
be continuing, or (D) with any other corporation, if the
disposition of the capital stock of such Subsidiary by its
parent corporation would not constitute a Material Asset
Disposition, and
(iii) any Subsidiary may enter into any Material Asset
Disposition by which its assets are transferred to the
Borrower or a wholly-owned Subsidiary of the Borrower.
For the purposes of this Section 10.02(3)(a), the term "Material
Asset Disposition" shall mean any transaction (not including a
transaction (i) by which a Permitted Encumbrance is created, (ii)
consisting of a sale of Receivables by the Borrower or any of its
Subsidiaries, or (iii) consisting of a lease of assets entered
into in the ordinary course of business of the Borrower or any of
its Subsidiaries) consisting of the sale, lease, transfer or
other disposition of assets having a book value at the time of
such transaction equal to or greater than the greater of (A)
$50,000,000 and (B) 5% of the total book value of all assets of
the Borrower and its Subsidiaries at such time, and any group of
related sales, leases, transfers or other dispositions made
within any period of six consecutive calendar months commencing
on or after the Effective Date shall be treated as one
transaction for the purpose of determining whether the same is a
Material Asset Disposition.
(b) The Borrower will not engage primarily in any business other than
the Finance Business, it being understood that nothing in this
covenant shall prevent Subsidiaries of the Borrower from engaging
in any business other than the Finance Business.
(4) Limitation on Liens.
The Borrower will not, and will not permit any Subsidiary to,
create, assume or incur, or suffer to be created, assumed or
incurred or to exist, any Lien in respect of any property of any
character of the Borrower or such Subsidiary, whether heretofore
or hereafter acquired; excluding, however, from the operation of
this covenant any Permitted Encumbrance.
ARTICLE XI
REIMBURSEMENT OF EXPENSES
Section 11.01 - Reimbursement of Expenses
(a) All statements, reports, certificates, opinions and other
documents or information required to be furnished to the Lenders
or the Agent by the Borrower under this Agreement shall be
supplied by the Borrower, without cost to the Lenders or the
Agent.
(b) The Borrower agrees, on demand:
(i) to pay or reimburse the Agent for all reasonable
out-of-pocket costs and expenses incurred in connection
with the preparation and execution of, and any amendment,
supplement or modification to or waiver under, this
Agreement, the Guarantee and any other documents prepared
in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby and the
administration thereof, including, without limitation, the
reasonable fees and disbursements of McMillan Binch,
counsel to the Agent, the Co-Agents and the Lenders;
(ii) to pay or reimburse each Lender and the Agent for all costs
and expenses (other than legal fees and disbursements)
incurred in connection with the enforcement or preservation
of any rights under this Agreement or the Guarantee and any
other documents prepared in connection herewith or
therewith, and the reasonable fees and disbursements of one
firm of counsel to the Agent, the Co-Agents and the
Lenders; and
(iii) to (A) indemnify each Lender from and against liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (other
than legal fees and disbursements) of any kind whatsoever
(and, with respect to any proceeding or related
proceedings, the reasonable fees and disbursements of one
firm of counsel to the relevant Lenders in connection with
such proceeding(s)) which may at any time (including,
without limitation, at any time following payment of the
Borrowings) be imposed on, incurred by or asserted against
such Lender in any way relating to or arising out of this
Agreement, the Guarantee or any other documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action
taken or omitted by such Lender under or in connection with
any of the foregoing, provided that the Borrower shall not
be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from (I) the ordinary course administration of
this Agreement or such other documents by any Lender or
(II) any Lender's gross negligence or wilful misconduct or
bad faith and (B) pay or reimburse (I) each Lender for any
payments made by such Lender to the Agent pursuant to the
provisions of Section 14.19 and (II) the Agent for any and
all liabilities, expenses or disbursements incurred by it
which pursuant to the provisions of Section 14.19 are the
subject of indemnification payments from the Lenders to the
extent that the Agent, for whatever reason, did not receive
such indemnification payments from any Lender or Lenders.
The agreements in this Section 11.01(b) shall survive repayment
of the Borrowings and all other amounts payable hereunder.
ARTICLE XII
EVENTS OF DEFAULT
Section 12.01 - Events of Default
The occurrence of any one or more of the following events
constitutes an Event of Default under this Agreement:
(a) the non-payment of the principal of any Borrowing or any portion
thereof when such principal payment shall become due and payable
hereunder;
(b) the non-payment of interest on any Borrowing or any portion
thereof or any fee or other amount due under this Agreement for a
period of five (5) Business Days from the date on which such
payment shall become due and payable hereunder;
(c) if either the Borrower or CFC, as applicable, fails to carry out
or observe any covenant or condition contained in Section 10.02
of this Agreement or Section 8.02 of the Guarantee;
(d) if either the Borrower or CFC, as applicable, fails to carry out
or observe any covenant or condition contained in this Agreement
or the Guarantee (other than those described in Sections
12.01(a), (b) and (c)), and such default continues unremedied for
a period of 30 days after receipt by the Borrower of notice of
such default from the Agent;
(e) if the Borrower or any of its Subsidiaries or CFC or any of its
Significant Subsidiaries is adjudged or declared bankrupt or
insolvent or makes an assignment for the benefit of creditors,
petitions or applies to any tribunal for the appointment of a
receiver or trustee for it or for any substantial part of its
property, makes or files a notice of intention to make a proposal
under the Bankruptcy and Insolvency Act or similar or successor
legislation, or commences any proceedings relating to it under
any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction
whether now or hereafter in effect including the Companies'
Creditors Arrangement Act or any similar or successor
legislation, or by any act indicates its consent to, approval of,
or acquiescence in, any such proceeding for it or for any
substantial or material part of its property, or suffers the
appointment of any such receiver or trustee;
(f) the filing of any notice of intention or other commencement of
proceedings for the bankruptcy, insolvency, dissolution,
liquidation or winding-up of the Borrower or any of its
Subsidiaries or for the suspension of the operations of the
Borrower or any of its Subsidiaries or CFC or any of its
Significant Subsidiaries; provided however, if the commencement
of proceedings for the dissolution, liquidation or winding-up of
any Subsidiary of the Borrower or of any Significant Subsidiary
of CFC (excluding the Borrower) is commenced voluntarily, such
action shall not constitute an Event of Default;
(g) if an encumbrancer after due process of law takes possession of
or forecloses or retains, or sells or otherwise disposes of, or
otherwise proceeds to enforce security over any assets of the
Borrower or any of its Subsidiaries or of CFC or any of its
Significant Subsidiaries which constitute a substantial part of
the assets of the Borrower and its Subsidiaries taken as a whole,
or CFC and its Subsidiaries taken as a whole, respectively, or
gives notice of its intention to do any of the foregoing or if a
distress or execution or any similar process is levied or
enforced against such assets and remains unsatisfied for such
period as would permit a sale or other disposition to occur;
(h) if the Borrower or any of its Subsidiaries shall (i) default in
any payment or payments in the aggregate amount of more than
$5,000,000 (or the Equivalent Amount thereof in any other
currency) at any one time on any of its indebtedness, beyond the
period of grace, if any, provided in the instrument or agreement
under which such indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating
to any of its indebtedness in the principal amount of more than
$5,000,000 (or the Equivalent Amount thereof in any other
currency) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such indebtedness to become due prior to its
stated maturity;
(i) if CFC or any of its Significant Subsidiaries shall (i) default
in any payment or payments in the aggregate amount of more than
US$20,000,000 (or the Equivalent Amount thereof in any other
currency) at any one time on any of its indebtedness, beyond the
period of grace, if any, provided in the instrument or agreement
under which such indebtedness was created or (ii) default in the
observance or performance of any agreement or conditions relating
to any of its indebtedness in the principal amount of more than
US$20,000,000 (or the Equivalent Amount thereof in any other
currency) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such indebtedness to become due prior to its
stated maturity;
(j) a writ of execution, attachment or similar process being issued
or levied against all, or a substantial portion of, the property
of the Borrower, any of its Subsidiaries or CFC in connection
with any judgment against any of the Borrower, its Subsidiaries
or CFC in any amount which materially affects the property of the
Borrower, any of its Subsidiaries or CFC and such writ of
execution, attachment or similar process shall not have been
stayed;
(k) if any representation or warranty made by the Borrower or CFC
under this Agreement or the Guarantee or in any document or
certificate furnished to the Lenders by the Borrower or CFC in
connection herewith or therewith or pursuant hereto or thereto
shall prove at any time to be materially incorrect as of the date
made;
(l) if one or more final judgements or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$5,000,000 (or the Equivalent Amount thereof in any other
currency) or more which shall have been unpaid for a period of 60
days and shall not have been stayed; or
(m) if the Borrower or any Subsidiary ceases or takes affirmative
action to cease to carry on any material part of its business as
presently conducted by it provided, however, that Chrysler Life
Insurance Company of Canada may cease to carry on business.
Section 12.02 - Acceleration
Upon the occurrence of any Event of Default, the Agent on behalf
of the Lenders may, and if so requested by the Majority Lenders shall, by
written notice to the Borrower declare the Total Commitment to be
terminated and thereby terminate the right of the Borrower to apply for
further Borrowings and the Agent may, and if so requested by the Majority
Lenders shall, by written notice to the Borrower, declare the Obligations
outstanding to be immediately due and payable without presentation, demand,
protest or other notice of any kind, all of which are expressly waived by
the Borrower. In such event the Borrower shall pay immediately to the
Agent for the account of each Lender all amounts owing or payable under
this Agreement to such Lender together with the face amount of all Bankers'
Acceptances accepted by such Lender and outstanding, failing which all
rights and remedies of the Lenders and Agent shall thereupon become
enforceable.
Section 12.03 - Waiver of Default
No express or implied waiver by a Lender or by the Agent of any
Event of Default shall in any way be or be construed to be, a waiver of any
future or subsequent Event of Default.
Section 12.04 - Application and Sharing of Payments Following Acceleration
Any sum received by the Agent at any time after the Borrowings
have been declared due and payable and which the Agent is obliged to apply
in or towards satisfaction of sums due from the Borrower hereunder shall be
applied by the Agent:
(a) firstly, in or towards payment of any fees or expenses then due
and payable to the Agent in connection with the provision of its
services as Agent hereunder;
(b) secondly, among the Lenders on a pro rata basis in accordance
with amounts due and payable as and by way of facility fees
referred to in Section 6.06 and recoverable expenses hereunder,
in or towards the payment of any such amounts;
(c) thirdly, among the Lenders on a pro rata basis in accordance with
amounts then due and payable as and by way of interest or default
interest on or in respect of the Borrowings, in or towards the
payment of any such amounts;
(d) fourthly, among the Lenders on a pro rata basis in accordance
with amounts due and payable as and by way of the principal
amounts of any Borrowings then outstanding hereunder after
adjustments in accordance with the provisions of Section 14.17,
in or towards repayment of any such amounts; and
(e) fifthly, among the Lenders on a pro rata basis in accordance with
all other amounts then due and payable by the Borrower hereunder,
in or towards satisfaction of any such amounts.
ARTICLE XIII
REMEDIES
Section 13.01 - Remedies Cumulative
For greater certainty, it is expressly understood and agreed that
the rights and remedies of the Agent and the Lenders under this Agreement
are cumulative and are in addition to and not in substitution for any
rights or remedies provided by law; any single or partial exercise by or on
behalf of the Agent or any Lender of any right or remedy for a default or
breach of any term, covenant, condition or agreement herein contained shall
not be deemed to be a waiver of or to alter, affect or prejudice any other
right or remedy or other rights or remedies to which the Agent or such
Lender may be lawfully entitled for the same default or breach, and any
waiver by the Agent or any Lender of the strict observance, performance or
compliance with any term, covenant, condition or agreement herein
contained, and any indulgence granted thereby, shall be deemed not to be a
waiver of that or any subsequent default.
The Agent, on behalf of the Lenders acting on the instructions of
the Majority Lenders, or failing such action by the Agent, the Majority
Lenders on behalf of all Lenders, may, to the extent permitted by
Applicable Laws, bring suit at law, in equity or otherwise for any
available relief or purpose including but not limited to (i) the specific
performance of any covenant or agreement contained in this Agreement, the
Guarantee or in any other document given pursuant to or incidental to this
Agreement, (ii) an injunction against a violation of any of the terms
thereof, (iii) in aid of the exercise of any power granted thereby or by
law, or (iv) to recover judgment for any and all amounts due in respect of
the Borrowings or amounts otherwise due hereunder or under any documents
given in connection with this Agreement.
To the extent permitted by Applicable Law, the Borrower hereby
waives any rights now or hereafter conferred by statute or otherwise which
may limit or modify any of a Lender's rights or remedies under this
Agreement.
Section 13.02 - Set-Off
Upon and after the occurrence of any Event of Default or any
event which with the giving of notice or the lapse of time or the happening
of any further condition, event or act would constitute an Event of
Default, and so long as such event is continuing the Agent and each Lender
and each of their respective branches and offices are hereby authorized by
the Borrower, at any time and from time to time, without notice, (a) to
set-off and apply any and all amounts owing by the Agent or such Lender or
any such branch or office to the Borrower (whether payable in Canadian
Dollars or any other currency, whether matured or unmatured, and in the
case of deposits, whether general or special, time or demand and however
evidenced) other than amounts owing in respect of bank accounts of the
Borrower in respect of which the Borrower is acting as servicer under
receivables sales or securitization transactions where the monies in such
accounts are held in trust for other Persons, against and on account of the
obligations and liabilities of the Borrower due to the Agent or such Lender
under this Agreement (whether such obligations are payable in Canadian
Dollars or any other currency, whether or not any demand has been made
under this Agreement and whether such obligations are unmatured or
contingent), (b) to hold any such amounts owing by the Agent or such Lender
as collateral to secure the obligations and liabilities of the Borrower
under this Agreement to the extent such amounts may be required to satisfy
any contingent or unmatured obligations or liabilities of the Borrower to
the Agent or such Lender hereunder, and (c) to return as unpaid for
insufficient funds any and all cheques and other items drawn against any
deposits so held as the Agent or such Lender in its sole discretion may
elect.
Section 13.03 - Lenders May Perform Covenants
If the Borrower shall fail to perform any of its obligations
under any covenant contained in this Agreement or any other document
delivered hereunder, the Agent may on behalf of the Lenders, on the
instructions of the Majority Lenders, upon five (5) Business Days prior
written notice to the Borrower, perform any such covenant capable of being
performed by it and, if any such covenant requires the payment or
expenditure of money, it may make such payment or expenditure with its own
funds on behalf of the Lenders. All amounts so paid by the Agent hereunder
shall be repaid by the Borrower on demand therefor, and shall bear interest
at the rates set forth in Section 6.05 from and including the date paid by
the Agent hereunder to but excluding the date such amounts are repaid in
full by the Borrower.
ARTICLE XIV
THE AGENT AND THE LENDERS
Section 14.01 - Authorization of Agent
Each Lender irrevocably appoints and authorizes the Agent to take
all action as agent on its behalf and to exercise such powers and perform
such duties under this Agreement and the Guarantee as are delegated to the
Agent by its terms, together with all powers reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement or the
Guarantee, the Agent is not required to exercise any discretion or to take
any action, but is required to act or to refrain from acting (and is fully
protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders. Anything to the contrary in this Agreement or the
Guarantee notwithstanding, the Agent shall never be required to take any
action which exposes the Agent to personal liability or which is contrary
to this Agreement, the Guarantee or Applicable Laws. Except in respect of
the Agent's gross negligence or wilful misconduct, no Lender shall have any
right of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting hereunder or thereunder in accordance with
the terms of this Article XIV.
Section 14.02 - Arrangements for Tranche B Facility Borrowings
The Agent shall give notice to each Lender promptly in writing
upon receipt by the Agent of any request for a Borrowing under the Tranche
B Facility.
The Agent shall advise each Lender of the amount, date and
details of each such Borrowing and of each Lender's participation in each
such Borrowing. At or before 12:00 noon on the Drawdown Date or Conversion
Date, as applicable, each Lender will make its participation available to
the Borrower (i) if by way of Prime Loans and Libor Loans, through the
Agent's Account for Payments and (ii) if by way of the acceptance of
Bankers' Acceptances, at the Lender's Branch of Account.
Section 14.03 - Arrangements for Repayment of Tranche B Facility Borrowings
Prior to any acceleration of the Borrowings made pursuant to
Section 12.02 of this Agreement, upon receipt by the Agent of payments from
the Borrower on account of principal, interest, Acceptance Fees, facility
fees or any other payment made to the Agent on behalf of the Lenders, the
Agent shall pay over to each Lender the amount to which it is entitled
under this Agreement. Such payment shall be made promptly following
receipt and, in any event, the Agent shall use its best efforts to pay to
each Lender such amount on the same Business Day as received by the Agent.
Following any acceleration of the Borrowings pursuant to Section
12.02 of this Agreement, the Lenders shall share any payments subsequently
received in accordance with Section 12.04 of this Agreement. Each Lender
agrees to be bound by a decision of the Majority Lenders with respect to
any direction given to the Agent pursuant to Section 12.02 of this
Agreement. Each Lender shall, subject to Applicable Law, do all such acts
and things as may be necessary or convenient to enable the Agent to act
pursuant to any such direction.
Section 14.04 - Repayment by Lenders to Agent
(a) Unless the Agent has been notified in writing by the Borrower at
least one (1) Business Day prior to the date on which any payment
to be made by the Borrower hereunder is due that the Borrower
does not intend to remit such payment, the Agent may, at its
discretion, assume that the Borrower has remitted such payment
when so due and the Agent may, at its discretion and in reliance
upon such assumption, make available to each Lender on such
payment date an amount equal to such Lender's Proportion or such
other amount of such assumed payment. If the Borrower does not
in fact remit such payment to the Agent, the Agent shall promptly
notify each Lender and each Lender shall forthwith on demand
repay to the Agent the amount of such assumed payment made
available to such Lender, together with interest thereon until
the date of repayment thereof at a rate determined by the Agent
(such rate to be conclusive and binding on such Lender) in
accordance with the Agent's usual banking practice for advances
to financial institutions of like standing to such Lender.
(b) Unless the Agent has been notified in writing by a Lender at
least one (1) Business Day prior to a Drawdown Date or Conversion
Date that such Lender does not intend to make available its
Lender's Proportion of Prime Loans or Lender's Proportion or such
other amount of Libor Loans to be made available on such Drawdown
Date or Conversion Date, the Agent may, at its discretion, assume
that each Lender has remitted funds in an amount equal to its
Lender's Proportion of such Borrowing to the Agent and the Agent
may, at its discretion and in reliance upon such assumption, make
available to the Borrower on such Drawdown Date or Conversion
Date an amount equal to such Lender's Proportion of such
Borrowing. If a Lender does not in fact remit such funds to the
Agent, the Agent shall promptly notify such Lender and such
Lender shall forthwith on demand pay to the Agent the amount made
available by the Agent on behalf of such Lender, together with
interest thereon until the date of payment thereof at a rate
determined by the Agent (such rate to be conclusive and binding
on such Lender) in accordance with the Agent's usual banking
practice for advances to financial institutions of like standing
to such Lender.
Section 14.05 - Disclaimer of Agent
The Agent makes no representation or warranty, and accepts no
responsibility, with respect to the due execution, legality, validity,
sufficiency or enforceability of this Agreement, the Guarantee or any
instrument or document referred to herein or therein or relative hereto or
thereto. The Agent assumes no responsibility for the financial condition
of the Borrower or CFC or for the payment of any of the Obligations or of
the obligations of CFC under the Guarantee. The Agent assumes no
responsibility with respect to the accuracy, authenticity, legality,
validity, sufficiency or enforceability of any documents, papers, materials
or other information furnished by the Borrower, CFC or any other Person to
the Agent or to any Lender in connection with this Agreement or any matter
referred to herein. The Agent shall incur no liability to the Lenders
under or in respect of this Agreement or any documents delivered hereunder
with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment or which may seem to it to be necessary
or desirable in the circumstances, except for its gross negligence or
wilful misconduct.
Section 14.06 - Acknowledgement of Lenders
Each Lender acknowledges to the Agent that it has been, and will
continue to be, solely responsible for making its own independent appraisal
of and investigation into the financial condition, creditworthiness,
affairs, status and nature of the Borrower, CFC, Chrysler Canada and
Chrysler Corporation and accordingly each Lender confirms to the Agent that
it has not relied, and will not hereafter rely on the Agent:
(a) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Borrower, CFC,
Chrysler Canada or Chrysler Corporation in connection with this
Agreement (whether or not such information has been or is
hereafter circulated to such Lender by the Agent);
(b) to inquire as to the performance by the Borrower or CFC of their
respective obligations under this Agreement or the Guarantee; or
(c) to assess or keep under review on its behalf the financial
condition, creditworthiness, affairs, status or nature of the
Borrower, CFC, Chrysler Canada or Chrysler Corporation.
Section 14.07 - Successor Agent
Subject to the appointment and acceptance of a successor agent as
provided in this Section 14.07, the Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, and the Agent may
be removed at any time for cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to
appoint a successor agent with the approval of the Borrower (such approval
not to be unreasonably withheld). Any successor agent appointed under this
Section 14.07 shall be a Lender which has an office in Toronto, Ontario.
If no successor agent shall have been appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days after the
retiring agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring agent, then the retiring agent may, on behalf of
the Lenders and with the approval of the Borrower (such approval not to be
unreasonably withheld), appoint a successor agent. Upon the acceptance of
any appointment as Agent by a successor agent, such successor agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring agent, and the retiring agent shall
be discharged from its duties and obligations under this Agreement. After
any retiring agent's resignation or removal hereunder as the Agent, the
provisions of this Agreement shall continue in effect for its benefit and
for the benefit of the Lenders in respect of any actions taken or omitted
to be taken by the retiring agent while it was acting as the Agent.
Section 14.08 - Notices Between the Lenders and the Agent
All notices by the Lenders to the Agent shall be through the
Agent's Branch of Account and all notices by the Agent to a Lender shall be
through such Lender's Branch of Account.
Section 14.09 - Relations with Borrower and CFC
Each Lender may deal with the Borrower or CFC in all transactions
and generally do any banking business with either of them without having
any liability to account to the other Lenders therefor. With respect to
Royal's (i) Commitment and (ii) Lender's Proportion, Royal shall have the
same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent at the Agent's Branch of
Account.
Save and except for communications between the Borrower and a
Lender in respect of such Lender's commitment to make available Borrowings
under the Tranche A Facility prior to an Event of Default, all
communication with the Borrower and CFC by a Lender in connection with this
Agreement shall be directed through the Agent.
Section 14.10 - Reliance by Agent on Notices, etc.
The Agent shall be entitled to rely upon any writing, letter,
notice, certificate, telecopy, cable, statement, order or other document
believed by the Agent to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and, with respect to legal
matters, to act upon advice of legal advisers selected by the Agent
(including, on the consent of the Majority Lenders, in-house counsel of the
Agent) concerning all matters pertaining to this Agreement, the Guarantee
and the Agent's duties hereunder and the Agent shall incur no liability to
the Borrower or any Lender by reason of relying on such document or acting
on such advice.
Section 14.11 - Reimbursement for Agent's Expenses
Each Lender agrees that it will, on demand, reimburse the Agent
for such Lender's Proportion of any and all costs, expenses and
disbursements (excluding normal overhead and salary expenses of employees
of the Agent incurred in connection with the normal operation of this
Agreement) which may be incurred or made by the Agent in connection with
the making, performance and enforcement of this Agreement for which the
Agent is not promptly reimbursed at any time by or on behalf of the
Borrower, unless such costs or expenses and disbursements arise out of the
Agent's gross negligence or wilful misconduct. The Agent shall not be
obliged to expend its funds or otherwise incur any financial obligations in
connection with this Agreement unless the Agent is so reimbursed.
Section 14.12 - Action by Agent
The Agent shall have the right, subject to the provisions of this
Agreement, to take such actions as the Agent deems necessary or refrain
from taking such actions, or to give agreements, consents, approvals, or
instructions to the Borrower, on behalf of the Lenders in respect of all
matters referred to in or contemplated by this Agreement.
Section 14.13 - Waivers, Amendments, etc.
(a) In Writing: No provision of this Agreement may be amended,
waived, discharged or terminated orally nor may any breach of any of the
provisions of this Agreement be waived or discharged orally other than (in
each case) by an instrument in writing signed by the Borrower and the
Agent, with the consent of the Majority Lenders, on behalf of the Lenders
save and except as provided in this Section 14.13 and Section 14.18.
(b) Agent's Consent: Any amendment or waiver of any provision of
this Agreement which relates to the rights or obligations of the Agent
shall require the written agreement of the Agent thereto.
(c) Unanimous Consent: Where any amendment, waiver, discharge or
termination relates to:
(i) any alteration in the amount of any principal, interest,
fees or other amount payable by the Borrower under this
Agreement or any alteration in the currency or mode of
calculation or computation thereof;
(ii) any change in the Guarantee;
(iii) any lengthening or shortening of the time for any payments
required to be made by the Borrower under this Agreement;
(iv) any lengthening or shortening of the notice period for any
Drawdown Date or Conversion Date;
(v) any reduction in the principal amount of the Borrowings
except as otherwise permitted under this Agreement;
(vi) any change in the Maturity Date;
(vii) any change in the types of Borrowing available under this
Agreement;
(viii) an assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement;
(ix) the provisions of this Section 14.13; or
(x) a change in the percentage specified in the definition of
"Majority Lenders";
and where such amendment, waiver, discharge or termination is consented to
in writing by the Agent and by all the Lenders, such amendment, waiver,
discharge or termination shall be binding upon all the Lenders. In
circumstances other than those contemplated in the foregoing provisions of
this Section 14.13(c), an amendment, waiver, discharge or termination
consented to by the Majority Lenders shall be binding upon all the Lenders.
Section 14.14 - Failure to Act
No failure, omission or delay on the part of the Agent or any
Lender in exercising any right, power or privilege hereunder shall impair
such right, power or privilege or operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege preclude any
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.
Section 14.15 - Agent's Duty to Deliver Documents, etc. Obtained from the
Borrower and CFC
The Agent shall promptly deliver to each of the Lenders such
documents, papers, materials and other information as are furnished by the
Borrower or CFC to the Agent on behalf of the Lenders pursuant to this
Agreement and the Borrower or CFC, as applicable, shall provide the Agent
with sufficient copies of all such information for such purpose. The
Borrower and CFC authorize the Agent and each Lender to share among each
other any information possessed by any of them regarding the Borrower or
CFC. The Agent shall have no other obligation to provide any Lender with
any credit or other information whatsoever with respect to the Borrower or
CFC.
Section 14.16 - No Partnership
Nothing contained in this Agreement and no action taken pursuant
to it shall be deemed to constitute the Lenders a partnership, association,
joint venture or other such entity.
Section 14.17 - Adjustments Among Lenders
(a) The Lenders agree that, after any acceleration pursuant to
Section 12.02 or after the cancellation or termination of the
Total Commitment, they will at any time or from time to time upon
the request of any Lender through the Agent purchase portions of
the Borrowings made available by the other Lenders which remain
outstanding (excluding any Borrowings under the Tranche A
Facility), and make any other adjustments which may be necessary
or appropriate, in order that the amounts of the Borrowings made
available by the respective Lenders which remain outstanding
(excluding any Borrowings under the Tranche A Facility), as
adjusted pursuant to this Section 14.17, will be in the same
proportions as the amounts of the Commitments of the respective
Lenders immediately prior to the cancellation or termination
thereof.
(b) The Lenders agree that, after an acceleration pursuant to Section
12.02 or after the cancellation or termination of the Total
Commitment, the amount of any repayment made by the Borrower
under this Agreement, and the amount of any proceeds of the
exercise of any rights or remedies of the Lenders under this
Agreement, which are to be applied against amounts owing
hereunder, will be so applied in a manner so that to the extent
possible the Borrowings made available by the respective Lenders
which remain outstanding after giving effect to such application
(excluding Borrowings under the Tranche A Facility) will be in
the same proportions as the amounts of the Commitments of the
respective Lenders immediately prior to the cancellation or
termination thereof.
(c) For greater certainty, the Lenders acknowledge and agree that
without limiting the generality of the provisions of paragraphs
(a) and (b) above, such provisions will have application if and
whenever any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right including a right
of set-off, or otherwise) on account of any moneys owing or
payable by the Borrower to it hereunder (excluding any Borrowings
under the Tranche A Facility) in excess of its Lender's
Proportion of payments on account of moneys owing by the Borrower
to all the Lenders hereunder.
(d) The Lenders agree that, where a Lender has Borrowings outstanding
under the Tranche A Facility and the Tranche B Facility
immediately prior to any acceleration pursuant to Section 12.02
or the cancellation or termination of the Total Commitment, such
Lender will apply amounts which are to be applied against amounts
owing hereunder between such Tranche A Facility Borrowings and
Tranche B Facility Borrowings on a pro rata basis in accordance
with the amounts of such Borrowings then outstanding.
(e) The Borrower agrees to be bound by and to do all things necessary
or appropriate to give effect to any and all purchases and other
adjustments made by and between the Lenders pursuant to this
Section 14.17.
Section 14.18 - Amendment of this Article XIV
Save and except for the provisions of Sections 14.07 and 14.13,
the provisions of this Article XIV may be amended or added to, from time to
time, by execution by the Lenders of an instrument in writing and such
instrument in writing shall validly and effectively amend or add to any or
all of the provisions of this Article XIV without requiring the execution
of such instrument in writing by the Borrower, provided such amendment or
addition does not adversely affect the rights or obligations of the
Borrower. The Agent shall forward a copy of such written instrument to the
Borrower as soon as practicable following the execution thereof by the
Lenders.
Section 14.19 - Indemnification of Agent
The Lenders hereby agree to indemnify the Agent in accordance
with their respective Lender's Proportions from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent as
Agent hereunder in any way relating to or arising out of this Agreement or
the Guarantee or any action taken or omitted by the Agent under or in
respect of this Agreement or the Guarantee; provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The Agent may refrain from exercising any right, power or
discretion or taking any action to protect or enforce the rights of any
Lender under this Agreement until it has been indemnified and/or secured to
its satisfaction against any and all costs, losses, expenses or liabilities
(including legal fees) which it would or might sustain or incur as a result
of such action or exercise.
Section 14.20 - The Co-Agents
No Co-Agent in its capacity as such shall have any rights, duties
or responsibilities hereunder, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise
exist against any Co-Agent in its capacity as Co-Agent.
ARTICLE XV
SUCCESSORS AND ASSIGNS, JUDGMENT CURRENCY AND
GOVERNING LAW
Section 15.01 - Successors and Assigns; Participations
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns except that
(a) the Borrower may not assign its rights or obligations hereunder without
the prior consent of all of the Lenders and (b) no assignment by a Lender
of any of its rights or obligations hereunder shall be effective unless (i)
the assignee is a Chartered Bank (unless otherwise agreed by the Borrower
in its sole discretion), (ii) in the event of an assignment of less than
all of such Lender's obligations, (A) the principal amount of such Lender's
obligations so assigned shall be in an aggregate amount of $15,000,000 or
greater and (B) after giving effect to any such assignment, the transferor
Lender (together with any Lender which is an Affiliate of such transferor
Lender) shall retain obligations hereunder in an aggregate amount of
$15,000,000 or greater (unless, in each case, at the Borrower's discretion,
a lesser amount is mutually agreed upon between the Borrower and such
Lender), (iii) the Borrower and the Agent shall have consented to the
making of such assignment (which consent in each case shall not be
unreasonably withheld), (iv) the transferor Lender, the assignee, the Agent
and the Borrower (if its consent to such assignment is required hereunder)
shall have executed and delivered a supplement hereto in the form and
substance set out in Schedule "N", and (v) the transferor Lender shall have
paid to the Agent a registration and processing fee of $2,500; provided,
however, that no consent by the Borrower shall be required in the case of
assignments to a Chartered Bank that is an Affiliate of the assignor Lender
or pursuant to an amalgamation, merger or consolidation of such Lender with
another entity or a similar transaction involving such Lender. The
Borrower shall upon request of the Agent or an assignee pursuant to this
Section 15.01 execute and deliver a form of undertaking for such assignee
in the form and substance set out in Schedule "J".
Each Lender may sell participations to another Chartered Bank in
its Commitment or in all or any part of any Borrowing made available by it
hereunder, in which event, the participant shall not have any rights under
this Agreement or any document evidencing the Borrowing (the participant's
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favour of the participant
thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participations, provided
that (a) the terms of any participation agreement or certificate relating
to any such participation shall prohibit any subparticipations by such
participant; (b) any such participation agreement or certificate shall
permit the Lender granting such participations the right to consent to
waivers, amendments or supplements to this Agreement without the consent of
such participant except in the case of (i) waivers of any Default or Event
of Default described in Section 12.01(a) or (b), and (ii) any amendment or
modification extending the maturity of any Borrowing, or reducing the
interest rate, Acceptance Fee or the facility fee, or extending the time of
payment of interest thereon, or reducing the principal amount thereof, in
each case to the extent such waiver, amendment or supplement directly
affects such participant; and (c) a participating interest of at least
$5,000,000 shall be sold pursuant to any such participation (unless, at the
Borrower's discretion, a lesser amount is mutually agreed upon between the
Borrower and such Lender).
Section 15.02 - Judgment Currency
If for the purposes of obtaining judgment in any court in any
jurisdiction with respect to this Agreement it becomes necessary to convert
into the currency of such jurisdiction (herein called the "Currency") any
amount due hereunder in any currency other than the Currency, then
conversion shall be made at the rate of exchange prevailing on the Business
Day before the day on which judgment is given. For this purpose "rate of
exchange" means the rate at which the Agent will, on the relevant date,
sell such currency in Toronto against the Currency. In the event that
there is a change in the rate of exchange prevailing between the Business
Day before the day on which the judgment is given and the date of payment
of the amount due, the Borrower will, on the date of payment, pay such
additional amounts (if any) as may be necessary to ensure that the amount
paid on such date is the amount in the Currency which when converted at the
rate of exchange prevailing on the date of payment is the amount then due
under this Agreement in such other currency. Any additional amount due
from the Borrower under this Section 15.02 will be due as a separate debt
and shall not be affected by judgment being obtained for any other sums due
under or in respect of this Agreement.
Section 15.03 - Governing Law
The parties agree that this Agreement is conclusively deemed to
be made under, and for all purposes to be governed by and construed in
accordance with, the laws of the Province of Ontario and of Canada
applicable therein without reference to its conflict of laws provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 15.04 - Submission to Jurisdiction
The Borrower hereby irrevocably and unconditionally submits for
itself and its property in any legal action or proceeding commenced by any
party hereto relating to this Agreement, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive jurisdiction of
the courts of the Province of Ontario. The Borrower consents to any such
action or proceeding being brought in such courts, and waive any objection
that they may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought
in an inconvenient court and agree not to plead or claim the same. The
Borrower agrees that service or process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth on the signature pages hereto or at such
other address of which the Agent shall have been notified as set forth in
Section 16.01.
ARTICLE XVI
NOTICE
Section 16.01 - Form and Address for Notice
Unless otherwise expressly provided herein, all notices, requests
and demands or other communications to be given or made under this
Agreement shall be in writing and may be delivered personally or sent by
telecopy (with a follow-up copy sent by prepaid mail) or by prepaid mail
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made, in the case of personal delivery, when delivered,
or in the case of telecopied notice, when telecopied, or in the case of
mailing, when received, to the mailing or applicable telecopy number of a
party indicated opposite the name of the party on the signature pages of
this Agreement, or to such other address as may be hereafter notified as
aforesaid by the party; provided that any notice, request, demand or other
communication to or upon the Agent pursuant to Sections 4.02, 4.05, 5.02,
7.02 or 7.03 shall not be effective until received. In the event normal
mail or courier service shall be interrupted by strike, force majeure or
other cause, then the party sending the demand, request or notice shall
utilize any one of the said services which has not been so interrupted or,
failing the availability of any such service, any other mode of
communication which shall ensure prompt receipt of such demand, request or
notice by the other party or parties.
ARTICLE XVII
MISCELLANEOUS
Section 17.01 - Severability
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction, does not invalidate, affect or impair
the remaining provisions hereof in such jurisdiction and any such
prohibition or unenforceability in any jurisdiction does not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17.02 - Counterparts
This Agreement may be executed in any number of counterparts,
each of which when executed and delivered is an original but all of which
taken together constitute one and the same instrument; any party may
execute this Agreement by signing any counterpart of it.
Section 17.03 - Further Assurances
The Borrower shall from time to time promptly upon the request of
the Agent take such action, and execute and deliver such further documents,
as shall be reasonably required in order to fully perform the terms of, and
carry out the intention of, this Agreement.
Section 17.04 - Term of Agreement
This Agreement shall terminate on the later of the termination of
the Total Commitment and payment in full of all the Obligations.
Section 17.05 - New Lenders
During the term of this Agreement with the consent of the
Borrower, one or more additional Chartered Banks may become a party to this
Agreement by executing a supplement hereto with the Borrower, substantially
in the form and substance set out in Schedule "L" and, upon written
notification thereof to the Agent, such Chartered Bank (herein called a
"New Lender") shall become a Lender for all purposes from the date of such
supplement and shall be bound by and entitled to the benefits of this
Agreement and the Guarantee, and the signature pages of this Agreement
shall be deemed to be amended to add the name, Commitment and Branch of
Account of such New Lender. Effective as of the date on which any New
Lender becomes a Lender pursuant to the provisions of this Section 17.05,
the Total Commitment shall be increased by the amount of such New Lender's
Commitment. If, on the date of such written notification to the Agent,
there are Borrowings outstanding under the Tranche B Facility, the New
Lender on that date shall make available its Lender's Proportion of such
Borrowings by payment thereof on that date, or as soon thereafter as the
Agent determines it is practicable to do so, to the Agent for the
Borrower's account. Forthwith after receipt by the Agent from the New
Lender of its said Lender's Proportion, the Agent shall make available to
each Lender other than the New Lender on such payment date an amount equal
to such Lender's Proportion (based upon a Total Commitment exclusive of the
New Lender's Commitment) of such payment. Notwithstanding anything to the
contrary, a Chartered Bank cannot become a New Lender when there are Libor
Loans or Bankers' Acceptances outstanding under the Tranche B Facility.
The Borrower shall forthwith deliver an executed copy of the supplement to
the Agent which shall, in turn, advise the Lenders of each addition of a
New Lender hereunder, of the amount of its Commitment and of the amount of
any Borrowings from it hereunder made simultaneously upon its addition.
The Borrower shall upon request of the Agent or a New Lender execute and
deliver a form of undertaking for such New Lender in the form and substance
set out in Schedule "J".
Section 17.06 - Increase in Commitments
During the term of this Agreement, with the consent of the
Borrower, any Lender may increase the amount of its Commitment by executing
a supplement hereto with the Borrower, in the form and substance set out in
Schedule "M", and upon written notification thereof to the Agent such
Lender shall be bound by and entitled to the benefits of this Agreement and
the Guarantee with respect to the full amount of its Commitment as so
increased from the date of such supplement and the signature pages hereto
shall be deemed to be amended to add the increased Commitment of such
Lender. On and from the effective date upon which such Lender increases
its Commitment pursuant to the provisions of this Section 17.06, the Total
Commitment shall be increased by the amount of such Lender's additional
Commitment. If, on the date of such written notification to the Agent,
there are Borrowings outstanding under the Tranche B Facility such Lender
on that date shall adjust its Lender's Proportion of such Borrowings, after
giving effect to the increase in its Commitment, by payment of such
adjusting amount on that date, or as soon thereafter as the Agent
determines it is practicable to do so, to the Agent for the Borrower's
account. Forthwith after receipt by the Agent from such Lender of the
amount required to adjust its Lenders' Proportion, the Agent shall make
available to each other Lender on such payment date an amount equal to such
other Lender's Proportion (based upon a Total Commitment exclusive of the
increase in the Lender's Commitment) of such payment. Notwithstanding
anything herein to the contrary, a Lender cannot increase its Commitment
when there are Libor Loans or Bankers' Acceptances outstanding under the
Tranche B Facility. The Borrower shall forthwith deliver an executed copy
of the supplement to the Agent which shall, in turn, advise the Lenders of
such increase in the Commitment of a Lender and of the amount of any
Borrowings from it hereunder made simultaneously upon such increase.
Section 17.07 - Conflict
If there is any conflict between the provisions of this Agreement
and the provisions of any document contemplated hereby or if the provisions
of any document contemplated hereby are inconsistent with the provisions of
this Agreement, then the provisions of this Agreement shall have priority
over and shall override the provisions of such other documents.
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed as of the date and year first above written.
27777 Franklin Road CHRYSLER CREDIT CANADA LTD.
Southfield, Michigan
U.S.A. By: "David A. Robison"
48034-8286
Title: "Vice President and
Attention: Treasurer Treasurer"
Telephone: 810-948-3140
Telecopier: 810-948-3801
13th Floor, 200 Bay Street, ROYAL BANK OF CANADA
South Tower, As Agent
Royal Bank Plaza
Toronto, Ontario By: "David W. Cox"
M5J 2J5
Title: "Senior Manager, Loan
Attention: Manager, Operations Syndications and Asset
Loan Structuring and Sales"
Syndications
Telephone: 416-974-4154
Telecopier: 416-974-2407
Commerce Court West CANADIAN IMPERIAL BANK OF COMMERCE
7th Floor As Co-Agent
Toronto, Ontario
M5L 1A2 By: "Harold Chataway"
Attention: Harold Chataway Title: "Managing Director
Managing Director Automotive Group
Automotive Group North American Corporate
North American Banking"
Corporate Banking
Telephone: 416-980-5315
Telecopier: 416-980-8384
44 King Street West THE BANK OF NOVA SCOTIA
16th Floor As Co-Agent
Toronto, Ontario
M5H 1H1 By: "Cynthia P. Thomas"
Attention: Cynthia Thomas Title: "Senior Relationship
Senior Relationship Manager"
Manager
Telephone: 416-866-4760 By: "Anthony S. Courtright"
Telecopier: 416-866-2009
Title: "Unit Head"
Branch of Account Commitment
(Millions)
$100 ROYAL BANK OF CANADA
20 King Street West By: "R.E. (Ron) Stanley"
10th Floor
Toronto, Ontario Title: "Senior Vice President
M5H 1C4 Corporate Banking -
Multinational"
Attention: Glen D. Carter By: "Glen D. Carter"
Senior Manager
Corporate Banking, Title: "Senior Manager
Multinational Corporate Banking -
Telephone: 416-974-4278 Multinational"
Telecopier: 416-974-5938
<PAGE>
Branch of Account Commitment
(Millions)
$90 CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: "Managing Director
M5L 1A2 Automotive Group
North American Corporate
Attention: Harold Chataway Banking"
Managing Director
Automotoive Group
North American
Corporate Banking
Telephone: 416-980-5315
Telecopier: 416-980-8384
$90 THE BANK OF NOVA SCOTIA
44 King Street West By: "Cynthia P. Thomas"
16th Floor
Toronto, Ontario Title: "Senior Relationship
M5H 1H1 Manager"
Attention: Cynthia Thomas By: "Anthony S. Courtright"
Senior Relationship
Manager Title: "Unit Head"
Telephone: 416-866-4760
Telecopier: 416-866-2009
$60 BANK OF MONTREAL
24th Floor By: "Surjit Rajpal"
First Canadian Place
Toronto, Ontario Title: "Managing Director
M5X 1A1 Diversified Corporate
Accounts, Corporate
Attention: Algis Vaitonis Banking"
Director, Diversified
Corporate Accounts, By: "Kevin J. Malone"
Corporate Banking
Telephone: 416-867-4092 Title: "Director"
Telecopier: 416-867-5818
$60 THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
8th Floor
P.O. Box 1 Title: "Assistant Vice President
Toronto-Dominion Centre Corporate & Investment
Toronto, Ontario Banking Group"
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager, Corporate &
Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
$40 BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: "Vice President"
M5H 1B6
Attention: Richard Hall
Assistant Vice
President
Telephone: 416-863-4008
Telecopier: 416-863-5265
<PAGE>
Branch of Account Commitment
(Millions)
$40 CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: "Vice President"
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice President
Telephone: 416-594-2259 Title: "Vice President"
Telecopier: 416-594-2240
$40 CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: "Vice President"
Toronto, Ontario
M5C 2V9
Attention: David J. Farmer
Vice-President
Telephone: 416-947-9355
Telecopier: 416-947-9471
$40 CREDIT SUISSE CANADA
Credit Suisse Centre By: "Alain Daoust"
525 University Avenue
Suite 1300 Title: "Associate"
Toronto, Ontario
M5G 2K6
By: "Angelo Bisutti"
Attention: Alain Daoust
Associate Title: "Associate"
Telephone: 416-351-3663
Telecopier: 416-351-3635
$40 MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katharine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: "Vice President"
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
$35 NATIONAL BANK OF CANADA
National Bank Building By: "Lili L. Shain"
150 York Street, Suite 1200
Toronto, Ontario Title: "Vice President
M5H 3A9 North American Corporate
Banking"
Attention: Anne L. Brown
Manager, By: "Anne L. Brown"
North American
Corporate Banking Title: "Manager"
Telephone: 416-864-7760
Telecopier: 416-864-7682
<PAGE>
Branch of Account Commitment
(Millions)
$25 ABN AMRO BANK CANADA
Aetna Tower, 15th Floor By: "Joseph Cavanaugh"
79 Wellington Street West
P.O. Box 114 Title: "Vice President
Toronto-Dominion Centre Corporate Banking"
Toronto, Ontario
M5K 1G8 By: "David Lam"
Attention: Joseph Cavanaugh Title: "Manager, Credit"
Vice President
Corporate Banking
Telephone: 416-367-0850
Telecopier: 416-367-1485
$25 BANQUE NATIONALE DE PARIS (CANADA)
36 Toronto Street, 7th Floor By: "Mark B. Kolada"
Toronto, Ontario
M5C 2C5 Title: "Vice President & Deputy
Branch Manager"
Attention: Mark B. Kolada
Vice President & By: "Linda L. Barrett"
Deputy Branch Manager
Telephone: 416-947-3534 Title: "Account Officer"
Telecopier: 416-947-3541
$25 SWISS BANK CORPORATION (CANADA)
P.O. Box 103
207 Queen's Quay West By: "Blaise Ganguin"
Suite 780
Toronto, Ontario Title: "Associate Director
M5J 1A7 Merchant Banking"
Attention: Blaise Ganguin By: "Robin V. J. Scott"
Associate Director
Merchant Banking Title: "Director
Telephone: 416-203-4263 Merchant Banking"
Telecopier: 416-864-4385
$25 UNION BANK OF SWITZERLAND (CANADA)
154 University Avenue, 7th Floor By: "Cheryl Tibbetts"
Toronto, Ontario
M5H 3Z4 Title: "Senior Account Officer"
Attention: Mark O. Bohn
Assistant Vice By: "Mark O. Bohn"
President
Corporate & Institutional Title: "Assistant Vice President
Banking Corporate & Institutional
Telephone: 416-343-1762 Banking"
Telecopier: 416-343-1700
$15 DAI-ICHI KANGYO BANK
(CANADA)
P.O. Box 295, Suite 5025 By: "M. Takemoto"
Commerce Court West
Toronto, Ontario Title: "Vice President
M5L 1H9 Corporate Banking"
Attention: Robin Dunbar
Vice President
Telephone: 416-947-8514
Telecopier: 416-365-7314
<PAGE>
Branch of Account Commitment
(Millions)
$15 DRESDNER BANK CANADA
2 First Canadian Place By: "William J. Eeuwes"
Suite 1700
P.O. Box 430 Title: "Vice President"
Toronto, Ontario
M5X 1E3
By: "Ramona Sankar"
Attention: William J. Eeuwes
Vice President Title: "Assistant Treasurer"
Telephone: 416-369-8332
Telecopier: 416-369-8362
$15 NATIONAL WESTMINSTER BANK OF CANADA
Suite 2060, South Tower By: "Neil L. Stride"
Royal Bank Plaza
P.O. Box 10 Title: "Vice President"
Toronto, Ontario
M5J 2J1
By: "Paula McArdle"
Attention: Paula McArdle
Assistant Vice Title: "Assistant Vice President"
President
Telephone: 416-865-0170
Telecopier: 416-865-0934
$15 SOCIETE GENERALE (CANADA)
Scotia Plaza
100 Yonge Street By: "Eric Dhoste"
Suite 1002
Toronto, Ontario Title: "Senior Vice President
M5C 2W1 Ontario & Western Canada"
Attention: Duncan Irvine By: "Duncan Irvine"
Senior Manager
Corporate Banking Title: "Senior Manager
Telephone: 416-364-2864 Corporate Banking"
Telecopier: 416-364-9996
$15 THE BANK OF TOKYO CANADA
Suite 2100, South Tower By: "Ted S. Vanderlaan"
Royal Bank Plaza
P.O. Box 42 Title: "Assistant Vice President"
Toronto, Ontario
M5J 2J1
Attention: Ted S. Vanderlaan
Assistant Vice President
Telephone: 416-865-8954
Telecopier: 416-865-9511
Exhibit 10-E
CONFORMED COPY
===========================================================================
SHORT TERM
RECEIVABLES PURCHASE AGREEMENT
_______________
CHRYSLER FINANCIAL CORPORATION
CHRYSLER CREDIT CORPORATION
U.S. AUTO RECEIVABLES COMPANY
AMERICAN AUTO RECEIVABLES COMPANY
_______________
CHEMICAL BANK,
as Agent
and
as Administrative Agent
_______________
Dated as of May 23, 1994
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . .1
SECTION 2. AMOUNT AND TERMS OF SHORT TERM COMMITMENTS. . . . . . . . . .2
2.1 Short Term Commitments. . . . . . . . . . . . . . . . . . . .2
2.2 Related Documents . . . . . . . . . . . . . . . . . . . . . .2
2.3 Procedure for Purchase. . . . . . . . . . . . . . . . . . . .2
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Termination or Reduction of Short Term Commitments. . . . . .4
2.6 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.7 Pro Rata Treatment and Payments . . . . . . . . . . . . . . .4
2.8 Addition of Retail Sellers. . . . . . . . . . . . . . . . . .5
2.9 Additional Commitments. . . . . . . . . . . . . . . . . . . .5
SECTION 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .5
3.1 Corporate Existence; Compliance with Law. . . . . . . . . . .5
3.2 Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . . . . .6
3.3 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . .6
3.4 No Material Litigation. . . . . . . . . . . . . . . . . . . .6
3.5 No Default. . . . . . . . . . . . . . . . . . . . . . . . . .6
3.6 Investment Company Act; Other Regulations . . . . . . . . . .6
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . .7
4.1 Conditions to Effectiveness of This Short Term RPA. . . . . .7
4.2 Notice of Effective Date. . . . . . . . . . . . . . . . . . .8
4.3 Conditions to Each Purchase . . . . . . . . . . . . . . . . .8
4.4 Conditions to Addition of Retail Seller . . . . . . . . . . .9
SECTION 5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.2 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.3 Ownership of Retail Sellers and Wholesale Seller. . . . . . .9
5.4 Maintenance of Separate Existence . . . . . . . . . . . . . .9
SECTION 6. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. COMMITMENT TERMINATION EVENTS . . . . . . . . . . . . . . . 11
SECTION 8. THE AGENT AND ADMINISTRATIVE AGENT. . . . . . . . . . . . . 12
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 12
8.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . 13
8.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . 13
8.4 Reliance by Agent and Administrative Agent. . . . . . . . . 13
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . 14
8.6 Non-Reliance on Agent, Administrative Agent and
Other Banks. . . . . . . . . . . . . . . . . . . . . . 14
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . 15
8.8 Agent in Its Individual Capacity. . . . . . . . . . . . . . 15
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . 15
8.10 Successor Administrative Agent. . . . . . . . . . . . . . . 16
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . 16
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . 18
9.4 Survival of Representations and Warranties. . . . . . . . . 18
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . 18
9.6 Successors and Assigns; Participations; Purchasing
Banks. . . . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Clearing Accounts . . . . . . . . . . . . . . . . . . . . . 22
9.8 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . 23
9.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 23
9.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . 24
9.11 Integration . . . . . . . . . . . . . . . . . . . . . . . . 24
9.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 24
9.13 Submission To Jurisdiction; Waivers . . . . . . . . . . . . 24
9.14 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . 25
ANNEX
1 Definitions
SCHEDULE
I Short Term Commitments
EXHIBITS
A Addendum
B Short Term Retail PSA
C Wholesale Series Supplement
D Effective Date Opinion
E Assignment and Acceptance
F Form of New Bank Supplement
G Form of Short Term Commitment Increase Supplement
<PAGE>
SHORT TERM RECEIVABLES PURCHASE AGREEMENT, dated as of May 23,
1994, among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation ("CFC"
or the "Company"), CHRYSLER CREDIT CORPORATION, a Delaware corporation
("CCC"), U.S. AUTO RECEIVABLES COMPANY, a Delaware corporation, in its
capacity as originator of the Wholesale Master Trust referred to below and
seller of receivables under the Wholesale PSA referred to below (in such
capacity, the "Wholesale Seller"), AMERICAN AUTO RECEIVABLES COMPANY, a
Delaware corporation, and the other special purpose subsidiaries of CFC
from time to time parties hereto in their capacities as sellers of
undivided interests in Retail Pooled Property represented by Retail Senior
Certificates (each, in such capacity, a "Retail Seller"), the several
commercial banks from time to time parties to this Short Term RPA (the
"Banks") and CHEMICAL BANK, a New York banking corporation, as agent for
the Banks hereunder (in such capacity, the "Agent") and as administrative
agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, CFC, CCC, the Wholesale Seller and the Retail Seller
have requested that the Banks agree to purchase undivided participating
interests in Retail Pooled Property and in Wholesale Trust Assets (each, as
hereinafter defined);
WHEREAS, subject to the terms and conditions hereof, the Banks
are willing to make such purchases;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The capitalized terms used herein which are
defined in, or by reference in, Annex 1 hereto shall have the meanings
specified therein.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Short Term RPA shall have the
defined meanings when used in the Related Documents or any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in the Related Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to
the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Short Term RPA shall refer to this Short
Term RPA as a whole and not to any particular provision of this Short Term
RPA, and Section, subsection, Schedule and Exhibit references are to this
Short Term RPA unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF SHORT TERM COMMITMENTS
2.1 Short Term Commitments. Subject to the terms and conditions
hereof, during the period from the Effective Date to and including the
Short Term Commitment Termination Date, each Bank severally agrees to
purchase from the Retail Sellers (each such purchase, a "Retail Purchase")
undivided participating interests in Retail Pooled Property and to purchase
from the Wholesale Seller (each such purchase, a "Wholesale Purchase")
undivided participating interests in Wholesale Trust Assets in amounts such
that at any one time such Bank's Invested Amount shall not exceed the
amount of such Bank's Short Term Commitment, provided that the Wholesale
Aggregate Senior Invested Amount shall not, after giving effect to any
proposed Wholesale Purchase, exceed the Wholesale Senior Certificate
Sublimit.
2.2 Related Documents. (a) Retail Purchases shall be made
pursuant to the terms and conditions of the Short Term Retail PSA, and each
Bank's undivided participating interest in the Retail Pooled Property shall
be evidenced by a Retail Senior Certificate issued to such Bank pursuant to
the Short Term Retail PSA.
(b) Wholesale Purchases shall be made pursuant to the terms and
conditions of the Short Term Wholesale Series Supplement, and each Bank's
undivided participating interest in the Wholesale Trust Assets shall be
evidenced by a Wholesale Senior Certificate issued to such Bank pursuant to
the Short Term Wholesale Series Supplement.
2.3 Procedure for Purchase. The Sellers may utilize the Short
Term Commitment of each Bank during the period from the Effective Date to
and including the Short Term Commitment Termination Date on any
Distribution Date or any other Business Day, provided that the Company
shall give the Administrative Agent irrevocable notice (which notice must
be received by the Administrative Agent prior to 10:00 A.M., New York City
time, (a) three Business Days prior to the requested Purchase Date, if all
or any part of the requested Purchase is to initially bear interest at a
rate based on the LIBO Rate or (b) one Business Day prior to the requested
Purchase Date, otherwise), specifying (i) the amount to be purchased, (ii)
the requested Purchase Date, (iii) whether the Purchase is to be a Retail
Purchase, a Wholesale Purchase or a combination thereof, (iv) if the
Purchase is to be entirely or partly a Wholesale Purchase and is made on a
Wholesale Distribution Date, the respective amounts of such Wholesale
Purchase which shall initially bear interest at a rate based on the LIBO
Rate and at a rate based on the Base Rate and (v) if any amount of such
Purchase shall bear interest based on the LIBO Rate, the date of the
succeeding Distribution Date; it being understood that (A) any Wholesale
Purchase made on a day other than a Wholesale Distribution Date shall bear
interest based on the Base Rate until the following Wholesale Distribution
Date and thereafter shall bear interest based on the LIBO Rate or the Base
Rate, as selected pursuant to the Short Term Wholesale Series Supplement,
and (B) any Retail Purchase made on a day other than a Retail Distribution
Date shall bear interest based on the Base Rate until the following Retail
Distribution Date and thereafter shall bear interest based on the LIBO
Rate. On each Purchase Date the Purchases under the Short Term Commitments
shall be in an aggregate amount equal to at least $100,000,000. Upon
receipt of any such notice from the Company, the Administrative Agent shall
promptly notify each Bank thereof. Each Bank shall (subject to subsection
9.7(b)) deposit in its Clearing Account an amount in immediately available
funds equal to the amount of its pro rata share of each Purchase prior to
11:00 A.M., New York City time, on the Purchase Date requested by the
Company. The Agent shall, pursuant to subsection 9.7(a), cause such amount
to be withdrawn from each such Clearing Account and shall make the
aggregate amount so withdrawn available to the Company for the benefit of
the Sellers by depositing the proceeds thereof in the account of the
Company with the Agent.
2.4 Fees.
(a) CCC agrees to pay to the Agent, for the ratable account of
the Banks, a facility fee for each day from and including the Effective
Date to but excluding the later of (i) the last day of the Short Term
Commitment Period and (ii) the date on which the Aggregate Invested Amount
shall have been reduced to zero (such later date, the "Final Fee Payment
Date"). Such fee shall be payable quarterly in arrears on (A) the first
Business Day of each January, April, July and October (for the three-month
period (or portion thereof) ended on the last day of the immediately
preceding month) and (B) on the Final Fee Payment Date (for the period
ended on such date for which no payment has been received pursuant to
clause (A) above) and shall be computed for each day during such period at
a rate per annum equal to 0.1500 of 1% of the Short Term Aggregate
Commitment Amount in effect on such day (or, if the Short Term Commitments
shall have been terminated, on the Aggregate Invested Amount on such day).
(b) Facility fees shall be calculated on the basis of a 365- or
366-day year, as the case may be, for actual days elapsed. Facility fees
that are not paid when due shall bear interest, payable on demand, from the
date when due until paid in full (both before and after judgment) at the
Default Rate.
(c) CCC agrees to pay the Administrative Agent a fee of $2000
per month with respect to each calendar month during which the Aggregate
Invested Amount exceeds zero at any time occurring during the period from
the first day of the calendar month following the calendar month in which
the Effective Date occurs until the Aggregate Invested Amount is zero and
the Short Term Commitments have terminated, payable in arrears on the last
Business Day of each such month.
(d) If any Bank becomes an "affected Purchaser" under Section
11.3(f)(i) of the Short Term Retail PSA or an "affected Bank Series
Certificateholder" under Section 8.5(i) of the Short Term Wholesale Series
Supplement following any "Change in Law" (as defined therein), CCC shall
thereafter increase that portion of the facility fee payable to such
affected Bank under paragraph (a) of this subsection 2.4 to a level, which,
in the opinion of such affected Bank, will adequately compensate such
affected Bank for the costs referred to in such agreements. The Company
may from time to time reduce the compensation to be received pursuant to
this paragraph (d) by any affected Bank as a result of any Change in Law,
to the average compensation (the "Average Compensation") the Company has
agreed, as provided above, to pay the affected Banks as a result of such
Change in Law (such average compensation to be measured by a percentage of
the aggregate Short Term Commitments of such affected Banks).
2.5 Termination or Reduction of Short Term Commitments. The
CFC Parties shall have the right, upon not less than five Business Days'
notice to the Agent, to terminate the Short Term Commitments or, from time
to time, to reduce the amount of Short Term Commitments. Any such
reduction shall be in an amount equal to $100,000,000 or a whole multiple
of $1,000,000 in excess thereof and shall reduce permanently the Short Term
Commitments then in effect.
2.6 Interest. (a) Each Retail Senior Certificate shall bear
interest as set forth in the Short Term Retail PSA.
(b) Each Wholesale Senior Certificate shall bear interest as set
forth in the Short Term Wholesale Series Supplement.
2.7 Pro Rata Treatment and Payments. (a) Each Purchase
hereunder, each payment by CCC on account of any facility fee hereunder and
any reduction of the Short Term Commitments of the Banks shall be made pro
rata according to the respective Commitment Percentages of the Banks. All
payments (including prepayments) by the Sellers on the Certificates and
with respect to fees shall be made without setoff or counterclaim to the
Agent for the account of the Banks at the office of the Agent referred to
in subsection 9.2 in Dollars and in immediately available funds. The Agent
shall promptly distribute such payments to each Bank entitled to receive a
portion thereof by causing such Bank's portion of such payment to be
deposited in such Bank's Clearing Account.
(b) Unless the Agent shall have been notified in writing by any
Bank prior to a Purchase Date that such Bank will not make the amount that
would constitute its Commitment Percentage of the Purchase on such date
available to the Agent, the Agent may assume that such Bank has made such
amount available to the Agent on such Purchase Date, and the Agent may, in
reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is made available to the Agent on a
date after such Purchase Date, such Bank shall pay to the Agent on demand
an amount equal to the product of (i) the daily average Effective Federal
Funds Rate during such period, times (ii) the amount of such Bank's
Commitment Percentage of such Purchase, times (iii) a fraction the
numerator of which is the number of days that elapse from and including
such Purchase Date to the date on which such Bank's Commitment Percentage
of such Purchase shall have become immediately available to the Agent and
the denominator of which is 360. A certificate of the Agent submitted to
any Bank with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Bank's Commitment
Percentage of such Purchase is not in fact made available to the Agent by
such Bank within three Business Days of such Purchase Date, the Agent shall
be entitled to recover such amount with interest thereon at the Base Rate
on demand, from the Company.
2.8 Addition of Retail Sellers. Subject to the terms and
conditions hereof, from time to time a special purpose subsidiary of CFC
may become an additional Retail Seller party hereto by executing an
Additional Seller Supplement hereto and to the Short Term Retail PSA. From
and after the Retail Addition Date with respect to each additional Retail
Seller through but excluding the Retail Addition Date with respect to any
successive additional Retail Seller, all Retail Purchases shall be made
with the Retail Seller which last became party hereto and all other Retail
Sellers shall be party hereto and to the Short Term Retail PSA solely with
respect to Retail Pooled Property in which they previously sold
participating interests.
2.9 Additional Commitments. The Company may, with the consent
of the Agent (which shall not be unreasonably withheld), (a) add any
additional Commercial Bank as a Bank pursuant to a New Bank Supplement,
substantially in the form of Exhibit F, duly executed and delivered by the
Company, the Agent and such Commercial Bank, whereupon such Commercial Bank
(herein called a "New Bank") shall become a Bank for all purposes and to
the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Short Term RPA and the Related Documents,
Schedule I hereto shall be deemed to be amended to add the name and Short
Term Commitment of such New Bank and the Short Term Aggregate Commitment
Amount shall be increased by the amount of such New Bank's Short Term
Commitment, effective as of the date on which any such New Bank becomes a
Bank pursuant to the provisions of this subsection 2.9(a), or (b) enable an
existing Bank to increase its Short Term Commitment pursuant to a Short
Term Commitment Increase Supplement, substantially in the form of Exhibit
G, duly executed and delivered by the Company, the Agent and such Bank,
whereupon such Bank shall be bound by and entitled to the benefits of this
Short Term RPA and the Related Documents with respect to the full amount of
its Short Term Commitment as so increased, Schedule I hereto shall be
deemed to be amended to add the increased Short Term Commitment of such
Bank, and the Short Term Aggregate Commitment Amount shall be increased by
the amount of such Bank's additional Short Term Commitment, effective as of
the date on which any such Bank increases its Short Term Commitment
pursuant to the provisions of this subsection 2.9. The CFC Parties shall
promptly execute and deliver appropriate Retail Senior Certificates and
Wholesale Series Certificates to each New Bank and, upon surrender of its
old Certificates, to each Bank increasing its Short Term Commitment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Short Term RPA and to make
the Purchases the Company hereby represents and warrants to the Agent and
each Bank that:
3.1 Corporate Existence; Compliance with Law. Each CFC Party
(a) is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification except where the failure so to qualify could not, in the
aggregate have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
3.2 Corporate Power; Authorization; Enforceable Obligations.
Each CFC Party has the corporate power and authority, and the legal right,
to make, deliver and perform this Short Term RPA and the Related Documents
and has taken all necessary corporate action to authorize the Purchases on
the terms and conditions of this Short Term RPA and the Related Documents
and to authorize the execution, delivery and performance of this Short Term
RPA and the Related Documents. No consent or authorization of, filing with
or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Purchases hereunder or with the
execution, delivery, performance, validity or enforceability of this Short
Term RPA or the Related Documents except such consents, authorizations or
filings as have been obtained or made. This Short Term RPA has been, and
each Related Document will be, duly executed and delivered on behalf of
each CFC Party party thereto. This Short Term RPA constitutes, and each
Related Document when executed and delivered will constitute, a legal,
valid and binding obligation of each CFC Party party thereto enforceable
against such CFC Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.3 No Legal Bar. The execution, delivery and performance of
this Short Term RPA and the Related Documents, the Purchases hereunder and
the use of the proceeds thereof will not violate the certificate or
articles of incorporation, by-laws, other organizational or governing
documents, any Requirement of Law or any Contractual Obligation of any CFC
Party.
3.4 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company
or any CFC Party or against any of its or their respective properties or
revenues (a) with respect to this Short Term RPA or the Related Documents
or any of the transactions contemplated hereby, or (b) which could have a
Material Adverse Effect.
3.5 No Default. No Commitment Termination Event has occurred
and is continuing.
3.6 Investment Company Act; Other Regulations. No CFC Party is
an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of This Short Term RPA. This
Short Term RPA shall become effective on the date (the "Effective Date")
that the Agent shall have received the following:
(a) Agreement. (i) This Short Term RPA, executed and delivered
by a duly authorized officer of each CFC Party party hereto and (ii)
from each of the Persons listed on Schedule I, an executed Addendum.
(b) Short Term Retail PSA. (i) The Short Term Retail PSA,
executed and delivered by a duly authorized officer of each CFC Party
party thereto and (ii) a certificate of a Responsible Officer of the
Company that the conditions to the effectiveness of the Short Term
Retail PSA set forth therein have been satisfied.
(c) Short Term Wholesale Series Supplement. (i) The Short Term
Wholesale Series Supplement, executed and delivered by a duly
authorized officer of each CFC Party party thereto and (ii) a
certificate of a Responsible Officer of the Company that the
conditions to the effectiveness of the Short Term Wholesale Series
Supplement set forth therein have been satisfied.
(d) Corporate Proceedings of the Company. A copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of each CFC Party authorizing the execution,
delivery and performance of this Short Term RPA and the other Related
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of such CFC Party, which certificate shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(e) Corporate Documents. True and complete copies of the
articles or certificate of incorporation and by-laws of each CFC
Party, certified as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such CFC Party.
(f) No Violation. A certificate of a Responsible Officer of the
Company that the consummation of the transactions contemplated hereby
shall not contravene, violate or conflict with, as to any CFC Party,
any Requirement of Law or the certificate or articles of
incorporation, by-laws or other organizational or governing documents
of such Person.
(g) Consents, Licenses and Approvals. A certificate of a
Responsible Officer of the Company (i) attaching copies of all
consents, authorizations and filings referred to in subsection 3.2,
and (ii) stating that such consents, licenses and filings are in full
force and effect.
(h) Legal Opinions. The executed legal opinion of Allan L.
Ronquillo, Esq., general counsel of the Company, substantially in the
form of Exhibit D.
(i) Existing Short Term Standby RPA. Satisfactory evidence that
the Existing Short Term Standby RPA shall have been terminated
pursuant to an irrevocable notice of termination of commitments, that
any amounts owing thereunder by the Company (including, without
limitation, accrued unpaid commitment fees through the Effective Date)
shall have been (or shall upon the occurrence of the Effective Date
be) paid in full and that the "Aggregate Invested Amount" thereunder
as of the Effective Date shall be equal to zero. Without affecting
any terms of the Existing Short Term Standby RPA which expressly
survive the termination of the Existing Short Term Standby RPA, each
Bank party to the Existing Short Term Standby RPA hereby waives any
requirement of advance notice of such termination contained in the
Existing Short Term Standby RPA and hereby agrees that the Existing
Short Term Standby RPA and the commitments thereunder (subject to
receipt of any other required consents of any other Person) shall
terminate simultaneously with the satisfaction by the Company of the
conditions to effectiveness set forth in this subsection 4.1.
4.2 Notice of Effective Date. Upon satisfaction of the
conditions set forth in subsection 4.1, the Agent shall deliver to each CFC
Party and Bank a notice stating that such conditions have been satisfied
and setting forth the Effective Date.
4.3 Conditions to Each Purchase. The agreement of each Bank to
make any Purchase requested to be made by it on any date (including,
without limitation, its initial Purchase) is subject to the satisfaction of
the conditions precedent set forth in the Short Term Retail PSA, with
respect to Retail Purchases, and in the Short Term Wholesale Series
Supplement with respect to Wholesale Purchases and the following conditions
with respect to all Purchases:
(a) no Commitment Termination Event shall have occurred and
be continuing;
(b) the representations and warranties set forth in Section
3 shall be true and correct in all material respects on and as of
the related Purchase Date;
(c) neither the Company nor CCC shall be in default in the
payment of interest on any Indebtedness of, or assumed by, such
Person when due, which default shall have continued for a period
of 10 days, or in payment of the principal of any such evidence
of Indebtedness when due;
(d) no default shall have occurred and be continuing under
any instrument securing or providing for the issuance of
Indebtedness of the Company or CCC, which default shall have
continued unremedied for a period to permit acceleration of the
maturity of such Indebtedness;
(e) receipt by the Administrative Agent on the date of such
Purchase of a certificate of a Responsible Officer stating that the
conditions set forth in this Section 4.3 have been satisfied.
4.4 Conditions to Addition of Retail Seller. A special purpose
subsidiary shall become an additional Retail Seller on the date (with
respect to such Retail Seller, the "Retail Addition Date") that the Agent
shall have received a certificate of a Responsible Officer of the Servicer
stating that all conditions precedent to the addition of such Seller as a
party to the Short Term Retail PSA (including execution of a supplement
making such Person a party hereto) have been satisfied.
SECTION 5. COVENANTS
The Company hereby agrees that, so long as the Short Term
Commitments remain in effect, any Certificate remains outstanding or any
other amount is owing to any Bank or the Agent hereunder, the Company shall
and shall cause each of the other CFC Parties to:
5.1 Notices. Promptly give notice to the Agent and each Bank of
the occurrence of any Commitment Termination Event and any Default or Event
of Default under and as defined in the CFC Revolving Credit Agreement.
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred
to therein and stating what action, if any, the Company proposes to take
with respect thereto.
5.2 Merger. The Company and CCC will not merge or consolidate
with or into any other Person, except that
(i) the Company may merge or consolidate with or into any
other Person, provided that (A) the Company shall be the
continuing or surviving corporation, and (B) immediately after
such merger or consolidation, the Company shall be able to
fulfill the conditions set forth in subsection 4.3; and
(ii) CCC may merge or consolidate (A) with or into the
Company (provided that the Company shall be the continuing or
surviving corporation), (B) with or into any one or more of its
wholly-owned Subsidiaries (provided that a wholly-owned
Subsidiary of CFC shall be the continuing or surviving
corporation) and (C) with or into any other Person, if CCC shall
be the continuing or surviving corporation and shall continue to
be a Subsidiary of the Company and immediately after such merger
or consolidation, the Company shall be able to fulfill the
conditions set forth in subsection 4.3.
5.3 Ownership of Retail Sellers and Wholesale Seller. The
Company shall maintain ownership of all of the issued and outstanding
shares of each class of capital stock of each Retail Seller and the
Wholesale Seller.
5.4 Maintenance of Separate Existence. Each Seller hereby
agrees that, so long as the Short Term Commitments remain in effect, any
Certificate remains outstanding or any other amount is owing to any Bank or
the Agent hereunder, such Seller shall do all things necessary to maintain
its corporate existence separate and apart from CCC, the Company and other
Affiliates of the Seller, including, without limitation, (i) practicing and
adhering to corporate formalities, such as maintaining appropriate
corporate books and records; (ii) maintaining all of its deposit and other
bank accounts and all of its assets separate from those of any other
Person; (iii) maintaining all of its financial records separate and apart
from those of any other Person; (iv) maintaining its own separate telephone
number, stationery and business forms; (v) accounting for and managing all
of its liabilities separately from those of any of its Affiliates; (vi)
refraining from filing or otherwise initiating or supporting the filing of
a motion in any bankruptcy or other insolvency proceeding involving the
Seller, CCC, the Company, or any other Affiliate of Seller, to
substantively consolidate the Seller with CCC, the Company or any other
Affiliate of Seller; (vii) conducting transactions with its Affiliates only
on an arm's length basis; (viii) refraining from having its obligations
guaranteed by any of its Affiliates and (ix) conducting all of its business
(whether written or oral) solely in its own name.
SECTION 6. GUARANTEE
6.1 Guarantee. (a) The Company hereby unconditionally and
irrevocably covenants and agrees that it will cause CCC duly and punctually
to perform and observe all of the terms, conditions, covenants, agreements
and indemnities of CCC under this Short Term RPA and the Related Documents
strictly in accordance with the terms hereof and thereof and that if for
any reason whatsoever CCC shall fail to so perform and observe such terms,
conditions, covenants, agreements and indemnities, the Company will duly
and punctually perform and observe the same.
(b) The liabilities and obligations of the Company under this
subsection 6.1 shall be absolute and unconditional under all circumstances
and shall be performed by the Company regardless of (i) whether the Banks
shall have taken any steps to collect from CCC any of the amounts payable
by CCC to the Banks under this Short Term RPA or the Related Documents or
shall have otherwise exercised any of their rights or remedies under this
Short Term RPA against CCC, (ii) the validity, legality or enforceability
of this Short Term RPA or of any of the Related Documents, or the
disaffirmance of any thereof in any insolvency, bankruptcy or
reorganization proceedings relating to CCC, (iii) any law, regulation or
decree now or hereafter in effect which might in any manner affect any of
the terms or provisions of this Short Term RPA or any Related Document or
any of the rights of the Banks as against CCC or which might cause or
permit to be invoked any alteration in the time, amount, manner or payment
or performance of this Short Term RPA or any Related Document, (iv) the
merger or consolidation of CCC into or with any corporation or any sale or
transfer by CCC of all or any part of its property, or (v) any other
circumstances whatsoever (with or without a notice to or knowledge of the
Company) which may or might in any manner or to any extent vary the risk of
the Company, or might otherwise constitute a legal or equitable discharge
of a surety or guarantor; it being the purpose and intent of the Company
that the liabilities and obligations of the Company under this subsection
6.1 shall be absolute and unconditional under any and all circumstances,
and shall not be discharged except by payment and performance as in this
Short Term RPA provided.
(c) Without in any way affecting or impairing the liabilities
and obligations of the Company under this subsection 6.1, the Banks may at
any time and from time to time in their discretion, without the consent of,
or notice to the Company, (i) extend or change the time, manner, place or
terms of payment of any or all of the amounts payable by CCC to the Banks
under this Short Term RPA or the Related Documents or amend, supplement,
waive, extend or otherwise modify any of the terms of this Short Term RPA
or the Related Documents or (ii) settle or compromise any of the amounts
payable by CCC to the Banks under this Short Term RPA or the Related
Documents or subordinate the same to the claims of others.
(d) The provisions of this subsection 6.1 shall continue to be
effective or be reinstated, as the case may be, if at any time payment of
any of the amounts payable by CCC to the Banks under this Short Term RPA or
the Related Documents is rescinded or must otherwise be restored or
returned by the Banks upon the insolvency, bankruptcy or reorganization of
CCC, or otherwise, all as though such payment had not been made. The
Company hereby waives (i) notice of the occurrence of any default
hereunder, (ii) any requirement of diligence or promptness on the part of
the Banks in making demand, commencing suit or exercising any other right
or remedy under this Short Term RPA or the Related Documents, or otherwise,
and (iii) any right to require the Banks to exercise any right or remedy
against CCC prior to enforcing any of its rights against the Company under
this subsection 6.1.
(e) The Company covenants and agrees that so long as any of the
amounts payable by CCC to the Banks under this Short Term RPA or any
Related Document remains unpaid, the Company will maintain ownership of not
less than 80% of the issued and outstanding shares of each class of capital
stock of CCC that is entitled to vote generally for the election of
directors; provided that nothing in this subsection 6.1 shall prevent the
merger or consolidation of the Company and CCC in accordance with
subsection 5.2 hereof.
SECTION 7. COMMITMENT TERMINATION EVENTS
If any of the following events shall occur and be continuing:
(a) (i) any Wholesale Non-Portfolio Early Amortization Event or
(ii) any Retail Non-Portfolio Termination Event shall occur; or any
CFC Party shall fail to pay any other amount payable hereunder, within
five days after any such other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made by the Company herein or
in any other Related Document or which is contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with this Short Term RPA shall prove to
have been incorrect in any material respect on or as of the date made;
or
(c) Any CFC Party shall default in the observance or performance
of any other agreement contained in this Short Term RPA (other than as
provided in paragraphs (a) through (b) of this Section), and such
default shall continue unremedied for a period of 30 days; or
(d) (i) The Company or any of the other CFC Parties shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
the Company or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced
against the Company or any of the other CFC Parties any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of 60 days; or (iii) there shall be commenced
against the Company or any of the other CFC Parties any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Company or any of the other CFC Parties shall take any
action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Company or any of the other CFC Parties shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event, (A) if such event is a Commitment Termination
Event specified in clause (i) or (ii) of paragraph (d) above, automatically
the Short Term Commitments shall immediately terminate without notice of
any kind, which is hereby waived by the CFC Parties and (B) if such event
is any other Commitment Termination Event, so long as such Commitment
Termination Event shall be continuing, with the consent of the Required
Banks, the Agent may, or upon the request of the Required Banks, the Agent
shall, by notice to the Company declare the Short Term Commitments to be
terminated forthwith, whereupon the Short Term Commitments shall
immediately terminate.
SECTION 8. THE AGENT AND ADMINISTRATIVE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Chemical Bank as the Agent and as the Administrative Agent of such
Bank under this Short Term RPA and the Related Documents and each such Bank
irrevocably authorizes Chemical Bank, as the Agent and as Administrative
Agent for such Bank, to take such action on its behalf under the provisions
of this Short Term RPA and the Related Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent or
the Administrative Agent, as the case may be, by the terms of this Short
Term RPA and the Related Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Short Term RPA, neither the Agent nor the
Administrative Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Short Term RPA or any
Related Document or otherwise exist against the Agent or the Administrative
Agent.
8.2 Delegation of Duties. Each of the Agent and the
Administrative Agent may execute any of its duties under this Short Term
RPA and the Related Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the Agent nor the Administrative Agent shall be
responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent, the
Administrative Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Short Term RPA or any Related Document (except
for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by any CFC Party or any
officer thereof contained in this Short Term RPA or any Related Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent or the Administrative Agent under
or in connection with, this Short Term RPA or any Related Document or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Short Term RPA or any Related Document or for any
failure of any CFC Party to perform its obligations hereunder or
thereunder. Neither the Agent nor the Administrative Agent shall be under
any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of,
this Short Term RPA or any Related Document, or to inspect the properties,
books or records of any CFC Party.
8.4 Reliance by Agent and Administrative Agent. The Agent and
the Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any CFC Party),
independent accountants and other experts selected by the Agent or the
Administrative Agent. The Agent and the Administrative Agent shall be
fully justified in failing or refusing to take any action under this Short
Term RPA or any Related Document unless it shall first receive such advice
or concurrence of the Required Banks, or, if required under this Short Term
RPA, all the Banks, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent and the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Short Term RPA and the Related Documents in accordance with a request
of the Required Banks, or, if required under this Short Term RPA, all the
Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks and all future holders of the
Certificates.
8.5 Notice of Default. Neither the Agent nor the Administrative
Agent shall be deemed to have knowledge or notice of the occurrence of any
Commitment Termination Event hereunder unless the Agent or the
Administrative Agent, as the case may be, has received notice from a Bank
or a CFC Party referring to this Short Term RPA, describing such Commitment
Termination Event and stating that such notice is a "notice of default".
In the event that the Agent or the Administrative Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall
take such action with respect to such Commitment Termination Event as shall
be reasonably directed by the Required Banks, or, if required under this
Short Term RPA, all the Banks; provided that unless and until the Agent
shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Commitment Termination Event as it shall deem advisable in
the best interests of the Banks.
8.6 Non-Reliance on Agent, Administrative Agent and Other Banks.
Each Bank expressly acknowledges that neither the Agent, the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Agent or the Administrative Agent hereinafter
taken, including any review of the affairs of the CFC Parties, shall be
deemed to constitute any representation or warranty by the Agent or the
Administrative Agent to any Bank. Each Bank represents to the Agent and
the Administrative Agent that it has, independently and without reliance
upon the Agent, the Administrative Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the CFC Parties, the
Wholesale Master Trust, the Retail Pooled Property and the Wholesale Trust
Assets and made its own decision to make its Purchases hereunder and enter
into this Short Term RPA and the other Related Documents to which it is a
party. Each Bank also represents that it will, independently and without
reliance upon the Agent, the Administrative Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Short Term RPA and the Related
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the CFC Parties, the Wholesale Master
Trust, the Retail Pooled Property and the Wholesale Trust Assets. Except
for notices, reports and other documents expressly required to be furnished
to the Banks by the Agent or the Administrative Agent hereunder, neither
the Agent nor the Administrative Agent shall have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the CFC Parties, the Wholesale
Master Trust, the Retail Pooled Property and the Wholesale Trust Assets
which may come into the possession of the Agent or the Administrative Agent
or any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify each of the
Agent and the Administrative Agent in their respective capacities as such
(to the extent not reimbursed by the CFC Parties and without limiting the
obligation of the CFC Parties to do so), ratably according to the
respective amounts of their respective Commitment Percentages in effect on
the date on which indemnification is sought under this subsection 8.7 (or,
if indemnification is sought after the date upon which the Short Term
Commitments shall have terminated, ratably in accordance with such
Commitment Percentages immediately prior to such date) from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following
the payment of the Certificates) be imposed on, incurred by or asserted
against the Agent or the Administrative Agent, as the case may be, in any
way relating to or arising out of this Short Term RPA, any of the Related
Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Agent or the Administrative Agent, as the case may be, under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's or the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Certificates and all other
amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the CFC Parties as though the Agent were not the
Agent hereunder and under the Related Documents. With respect to any
interest in Retail Pooled Property or Wholesale Trust Assets the Agent may
from time to time hold, the Agent shall have the same rights and powers
under this Short Term RPA and the Related Documents as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent under this
Short Term RPA and the Related Documents, then the Required Banks shall
appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Company, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the
term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Short Term RPA or any
holders of the Certificates. After any retiring Agent's resignation as
Agent, the provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under
this Short Term RPA and the Related Documents.
8.10 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Agent. If
the Administrative Agent shall resign as Administrative Agent under this
Short Term RPA and the Related Documents, then the Agent shall appoint a
successor administrative agent for the Banks, which successor agent shall
be approved by the Company, whereupon such successor agent shall succeed to
the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any
of the parties to this Short Term RPA or any holders of the Certificates.
After any retiring Administrative Agent's resignation as Administrative
Agent, the provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Short Term RPA and the Related Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Short Term RPA, any
Related Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Agent and
the CFC Parties may, from time to time, enter into written amendments,
supplements or modifications hereto and to the Related Documents for the
purpose of adding any provisions to this Short Term RPA or the Related
Documents or changing in any manner the rights of the Banks or of the CFC
Parties hereunder or thereunder or waiving, on such terms and conditions as
the Agent may specify in such instrument, any of the requirements of this
Short Term RPA or the Related Documents or any Commitment Termination Event
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (a) reduce the amount or extend
the maturity of any Certificate or any installment thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any fee
payable to any Bank hereunder, or change the amount of any Bank's Short
Term Commitment, in each case without the consent of each Bank directly
affected thereby, or (b) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition of Required
Banks or waive any of the provisions of subsection 4.3 or change the
definition of Short Term Commitment Termination Date or reduce the
percentages set forth in "Required Subordinated Percentage" or "Required
Reserve Percentage" in the Short Term Wholesale Series Supplement or reduce
the percentages set forth in "Subordinated Percentage" or change the
definition of "Minimum Reserve Account Balance" or "Applicable Senior
Percentage" in the Short Term Retail PSA or amend Section 5.6 of the Short
Term Retail PSA or amend Sections 5.5 through 5.9 of the Short Term
Wholesale Series Supplement, in each case without the written consent of
all the Banks, or (c) amend, modify or waive any provision of Section 8
without the written consent of the then Agent and Administrative Agent or
(d) amend the Short Term Wholesale Series Supplement without the
satisfaction of the Rating Agency Condition (as defined in the Wholesale
PSA), if so required by the Wholesale PSA. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the
Banks and shall be binding upon the CFC Parties, the Banks, the Agent, the
Administrative Agent and all future holders of the Certificates. In the
case of any waiver, the CFC Parties, the Banks, the Agent and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the Related Documents, and any Commitment Termination
Event waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Commitment Termination
Event, or impair any right consequent thereon. Any amendment hereof or of
the Related Documents can be effected without the Administrative Agent
being a party thereto.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy,
telegraph or telex, and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, certified
or registered mail, or by courier, in the case of telecopy notice, when
received, or, in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of telex notice, when sent, answerback
received, addressed as follows in the case of the CFC Parties, the Agent
and the Administrative Agent and as set forth in Schedule I in the case of
the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the
Certificates:
CFC: Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: (810) 948-3801
CCC: Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: (810) 948-3801
The Wholesale
Seller: U. S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: 810-948-3801
The initial American Auto Receivables Company
Retail Seller: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: 810-948-3801
The Agent and Chemical Bank
Administrative 270 Park Avenue
Agent: New York, New York 10017
Attention: John Cannon
Telephone: 212-270-4872
Telecopy: 212-270-1469
provided that any notice, request or demand to or upon the Agent or the
Banks pursuant to subsection 2.3 shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Short Term RPA.
9.5 Payment of Expenses and Taxes. The Company agrees:
(a) to pay or reimburse the Agent and the Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Short Term RPA, the Related
Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the
fees and disbursements of Simpson Thacher & Bartlett, special counsel
to the Agent and the Administrative Agent,
(b) to pay or reimburse each Bank, the Administrative Agent and
the Agent for all its costs and expenses (other than legal fees and
disbursements) incurred in connection with the enforcement or
preservation of any rights under this Short Term RPA, the Related
Documents and any such other documents, the reasonable fees and
disbursements of one firm of special counsel to the Agent, the
Administrative Agent and to the several Banks,
(c) to pay, indemnify, and hold each Bank, the Administrative
Agent and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes (excluding, with
respect to any Bank, net income and franchise taxes imposed with
respect to net income), if any, which may be payable or determined to
be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated
by, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Short Term RPA, the Related
Documents and any such other documents, and
(d) to pay, indemnify, and hold each Bank, the Administrative
Agent and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (other than legal
fees and disbursements) of any kind or nature whatsoever (and, with
respect to any proceeding or related proceedings, the reasonable fees
and disbursements of one firm of special counsel in connection with
such proceeding(s)) with respect to the execution, delivery,
enforcement, performance and administration of this Short Term RPA,
the Related Documents and any such other documents (all the foregoing,
collectively, the "indemnified liabilities"), provided, that the
Company shall have no obligation hereunder to the Agent, the
Administrative Agent or any Bank with respect to indemnified
liabilities arising from (i) the gross negligence or willful
misconduct of the Agent, the Administrative Agent or any such Bank or
(ii) the ordinary course administration of this Short Term RPA, the
Related Documents or such other documents by the Agent, the
Administrative Agent or any such Bank.
(e) The agreements in this subsection 9.5 shall survive payment
of the Certificates and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations; Purchasing Banks.
(a) This Short Term RPA shall be binding upon and inure to the benefit of
the CFC Parties, the Banks, the Agent, the Administrative Agent, all future
holders of the Certificates, and their respective successors and assigns,
except that no CFC Party may assign or transfer any of its rights or
obligations under this Short Term RPA without the prior written consent of
the Required Banks (other than in connection with the addition of an
additional Retail Seller pursuant to the terms hereof).
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating
interests in any Certificate held by such Bank, the Short Term Commitment
of such Bank or any other interest of such Bank hereunder. In the event of
any such sale by a Bank of participating interests to a Participant, such
Bank's obligations under this Short Term RPA to the other parties to this
Short Term RPA shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder
of any such Certificate for all purposes under this Short Term RPA and the
Company and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Short
Term RPA. No Participant shall have any rights under any Certificate (the
Participant's rights against such Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
Participant thereto) and all amounts payable with respect to the
Certificates shall be determined as if such Bank had not sold such
participations provided that (i) the terms of any participation agreement
or certificate relating to any such participation shall prohibit any
subparticipations by such participant; (ii) any such participation
agreement or certificate shall permit the Bank granting such participations
the right to consent to waivers, amendments or supplements to this Short
Term RPA and the Related Documents without the consent of such participant
except in the case of (a) waivers of any Commitment Termination Event
described in Section 7(a), and (b) any amendment or modification reducing
the amount or extending the maturity of any Certificate or any installment
thereof, or reducing the rate or extending the time of payment of interest
thereon, or reducing any fee payable to such Bank hereunder, in each case
to the extent such waiver, amendment or supplement directly affects such
participant and (ii) a participating interest of at least $5,000,000 shall
be sold pursuant to any such participation (unless, at the Company's
discretion, a lesser amount is agreed upon between the Company and such
Bank).
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
any Bank, and, with the consent of the Company and the Agent (which in each
case shall not be unreasonably withheld or delayed) to one or more
additional Commercial Banks ("Purchasing Banks") all or a portion of its
rights and obligations under this Short Term RPA, the Related Documents and
the Certificates, pursuant to an Assignment and Acceptance, executed by
such Purchasing Bank, such transferor Bank and the Agent (and, in the case
of a Purchasing Bank that is not then a Bank, by the Company), and
delivered to the Agent for its acceptance and recording in the Register,
provided that (i) prior to the termination of the Short Term Commitments
(whether on the Short Term Commitment Termination Date or otherwise), any
such sale shall include a proportionate share of each of such transferor
Bank's Short Term Commitment, interests in Retail Pooled Property and
interests in Wholesale Trust Assets and, after any such termination, any
such sale may be of any combination of interests in Retail Pooled Property
and interests in Wholesale Trusts Assets, (ii) in the event of an
assignment of less than all of such Bank's obligations, (x) the principal
amount of such Bank's Short Term Commitment so sold (or, if no Short Term
Commitment is outstanding, the principal amount of interests in Retail
Pooled Property and Wholesale Trust Assets so sold) shall be in an
aggregate amount of $6,000,000 or more and (y) after giving effect to any
such assignment, the transferor Bank and the Purchasing Bank (in each case
together with any Bank which is an affiliate of such transferor Bank or
such Purchasing Bank, respectively) shall each have obligations hereunder
and under the Related Documents aggregating not less than $6,000,000
(unless, in each case, at the Company's discretion, a lesser amount is
agreed upon between the Company and such transferor Bank or Purchasing
Bank, respectively), and (iii) no assignment hereunder shall be effective
unless and until the Agent shall be given written notice of the Clearing
Account of the Purchasing Bank; provided, further, however, that no consent
by the Company shall be required in the case of assignments to a Commercial
Bank controlled by, controlling or under common control with an assignor
Bank or pursuant to a merger or consolidation of such Bank with another
entity or a similar transaction involving such Bank. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Purchasing
Bank thereunder shall be a party hereto and the Related Documents and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder with a Short Term Commitment as set forth
therein, and (y) the transferor Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Short Term RPA (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of a transferor Bank's
rights and obligations under this Short Term RPA and the Related Documents,
such transferor Bank shall cease to be a party hereto). Such Assignment
and Acceptance shall be deemed to amend this Short Term RPA to the extent,
and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under this Short Term
RPA and the Related Documents. On or prior to the effective date
determined pursuant to such Assignment and Acceptance, each Seller, at its
own expense, shall execute and deliver to the Agent in exchange for the
surrendered Retail Senior Certificate and Wholesale Senior Certificate a
new Retail Senior Certificate and Wholesale Senior Certificate issued in
the name of such Purchasing Bank pursuant to the Short Term Retail PSA and
the Short Term Wholesale Series Supplement and, if the transferor Bank has
a retained Short Term Commitment hereunder, new Retail Senior Certificate
and Wholesale Senior Certificate issued in the name of the transferor Bank.
(d) The Agent shall maintain at its address referred to in
subsection 9.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names, addresses and
Clearing Accounts of the Banks and the Short Term Commitment of, and
principal amount of the interests in Retail Pooled Property and Wholesale
Trust Assets sold to, each Bank from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the CFC
Parties, the Agent, the
Administrative Agent and the Banks may treat each Person whose name is
recorded in the Register as the owner of the interests in Retail Pooled
Property and Wholesale Trust Assets recorded therein for all purposes of
this Short Term RPA. The Register shall be available for inspection by the
CFC Parties or any Bank at any reasonable time and from time to time upon
reasonable prior notice. The Agent shall give prompt written notice to the
Company of the making of any entry in the Register or any change in any
such entry.
(e) Upon its receipt of an Assignment and Acceptance executed by
a transferor Bank and a Purchasing Bank (and, in the case of a Purchasing
Bank that is not then a Bank or an affiliate thereof, by the Company and
the Agent), together with payment to the Agent of a registration and
processing fee of $2,500 (or such lesser amount as may be agreed to by the
Agent), the Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Banks and the Company.
(f) Each CFC Party authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning such CFC Party and its affiliates which has been delivered to
such Bank by or on behalf of such CFC Party pursuant to this Short Term RPA
or which has been delivered to such Bank by or on behalf of the Company in
connection with such Bank's credit evaluation of such CFC Party and its
affiliates prior to becoming a party to this Short Term RPA.
(g) If, pursuant to this subsection 9.6, any interest in this
Short Term RPA or any Certificate is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United States
or any State thereof, the transferor Bank shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to represent to
the transferor Bank (for the benefit of the transferor Bank, the Agent and
the CFC Parties) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the CFC Parties or the transferor
Bank with respect to any payments to be made to such Transferee in respect
of the Certificates, (ii) to furnish to the transferor Bank (and, in the
case of any Purchasing Bank registered in the Register, the Agent and the
CFC Parties) either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit of the
transferor Bank, the Agent and the CFC Parties) to provide the transferor
Bank (and, in the case of any Purchasing Bank registered in the Register,
the Agent and the CFC Parties) a new Form 4224 or Form 1001 upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard
to such withholding tax exemption.
9.7 Clearing Accounts. (a) Each Bank irrevocably authorizes
the Agent and the Administrative Agent to cause such Bank's Clearing
Account to be debited as contemplated in subsection 2.3 and to cause to be
created an overdraft in such account if the balance in such Bank's Clearing
Account on a particular date is less than the amount of the Purchase to be
made by such Bank on such day. In addition each Bank irrevocably
authorizes the Agent and the Administrative Agent to cause such Bank's
Clearing Account to be credited, as contemplated in subsection 2.7(a), with
its ratable share of payments received by the Agent from the Sellers. The
Clearing Account of each Bank shall be maintained at its own expense and
free of charge to the Agent, the Administrative Agent and the Company.
(b) The Agent may at any time in its sole discretion, upon
notice to the Company and the Banks, discontinue the use of ACH procedures
in connection with Purchases made pursuant hereto, and the Banks shall
thereafter fund each Purchase required to be made by them hereunder by
making available the amount thereof to the Agent for the account of the
Sellers at the office of the Agent set forth in subsection 9.2 in funds
immediately available to the Agent.
9.8 Adjustments; Set-off.
(a) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of its investments in Retail Pooled Property or
Wholesale Trust Assets, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 7(d), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's
investments in Retail Pooled Property or Wholesale Trust Assets, or
interest thereon, such benefitted Bank shall purchase for cash from the
other Banks such portion of each such other Bank's investments in Retail
Pooled Property or Wholesale Trust Assets, or shall provide such other
Banks with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Bank to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Banks; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Each CFC Party
agrees that each Bank so purchasing a portion of another Bank's investments
in Retail Pooled Property or Wholesale Trust Assets may exercise all rights
of payment (including, without limitation, rights of set-off) with respect
to such portion as fully as if such Bank were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Banks provided
by law, each Bank shall have the right, without prior notice to any CFC
Party, any such notice being expressly waived by each CFC Party to the
extent permitted by applicable law, upon any amount becoming due and
payable by such CFC Party hereunder or under the Related Documents (whether
at the stated maturity, by acceleration or otherwise) to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Bank or any branch or agency thereof to
or for the credit or the account of such CFC Party, provided, however, that
no Bank which maintains any bank account for the benefit of the Wholesale
Master Trust or the Wholesale Trustee shall exercise any right of set-off
or counterclaim or similar right with respect to amounts on deposit in such
bank account. Each Bank agrees promptly to notify the Company and the
Agent after any such set-off and application made by such Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
9.9 Counterparts. This Short Term RPA may be executed by one or
more of the parties to this Short Term RPA on any number of separate
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this
Short Term RPA signed by all the parties shall be lodged with the Company
and the Agent.
9.10 Severability. Any provision of this Short Term RPA which
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.
9.11 Integration. This Short Term RPA represents the agreement
of the CFC Parties, the Agent, the Administrative Agent and the Banks with
respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank
relative to subject matter hereof not expressly set forth or referred to
herein or in the Related Documents.
9.12 GOVERNING LAW. THIS SHORT TERM RPA AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SHORT TERM RPA SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
9.13 Submission To Jurisdiction; Waivers. Each CFC Party hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Short Term RPA and the Related Documents
to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
9.14 Acknowledgements. Each CFC Party hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Short Term RPA and the Related Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship to such Person, and the relationship between Agent and
Banks, on one hand, and such Person, on the other hand, is solely that
of debtor and creditor; and
(c) no joint venture exists among the Banks or among the CFC
Parties and the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Short
Term RPA to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above
written.
CHRYSLER FINANCIAL CORPORATION
By /s/ D.M. Cantwell
Title: Vice President - Corporate
Finance and Development
CHRYSLER CREDIT CORPORATION
By /s/ D.A. Robison
Title: Vice President
and Treasurer
U.S. AUTO RECEIVABLES COMPANY
By /s/ John J. Shea
Title: Assistant Treasurer
AMERICAN AUTO RECEIVABLES COMPANY
By /s/ John J. Shea
Title: Assistant Treasurer
CHEMICAL BANK,
as Agent and as Administrative Agent
By /s/ Karen Sager
Title: Vice President
<PAGE>
ANNEX 1
to Short Term RPA
CERTAIN DEFINITIONS
The following terms shall have the following meanings:
"ACH": an Automated Clearing House.
"Accrual Period": (i) with respect to any Retail Distribution
Date, the period from and including the preceding Retail Distribution
Date (or, with respect to the initial Retail Distribution Date, the
Effective Date) to but excluding such Retail Distribution Date, or
(ii) with respect to any Wholesale Distribution Date, the period from
and including the preceding Wholesale Distribution Date (or, with
respect to the initial Wholesale Distribution Date, the Effective
Date) to but excluding such Wholesale Distribution Date.
"Active Retail Seller": the Retail Seller which became a party
to the Short Term RPA last in time.
"Addendum": an instrument, substantially in the form of
Exhibit A to the Short Term RPA.
"Additional Seller Supplement": an instrument, substantially in
the form of Exhibit H to the Short Term Retail PSA, by which a Retail
Seller becomes a party to the Short Term RPA and the Short Term Retail
PSA.
"Administrative Agent": Chemical Bank, a New York corporation, in
its capacity as administrative agent for the Banks under the Short
Term RPA, or any successor.
"Affiliate": of any corporation, shall mean any Person that,
directly or indirectly, controls or is controlled by or is under
common control with such corporation. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent": Chemical Bank, a New York banking corporation, in its
capacity as agent for the Banks under the Short Term RPA, or any
successor.
"Aggregate Invested Amount": at any time of determination, the
sum of the Retail Senior Amount at such time and the Wholesale
Aggregate Senior Invested Amount at such time.
"Applicable Invested Amount": with respect to any Reference
Bank, (i) with respect to a determination of the LIBO Rate for
purposes of the Short Term Retail PSA, such Reference Bank's
Commitment Percentage of the Retail Senior Amount and (ii) with
respect to a determination of the LIBO Rate for purposes of the Short
Term Wholesale Series Supplement, the "Bank Invested Amount" of such
Reference Bank under and as defined in the Short Term Wholesale Series
Supplement.
"Assessment Rate": for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently
estimated by the Agent as the then current net annual assessment rate
that will be employed in determining amounts payable by the Agent to
the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or any successor) of time deposits made
in dollars at the Agent's domestic offices.
"Assignment and Acceptance": an instrument, substantially in the
form of Exhibit E to the Short Term RPA, pursuant to which a
Purchasing Bank acquires all or a portion of another Bank's Short Term
Commitment and Certificates.
"Banks": as defined in the preamble to the Short Term RPA.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Effective Federal Funds Rate in effect on
such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
Chemical as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective on the
date such change is publicly announced. "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on
such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Federal Reserve Board through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Federal
Reserve Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall
not be so reported for such day or such next preceding Business Day,
the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
If for any reason the Agent shall have determined (which determination
shall be conclusive absent clearly demonstrable error) that it is
unable to ascertain the Base CD Rate or the Effective Federal Funds
Rate or both for any reason, including the inability or failure of the
Agent to obtain sufficient quotations in accordance with the terms
thereof, the Base Rate shall be determined without regard to clause
(b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Effective Federal
Funds Rate shall be effective on the effective date of such change in
the Prime Rate, the Three-Month Secondary CD Rate or the Effective
Federal Funds Rate, respectively.
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required
by law to close, except that, when used in connection with a Purchase
with respect to which the LIBO Rate is determined based upon the
Telerate screen in accordance with the definition of LIBO Rate,
"Business Day" shall mean any Business Day on which dealings in
foreign currencies and exchange between banks may be carried on in
London, England and New York, New York.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation.
"CARCO": Chrysler Auto Receivables Company, a Delaware
corporation.
"Certificates": collectively, the Retail Senior Certificates and
the Wholesale Senior Certificates.
"CCC": Chrysler Credit Corporation, a Delaware corporation.
"CFC": Chrysler Financial Corporation, a Michigan corporation.
"CFC Party": each of CFC, CCC, the Retail Sellers and the
Wholesale Seller.
"CFC Revolving Credit Agreement": the Revolving Credit
Agreement, dated as of May 23, 1994, among CFC, the banks parties
thereto, the Co-Agents parties thereto, Chemical Securities Inc., as
arranger, and Chemical Bank, as agent, as amended, supplemented,
modified, renewed or replaced from time to time.
"Chemical": Chemical Bank, a New York banking corporation, or
any successor.
"Chrysler": Chrysler Corporation, a Delaware corporation.
"Clearing Account": shall mean, as to any Bank, the bank account
designated in its Addendum or such other bank account as such Bank
shall designate in writing to the Agent from time to time, provided
that such other bank account shall be maintained at the office of an
ACH member.
"Commercial Bank" shall mean any Person (a) licensed to engage in
commercial banking business and (b) which on the date it becomes a
Bank hereunder (i) is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes and the Related Documents and (ii) is entitled to
an exemption from, or is not subject to, United States backup
withholding tax.
"Commitment Percentage": as to any Bank at any time, the
percentage of the Short Term Aggregate Commitment Amount then
constituted by such Bank's Short Term Commitment.
"Commitment Termination Event": any of the events specified in
Section 7 of the Short Term RPA, provided that any requirement for the
giving of notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Default Rate": the Base Rate plus 2%.
"Distribution Dates": the collective reference to the Retail
Distribution Date and the Wholesale Distribution Date.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Effective Date": as defined in subsection 4.1 of the Short Term
RPA.
"Effective Federal Funds Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions between
members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average quotations for the day
of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Eurodollar Margin": if Utilization is less than or equal to
33-1/3%, .4750 of 1% per annum, or if Utilization is greater than
33-1/3%, .6000 of 1% per annum.
"Existing Short Term Standby RPA": the Short Term Standby
Receivables Purchase Agreement, dated as of September 15, 1993, among
CFC, CCC, the Wholesale Seller, the Retail Sellers, the banks party
thereto, Chemical Bank, as agent, and Chemical Bank Agency Services
Corporation, as administrative agent, as in effect immediately prior
to the Effective Date of the Short Term RPA.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indebtedness": of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price
of property or services (other than current trade liabilities incurred
in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture
or similar instrument, (b) all obligations of such Person under leases
which appear as capital leases on a consolidated balance sheet of such
Person prepared in accordance with GAAP and (c) all obligations of
such Person in respect of acceptances issued or created for the
account of such Person.
"Invested Amount": with respect to any Bank, at any time of
determination, the sum of the Retail Invested Amount of such Bank at
such time and the Wholesale Invested Amount of such Bank at such time.
"LIBO Rate": with respect to any Accrual Period, the rate per
annum determined on the basis of the rate for deposits in Dollars for
a period equal to such Accrual Period commencing on the first day of
such Accrual Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning
of such Accrual Period. In the event that such rate does not appear
on Page 3750 of the Telerate Service (or otherwise on such service),
the "LIBO Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be
agreed upon by the Agent and CFC or, in the absence of such agreement,
the "LIBO Rate" shall instead be the rate per annum equal to the
average (rounded upward, if necessary, to the nearest 1/100th of 1%)
of the respective rates notified to the Agent by each of the Reference
Banks as the rate at which such Reference Bank is offered Dollar
deposits at or about 10:00 A.M., New York City time, two Business Days
prior to the beginning of such Accrual Period, in the interbank
eurodollar market where the relevant eurodollar and foreign currency
and exchange operations are then being conducted for delivery on the
first day of such Accrual Period for the number of days comprised
therein and in an amount equal to the amount of the Applicable
Invested Amount of such Reference Bank to be outstanding during such
Accrual Period.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or other security
agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement,
and any financing lease having substantially the same economic effect
as any of the foregoing).
"Material Adverse Effect": a material adverse effect on (a) the
ability of any CFC Party to perform its obligations under the Short
Term RPA or the Related Documents or (b) the validity or
enforceability of the Short Term RPA or any of the Related Documents.
"Participant": as defined in subsection 9.6(b) of the Short Term
RPA.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Purchase Date": any Business Day specified in a notice pursuant
to subsection 2.3 of the Short Term RPA as a date on which a Seller
requests the Banks to make a Purchase under the Short Term RPA.
"Purchases": the collective reference to Retail Purchases and
Wholesale Purchases.
"Purchasing Banks": as defined in subsection 9.6(c) of the Short
Term RPA.
"Reference Banks": shall mean Chemical, NBD Bank, N.A., The
Royal Bank of Canada and Swiss Bank Corporation.
"Related Documents": the Short Term Retail PSA, the Short Term
Wholesale Series Supplement, the Retail Certificates, the Wholesale
Certificates, the Retail Purchase Agreement, the Wholesale PSA, the
Receivables Purchase Agreement referred to in the Wholesale PSA, each
"Assignment" (as defined in the Short Term Retail PSA), and each
"Interest Rate Cap Agreement" (as defined in the Short Term Retail
PSA).
"Required Banks": at any time, Banks the Voting Percentages of
which aggregate at least 51%.
"Requirement of Law": as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of
its property is subject.
"Responsible Officer": at any particular time, the Chairman of
the Board, the President, the chief financial officer, the Vice
President-Corporate Finance and Development, the Treasurer or the
Controller of the Company.
"Retail Addition Date": as defined in subsection 4.4 of the
Short Term RPA.
"Retail Certificates": the Retail Senior Certificates and the
"Subordinated Certificate" issued pursuant to the Short Term Retail
PSA.
"Retail Distribution Date": "Distribution Date", as defined in
the Short Term Retail PSA.
"Retail Invested Amount": as to any Bank, as of any date of
determination, the "Invested Amount" of such Bank, as defined in the
Short Term Retail PSA.
"Retail Non-Portfolio Termination Event": any of the following
events:
(a) failure on the part of any Retail Seller or CFC, as
applicable, to make any payment or deposit required by the terms
of the Short Term Retail PSA or any Retail Purchase Agreement
within two Business Days after any such payment or deposit is
required to be made in accordance with the terms thereof;
(b) any Retail Seller shall default in the observance or
performance of any agreement contained in Section 7.1(b)(i) of
the Short Term Retail PSA;
(c) any Retail Seller or CFC shall default in the
observance or performance of any other agreement, covenant or
term contained in the Short Term Retail PSA or any Retail
Purchase Agreement, and such default shall continue unremedied
for a period of 30 days after receipt by the Active Retail Seller
of notice of such default from the Agent;
(d) any representation or warranty made by CFC in any
Retail Purchase Agreement or any Retail Seller in the Short Term
Retail PSA shall prove to have been incorrect in any material
respect on or as of the date made or deemed made, and shall
continue to be incorrect in any material respect 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 by the
Agent to the Active Retail Seller; provided, however, a Retail
Non-Portfolio Termination Event shall not be deemed to have
occurred if such representation or warranty relates to a
"Contract" conveyed under the Short Term Retail PSA and the
Retail Sellers have repurchased such Contract during such period
in accordance with the provisions of the Short Term Retail PSA;
or
(e) a Retail Service Default.
"Retail Pooled Property": "Pooled Property", as defined in the
Short Term Retail PSA.
"Retail Portfolio Termination Event": any of the following
events:
(a) the Retail Senior Amount is greater than zero and the
amount on deposit in the "Reserve Account" maintained under and
pursuant to the Short Term Retail PSA equals zero;
(b) on any Retail Distribution Date, the percentage
equivalent of the decimal obtained by dividing (i) Realized
Losses with respect to all retail automobile installment sale
contracts of CFC and its subsidiaries (including contracts sold
subject to limited recourse provisions) during the three calendar
months ended prior to such Retail Distribution Date by (ii) total
collections plus Realized Losses, in each case with respect to
all such contracts during such three month period, exceeds 4.5%;
or
(c) any "Event of Default" under and as defined in the CFC
Revolving Credit Agreement has occurred and is continuing.
"Retail Purchase": as defined in subsection 2.1 of the Short
Term RPA.
"Retail Purchase Agreement": a "Purchase Agreement", as defined
in the Short Term Retail PSA.
"Retail Seller": as defined in the preamble to the Short Term
RPA.
"Retail Senior Amount": the "Senior Amount", as defined in the
Short Term Retail PSA.
"Retail Senior Certificates": "Senior Certificates", as defined
in the Short Term Retail PSA.
"Retail Servicer": CCC, in its capacity as servicer under the
Short Term Retail PSA and any successor as servicer thereunder.
"Retail Service Default": a "Service Default", as defined in the
Short Term Retail PSA.
"Seller": each of the Wholesale Seller and the Retail Sellers.
"Servicer": shall have the meaning specified in the Short Term
Retail PSA.
"Short Term Aggregate Commitment Amount": at any time, the sum
of the Short Term Commitments of all Banks at such time.
"Short Term Commitment": as to any Bank, the obligation of such
Bank to purchase undivided participating interests in Retail Pooled
Property and Wholesale Trust Assets hereunder in an aggregate
principal amount at any one time outstanding not to exceed the amount
set forth opposite such Bank's name on Schedule I to the Short Term
RPA in the column designated "Short Term Commitments".
"Short Term Commitment Period": the period from and including
the Effective Date to but not including the Short Term Commitment
Termination Date or such earlier date on which the Short Term
Commitments shall terminate as provided in the Short Term RPA.
"Short Term Commitment Termination Date": 364 days after the
Effective Date, or, if such day is not a Business Day, the next
preceding Business Day.
"Short Term Retail PSA": the Short Term Participation and
Servicing Agreement, dated as of May 23, 1994, among the Retail
Sellers, CCC, the Banks, the Agent and the Administrative Agent,
substantially in the form of Exhibit B to the Short Term RPA, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Short Term RPA": the Short Term Receivables Purchase Agreement,
dated as of May 23, 1994, among CFC, CCC, the Wholesale Seller, the
Retail Sellers, the Banks, the Agent and the Administrative Agent, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Short Term Wholesale Series Supplement": the Short Term Bank
Supplement to the Wholesale PSA, dated as of May 23, 1994, among the
Wholesale Seller, the Wholesale Trustee, CCC, the Banks, the Agent and
the Administrative Agent, substantially in the form of Exhibit C to
the Short Term RPA, as the same may be amended, supplemented or
otherwise modified from time to time.
"Statutory Reserves": a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum applicable reserve
percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the
Federal Reserve Board and any other banking authority to which the
Agent is subject with respect to the Base CD Rate (as such term is
used in the definition of "Base Rate"), for new negotiable nonpersonal
time deposits in Dollars of over $100,000 with maturities
approximately equal to three months. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned.
"Transferee": as defined in subsection 9.6(f) of the Short Term
RPA.
"Utilization": as of the last day of any Accrual Period, the
percentage equivalent of a fraction (i) the numerator of which is the
average daily Aggregate Invested Amount during such Accrual Period and
(ii) the denominator of which is the average daily Short Term
Aggregate Commitment Amount during such Accrual Period. If for any
reason there is any Aggregate Invested Amount after the termination of
the Short Term Commitments, the Utilization for each day on or after
the date of such termination shall be deemed to be greater than
33-1/3% (or, in the case of any such termination occurring on the
Short Term Commitment Termination Date, the actual Utilization on such
date immediately prior to giving effect to such termination).
"Voting Percentage": as to any Bank at any time, the percentage
equivalent of a fraction the numerator of which equals such Bank's
Short Term Commitment (or, at any time after the Short Term
Commitments shall have expired or terminated, the aggregate
outstanding principal amount of such Bank's Invested Amount) and the
denominator of which equals the aggregate amount of the Short Term
Commitments of each of the Banks (or, at any time after the Short Term
Commitments shall have expired or terminated, the aggregate
outstanding principal amount of the Invested Amounts of each of the
Banks).
"Wholesale Aggregate Senior Invested Amount": the "Aggregate
Bank Invested Amount", as defined in the Short Term Wholesale Series
Supplement.
"Wholesale Certificates": the Wholesale Senior Certificates
issued pursuant to the Short Term Wholesale Series Supplement.
"Wholesale Distribution Date": a "Distribution Date", as defined
in the Short Term Wholesale Series Supplement.
"Wholesale Early Amortization Event": an "Early Amortization
Event", as defined in the Short Term Wholesale Series Supplement.
"Wholesale Invested Amount": as to any Bank, as of any date of
determination, the "Bank Invested Amount" of such Bank, as defined in
the Short Term Wholesale Series Supplement.
"Wholesale Master Trust": CARCO Auto Loan Master Trust,
established pursuant to the Wholesale PSA.
"Wholesale Non-Portfolio Early Amortization Event": a Wholesale
Early Amortization Event of the type described in Section 9.01 of the
Wholesale PSA or clause (c) or (f) of Section 7.1 of the Short Term
Wholesale Series Supplement.
"Wholesale Portfolio Early Amortization Event": a Wholesale
Early Amortization Event other than a Wholesale Non-Portfolio Early
Amortization Event.
"Wholesale PSA": the Pooling and Servicing Agreement, dated as
of May 31, 1991, as assigned by CARCO to the Wholesale Seller on
August 8, 1991, among the Wholesale Seller, CCC, as Servicer, and the
Wholesale Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.
"Wholesale Purchase": as defined in subsection 2.1 of the Short
Term RPA.
"Wholesale Seller": as defined in the preamble to the Short Term
RPA.
"Wholesale Senior Certificate Sublimit": the lesser of (i)
66-2/3% of the Short Term Aggregate Commitment Amount and (ii)
$333,333,333.
"Wholesale Senior Certificates": the "Bank Series
Certificates", as defined in the Short Term Wholesale Series
Supplement.
"Wholesale Servicer": CCC, in its capacity as servicer under the
Wholesale PSA, and any successor as servicer thereunder.
"Wholesale Trust Assets": "Trust Assets", as defined in the
Wholesale PSA.
"Wholesale Trustee": Manufacturers and Traders Trust Company and
its successors as Trustee under the Wholesale PSA.
Exhibit 10-F
CONFORMED COPY
===========================================================================
SHORT TERM
PARTICIPATION AND SERVICING AGREEMENT
among
AMERICAN AUTO RECEIVABLES COMPANY
CHRYSLER CREDIT CORPORATION
THE PURCHASERS NAMED HEREIN,
CHEMICAL BANK,
as Agent
and
as Administrative Agent
dated as of May 23, 1994
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2 Usage of Terms. . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.3 Calculations. . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.4 References. . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II
Purchase and Sale of Certificates; Pooled Property
SECTION 2.1 Agreement to Purchase Receivables . . . . . . . . . . . . .2
SECTION 2.2 Conveyance of Fixed Value Payments. . . . . . . . . . . . .3
SECTION 2.3 Addition of Sellers . . . . . . . . . . . . . . . . . . . .3
SECTION 2.4 Warranties as to Each Receivable. . . . . . . . . . . . . .3
SECTION 2.5 Warranties as to the Receivables in the Aggregate
and Actions of the Seller. . . . . . . . . . . . . . . .6
SECTION 2.6 Repurchase Upon Breach. . . . . . . . . . . . . . . . . . .7
SECTION 2.7 Custody of Receivable Files . . . . . . . . . . . . . . . .8
SECTION 2.8 Duties of Servicer as Custodian . . . . . . . . . . . . . .9
SECTION 2.9 Instructions; Authority to Act. . . . . . . . . . . . . . .9
SECTION 2.10 Custodian's Indemnification . . . . . . . . . . . . . . . 10
SECTION 2.11 Effective Period and Termination. . . . . . . . . . . . . 10
ARTICLE III
Conditions Precedent
SECTION 3.1 Conditions Precedent to the Effectiveness of this
Short Term Retail PSA. . . . . . . . . . . . . . . . . 10
SECTION 3.2 Conditions Precedent to Addition of a Seller. . . . . . . 12
SECTION 3.3 Conditions Precedent to Transfer of Receivables . . . . . 13
ARTICLE IV
Administration and Servicing of the Pooled Property
SECTION 4.1 Duties of Servicer; Delegations . . . . . . . . . . . . . 15
SECTION 4.2 Collection and Allocation of Receivable Payments. . . . . 16
SECTION 4.3 Realization Upon Receivables. . . . . . . . . . . . . . . 17
SECTION 4.4 Physical Damage Insurance . . . . . . . . . . . . . . . . 17
SECTION 4.5 Maintenance of Security Interests in Financed
Vehicles . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.6 Covenants of Servicer . . . . . . . . . . . . . . . . . . 17
SECTION 4.7 Purchase by Servicer Upon Breach. . . . . . . . . . . . . 18
SECTION 4.8 Servicing Compensation; Servicer Expenses . . . . . . . . 18
SECTION 4.9 Servicer's Certificate. . . . . . . . . . . . . . . . . . 19
SECTION 4.10 Quarterly and Annual Statements as to Compliance;
Notice of Service Default. . . . . . . . . . . . . . . 19
SECTION 4.11 Independent Certified Public Accountant's Reports . . . . 20
SECTION 4.12 Access to Certain Documentation and Information
Regarding Receivables; Required Purchaser's Right
to Request an Audit. . . . . . . . . . . . . . . . . . 20
SECTION 4.13 Annual Opinion of Counsel . . . . . . . . . . . . . . . . 21
ARTICLE V
Distributions
SECTION 5.1 Establishment of Bank Accounts. . . . . . . . . . . . . . 21
SECTION 5.2 Collections . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.3 Application of Collections. . . . . . . . . . . . . . . . 23
SECTION 5.4 Advances. . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5 Additional Deposits . . . . . . . . . . . . . . . . . . . 24
SECTION 5.6 Distributions . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.7 Subordination; Reserve Account. . . . . . . . . . . . . . 27
SECTION 5.8 Interest Rate Cap Agreements. . . . . . . . . . . . . . . 28
ARTICLE VI
The Certificates; Transfers of Purchase Commitments
SECTION 6.1 The Certificates. . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.2 Mutilated, Destroyed, Lost or Stolen Certificates . . . . 29
SECTION 6.3 Transfer and Exchange of Certificates . . . . . . . . . . 29
SECTION 6.4 Persons Deemed Owners . . . . . . . . . . . . . . . . . . 30
ARTICLE VII
The Seller
SECTION 7.1 Representations, Warranties and Covenants of the
Sellers. . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.2 Liability of Seller; Indemnities. . . . . . . . . . . . . 33
SECTION 7.3 Limitation on Liability of Seller and Others. . . . . . . 34
ARTICLE VIII
The Servicer; CCC
SECTION 8.1 Representations and Warranties of Servicer. . . . . . . . 34
SECTION 8.2 Liability of Servicer; Indemnities. . . . . . . . . . . . 35
SECTION 8.3 Limitation on Liability of Servicer and Others. . . . . . 36
SECTION 8.4 Resignations. . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE IX
Service Defaults
SECTION 9.1 Service Defaults. . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.2 Administrative Agent to Act; Appointment of Successor
Servicer . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.3 Effect of Servicing Transfer. . . . . . . . . . . . . . . 40
SECTION 9.4 Notification to Certificateholders. . . . . . . . . . . . 40
ARTICLE X
Termination
SECTION 10.1 Termination of this Short Term Retail PSA . . . . . . . . 40
SECTION 10.2 Repurchases of Pooled Property. . . . . . . . . . . . . . 41
SECTION 10.3 Sale of Pooled Property . . . . . . . . . . . . . . . . . 42
ARTICLE XI
Miscellaneous
SECTION 11.1 Protection of Rights in Pooled Property . . . . . . . . . 43
SECTION 11.2 Limitation on Rights of Certificateholders. . . . . . . . 44
SECTION 11.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.4 Payment of Expenses; Indemnity. . . . . . . . . . . . . . 49
SECTION 11.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.7 Severability of Provisions. . . . . . . . . . . . . . . . 49
SECTION 11.8 Intention of Parties. . . . . . . . . . . . . . . . . . . 49
SECTION 11.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.10 Survival of Representations and Warranties. . . . . . . . 50
SECTION 11.11 No Petition . . . . . . . . . . . . . . . . . . . . . . . 51
ANNEXES
Annex 1 Schedule of Definitions
SCHEDULES
Schedule I Standard Receivables
Schedule II Fixed Value Receivables
Schedule III Location of Receivable Files
Schedule IV Lien Search and UCC Filing Jurisdictions
Schedule V Consents
EXHIBITS
Exhibit A Form of Senior Certificate
Exhibit B Form of Subordinated Certificate
Exhibit C Form of Servicer's Certificate
Exhibit D Form of Purchase Agreement
Exhibit E Form of Closing Opinion
Exhibit F Form of Assignment
Exhibit G Form of Seller Subordinated Note
Exhibit H Form of Additional Seller Supplement
Exhibit I Form of Senior Certificate Supplement
Exhibit J Form of Schedule of Anticipated Collections
<PAGE>
THIS SHORT TERM PARTICIPATION AND SERVICING AGREEMENT dated as of
May 23, 1994 among CHRYSLER CREDIT CORPORATION, a Delaware corporation
("CCC"), the banks and other financial institutions parties hereto from
time to time (the "Purchasers"), AMERICAN AUTO RECEIVABLES COMPANY, a
Delaware corporation (the "Initial Seller"), each special purpose
subsidiary of CFC from time to time party hereto in its capacity as seller
of undivided interests in Receivables represented by Senior Certificates
(each, including the Initial Seller, in such capacity, a "Seller") and
CHEMICAL BANK, a New York banking corporation ("Chemical"), as agent for
the Purchasers (in such capacity, the "Agent") and as administrative agent
for the Purchasers and the Seller as the holder of the Subordinated
Certificate referred to below (in such capacity, the "Administrative
Agent").
In consideration of the premises and of the mutual agreements
herein contained, and other good and valuable consideration, the receipt of
which is acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Definitions. Except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings specified in the Schedule
of Definitions annexed hereto as Annex 1.
SECTION 1.2 Usage of Terms. With respect to all terms used in
this Short Term Retail PSA, the singular includes the plural and the plural
the singular; words importing any gender include the other genders;
references to "writing" include printing, typing, lithography, and other
means of reproducing words in a visible form; references to agreements and
other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and
not prohibited by this Short Term Retail PSA; references to Persons include
their permitted successors and assigns; and the terms "include" or
"including" mean "include without limitation" or "including without
limitation."
SECTION 1.3 Calculations. All calculations of the amount of
interest accrued on the Certificates during any Collection Period shall be
made, in the case of interest accruing at the LIBO Rate, on the basis of a
360-day year for the actual days elapsed and, in the case of interest
accruing at the Base Rate, on the basis of a 365/6 day year for the actual
days elapsed. Interest on the Certificates distributable on a Distribution
Date shall accrue for the Accrual Period to which such Distribution Date
relates.
SECTION 1.4 References. All references to the Record Date prior
to the first Record Date following the initial Purchase shall be to the
initial Transfer Date. All references to the last day of a Collection
Period shall refer to the close of business on such day. All references
herein to the close of business shall mean the close of business, New York
City time. The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Short Term Retail PSA shall refer to this
Short Term Retail PSA as a whole and not to any particular provision of
this Short Term Retail PSA, and Section, Schedule and Exhibit references
are to this Short Term Retail PSA unless otherwise specified.
ARTICLE II
Purchase and Sale of Certificates; Pooled Property
SECTION 2.1 Agreement to Purchase Receivables. (a) Subject to
the terms and conditions set forth herein, on any date during the period
from the Effective Date to the earlier of the Short Term Commitment
Termination Date and the Retail Commitment Termination Date, each Purchaser
severally agrees to purchase on each Transfer Date (each such purchase, a
"Purchase") for a purchase price equal to the product of such Purchaser's
Commitment Percentage and the Purchase Price of the Receivables being
transferred on such date, an undivided participating interest in the
following, and the Active Seller does hereby agree to sell, transfer,
assign, set over and otherwise convey to the Purchasers an undivided
participating interest in the following on the related Transfer Date
(subject to the obligations herein):
(i) all right, title and interest of the Seller in and to the
Receivables Group, and all moneys due thereon, after the related
Cutoff Date, in the case of Precomputed Receivables, and all moneys
received thereon, after the related Cutoff Date, in the case of Simple
Interest Receivables;
(ii) the interest of the Seller in the security interests granted
by Obligors in the Financed Vehicles included in the Receivables Group
and any other interest of the Seller in such Financed Vehicles;
(iii) the interest of the Seller in any proceeds with respect to
the Receivables Group from claims on any physical damage, credit life
or disability insurance policies covering Financed Vehicles or
Obligors;
(iv) the interest of the Seller in any proceeds with respect to
the Receivables Group from recourse to the 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) on the initial Transfer Date with respect to such Seller,
all right, title and interest of such Seller in and to the Purchase
Agreement, including the right of the Seller to cause CFC to
repurchase Standard Receivables or Fixed Value Receivables from the
Seller under certain circumstances;
(vi) on the initial Transfer Date with respect to such Seller,
all right, title and interest of such Seller in all funds on deposit
from time to time in the Trust Accounts, including the Reserve Account
Deposit, and in all investments and proceeds thereof (including all
income thereon); and
(vii) the proceeds of any and all of the foregoing.
(b) The Purchasers shall not make any Purchase on any Transfer
Date if:
(i) the related Purchase Price is less than $50,000,000; or
(ii) after giving effect to the Purchase, the Aggregate Invested
Amount would exceed the Aggregate Commitment (determined as of the
date notice of such Purchase is given).
SECTION 2.2 Conveyance of Fixed Value Payments. Promptly
following the transfer to the Purchasers of the Receivables Group on each
Transfer Date, each Purchaser shall, severally and without further action,
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 such Purchaser 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
5.3(b).
SECTION 2.3 Addition of Sellers. Subject to the terms and
conditions hereof, from time to time a special purpose subsidiary of CFC
may become an additional Seller party hereto by executing an Additional
Seller Supplement. From and after the Seller Addition Date with respect to
each additional Seller through but excluding the next succeeding Seller
Addition Date, all Purchases shall be made with the Active Seller.
SECTION 2.4 Warranties as to Each Receivable. On each Transfer
Date, the Active Seller hereby makes the following warranties as to each
Receivable and the Related Property transferred on such date, on which the
Agent, the Administrative Agent and each Purchaser shall rely in accepting
such Receivable and such Related Property transferred on such date.
(a) Individual Characteristics of the Receivables. Each
Receivable and, where applicable, the related Contract (i) has been
originated in the United States of America by a Dealer in a retail
sale of a Financed Vehicle in the ordinary course of such Dealer's
business, has been fully and properly executed by the parties thereto,
has been validly assigned to CCC by such Dealer and by CCC to CFC and
has been purchased by, and validly assigned to, the Active Seller from
CFC and has been validly sold, transferred and assigned by the Active
Seller to the Purchasers in accordance with its terms and the terms of
the Purchase Agreement and this Short Term Retail PSA, (ii) is secured
by a perfected, valid, subsisting and enforceable first priority
security interest in favor of CCC in the related Financed Vehicle,
which security interest is assignable, and has been so assigned, by
CCC to CFC, by CFC to the Active Seller and by the Active Seller to
the Administrative Agent for the benefit of the Purchasers,
(iii) contains customary and enforceable provisions such that the
rights and remedies of the holder of such security interest are
adequate for realization against the collateral of the benefits of the
security, (iv) provides for level monthly payments which fully
amortize the Amount Financed over the original term (except for the
last payment of any Fixed Value Receivable) and provides for interest
at the related APR set forth in such related Contract and (v) has a
next Scheduled Payment not more than one month after the related
Cutoff Date.
(b) Schedule of Contracts; Calculations. The information set
forth in the supplements to Schedules I and II setting forth the
Standard Receivables and Fixed Value Receivables transferred by the
Active Seller on such date is true and correct as of the close of
business on the related Cutoff Date. The Principal Balance of each
Receivable has been accurately and correctly calculated.
(c) Compliance with Law. Each Contract with respect to any
Receivable and the sale of the related Financed Vehicle complied at
the time it was originated or made, and complies as of the date such
warranty is made, in all material respects with all requirements of
applicable federal, state, and local laws, and regulations thereunder,
including usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the Magnuson-Moss Warranty Act, Federal Reserve
Board Regulations B, AA and Z, state adaptations of the National
Consumer Act and of the Uniform Consumer Act and of the Uniform
Consumer Credit Code, and any other consumer credit, equal opportunity
and disclosure laws.
(d) Binding Obligation. Each Contract with respect to any
Receivable constitutes the genuine, legal, valid, and binding payment
obligation in writing of the Obligor, enforceable in accordance with
its terms.
(e) Contracts in Force. No Contract with respect to any
Receivable has been satisfied, subordinated, or rescinded, and the
Financed Vehicle has not been released from the Lien granted by such
Contract in whole or in part.
(f) No Amendment or Waiver. No provision of any Contract with
respect to any Receivable has been amended, waived, altered or
modified in any respect, except pursuant to a document, instrument or
written notation included in the Receivable File and no such amendment
or waiver causes such Contract not to conform to the other warranties
contained in this Section.
(g) No Defenses. No Contract with respect to any Receivable is
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and the operation of any of the terms
of such Contract, or the exercise of any right thereunder, will not
render such Contract unenforceable in whole or in part or subject to
any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto.
(h) No Liens. There are no liens or claims, including liens for
work, labor or materials relating to, or the storage of, the Financed
Vehicle, that are liens prior or equal to, the Lien granted by the
Contract with respect to any Receivable.
(i) No Default. Except for delinquent payments of not more than
90 days on any Contract, (i) no default, breach, violation, or event
permitting acceleration under the terms of a Contract with respect to
any Receivable exists, (ii) no continuing condition that with notice
or lapse of time, or both, would constitute a default, breach,
violation, or event permitting acceleration under the terms of a
Contract with respect to any Receivable has arisen and (iii) the
Active Seller has not waived any of the foregoing.
(j) Insurance. As of the execution of the Contract with respect
to any Receivable, a physical damage insurance policy covering the
Financed Vehicle securing such Receivable was in full force and
effect, in accordance with the Servicer's customary servicing
procedures.
(k) Valid Transfer. No Receivable has been sold, assigned,
pledged or otherwise conveyed by the Active Seller to any Person other
than the Purchasers pursuant hereto, and, immediately prior to the
transfer and assignment herein contemplated, the Active Seller had
good title to each Receivable free and clear of any Lien or other
right or interest of any other Person, was the sole owner thereof and
had full right and power to transfer and assign such Receivable to the
Purchasers. This Short Term Retail PSA constitutes a valid sale,
transfer and assignment to the Purchasers of all right, title and
interest of the Active Seller in and to the Receivables and all
proceeds (as defined in the UCC in effect in the State of New York)
thereof (other than the right, title and interest thereof which will
be retained by the Active Seller and evidenced by the Subordinated
Certificate), free and clear of any Lien or other right or interest of
any other Person.
(l) Lawful Assignment. No Receivable has been originated in or
is subject to the laws of any jurisdiction under which the sale,
transfer and assignment of such Receivable hereunder, or pursuant to
any issuance or transfer of the Senior Certificates, is unlawful,
void, or voidable.
(m) All Filings Made. All filings, including UCC filings,
necessary in any jurisdiction to give the Administrative Agent for the
benefit of the Purchasers a first priority perfected ownership
interest in each Receivable and the Related Property have been made
and Schedule IV sets forth the only locations where UCC filings are to
be made to give such a first priority perfected ownership interest.
(n) Valid Security Interest. On such Transfer Date, there shall
exist a valid, subsisting and enforceable first priority perfected
security interest in the Financed Vehicle securing the Receivable
related to such Financed Vehicle (subject to any statutory lien
arising by operation of law after such date which is prior to such
security interest) and, at such time as enforcement of such security
interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in the Financed
Vehicle in favor of the Administrative Agent for the benefit of the
Purchasers (subject to any statutory lien arising by operation of law
after such date which is prior to such interest).
(o) Capacity of Parties. All parties to each Contract with
respect to any Receivable had capacity to execute such Contract.
(p) Obligations; No Impairment. Each of the Active Seller, CCC,
CFC and the Dealer party to a Contract with respect to any Receivable
has duly fulfilled all obligations on its part to be fulfilled under,
or in connection with, such Contract and has done nothing to impair
the rights of the Agent, the Administrative Agent or any Purchaser in
such Contract or the proceeds thereof.
(q) No Fraud or Misrepresentation. No Contract with respect to
any Receivable was originated by a Dealer and sold by such Dealer to
CCC, by CCC to CFC, and by CFC to the Active Seller with any conduct
constituting fraud or misrepresentation on the part of such Person.
(r) Possession; One Original. For each Contract with respect to
any Receivable, there is only one original executed Contract, which on
such date will, together with the related Receivable File, be conveyed
hereunder by the Active Seller to the Purchasers and, pursuant to this
Short Term Retail PSA, will be held by the Servicer as bailee of the
Administrative Agent and the Purchasers. No other custodial
agreements are in effect other than as contemplated by the Purchase
Agreement.
(s) Bulk Transfer Laws. The transfer, assignment and conveyance
of each Receivable and the related Receivable File by the Active
Seller pursuant to this Short Term Retail PSA is not subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
SECTION 2.5 Warranties as to the Receivables in the Aggregate
and Actions of the Seller. On each Transfer Date, the Active Seller
warrants that:
(a) Aggregate Principal Balance. The aggregate Principal
Balance of the Receivables Group transferred on such date is
accurately set forth in the related Assignment. The information set
forth in the Schedule of Anticipated Collections with respect to the
Receivables Group transferred on such date is true and accurate as of
the close of business on the related Cutoff Date.
(b) Additional Characteristics of the Receivables. The
Contracts with respect to any Receivable being transferred on such
date have the following characteristics: (i) each Contract had an
original maturity of not more than 73 months and a remaining maturity
of not more than 65 months; (ii) the final scheduled payment date on
each Contract is no later than the Scheduled Maturity Date; (iii) each
Contract had a remaining gross balance of not less than $1,000; (iv)
no Contract was more than 90 days past due as of the related Cutoff
Date; (v) no Financed Vehicle had been repossessed, without
reinstatement of the related Contract, as of the related Cutoff Date;
(vi) no Obligor on any Contract was the subject of a bankruptcy
proceeding as of the related Cutoff Date; (vii) the Obligor on each
Contract is not the United States of America or any State or any
agency, department or instrumentality of any of the foregoing; (viii)
each Contract is covered by insurance in accordance with CCC's
customary servicing procedures; and (ix) with respect to the
Receivables Group transferred on such date, the aggregate Principal
Balance of the Receivables with respect to such Receivables Group
which are financed at CCC's used vehicle rate is not more than 50% of
the aggregate Principal Balance of all the Receivables with respect to
such Receivables Group.
(c) Selection Criteria. The Receivables purchased from CFC were
selected from among the receivables in CFC's portfolio that met the
criteria set forth in Sections 2.4 and 2.5(b) utilizing selection
procedures that were not adverse to the Purchasers.
(d) Computer Tape. The Computer Tape as prepared by the
Servicer and made available by the Seller on such date was complete
and accurate as of the related Cutoff Date and includes a description
of the same Receivables that are described in the supplements to
Schedules I and II, as delivered by the Active Seller by such date.
(e) Marking Records. By such Transfer Date, the Active Seller
has caused the Servicer to mark clearly and unambiguously the portions
of any electronic ledger relating to the Receivables transferred on
such date to show that such Receivables constitute part of the Pooled
Property and are owned by the Certificateholders in accordance with
the terms of this Short Term Retail PSA.
(f) Receivable File. Each document or instrument described in
paragraphs (a) through (d) of Section 2.7 as part of a Receivable File
is contained in each such Receivable File on such date.
(g) No Assignment. The Active Seller has not taken any action
to convey any right to any Person that would result in such Person
having a right to payments received under the Insurance Policies or
payments due in respect of the Receivables transferred on such date.
SECTION 2.6 Repurchase Upon Breach. Each Seller and the
Servicer shall inform each such other Person and each of the Agent and the
Administrative Agent promptly in writing upon the discovery of any breach
by such Seller of the warranties made by such Seller pursuant to Sections
2.4 or 2.5 and the Administrative Agent shall promptly transmit a copy of
such writing to the Purchasers. Unless the breach shall have been cured by
the second Determination Date immediately succeeding the date on which such
Seller becomes aware of, or is informed in writing of, such breach, such
Seller shall repurchase any Receivable materially and adversely affected by
any such breach as of such Determination Date; provided that in the event
of a breach with respect to any Receivable of a warranty made by such
Seller pursuant to Sections 2.4(h), 2.4(k) or 2.4(n), such Seller shall
repurchase such Receivable on the next succeeding Determination Date, but
only to the extent that it has become aware of or been informed in writing
of such breach by such time. In consideration of the repurchase of a
Receivable hereunder, the related Seller shall remit the Repurchase Amount
of such Receivable, no later than the close of business on the date
determined according to the preceding sentence and in the manner specified
in Section 5.5. Except with respect to the representation and warranty set
forth in Section 2.4(c), the sole remedy of the Agent, the Administrative
Agent or any Purchaser with respect to a breach of the warranties made by
any Seller pursuant to Sections 2.4 or 2.5 shall be to require such Seller
to repurchase Receivables pursuant to this Section 2.6.
SECTION 2.7 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs,
the Administrative Agent, the Agent and each Certificateholder, upon such
Person's execution and delivery of this Short Term Retail PSA, revocably
appoints the Servicer as agent, and the Servicer as agent for each such
Person accepts such appointment, to act as custodian on behalf of each such
Person of the following documents or instruments with respect to the
Receivables transferred on any Transfer Date (collectively, a "Receivable
File"), which will as of such Transfer Date be constructively delivered to
the Administrative Agent on behalf of the Certificateholders:
(a) the original Contracts in respect of the Standard
Receivables and Fixed Value Receivables transferred on such date;
(b) the original credit applications, in respect of such
Receivables, fully executed by the respective Obligors;
(c) the original certificates of title or such documents that
CCC or CFC shall keep on file, in accordance with its customary
procedures, evidencing the security interest of CFC in the Financed
Vehicles which secure such Receivables; and
(d) any and all other documents that CCC or the Active Seller
shall keep on file, in accordance with its customary procedures,
relating to the Standard Receivables or Fixed Value Receivables, the
Obligors or the Financed Vehicles.
Neither the Agent nor the Administrative Agent shall be obligated
to review any Receivable File to determine that each item referred to in
this Section 2.7 is contained therein.
SECTION 2.8 Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer, in its capacity as custodian, shall hold the Receivable Files
on behalf of the Administrative Agent for the benefit of all present and
future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable as
shall enable the Servicer, the Agent and the Administrative Agent to comply
with the terms and provisions of this Short Term Retail PSA applicable to
it. In performing its duties as custodian hereunder, 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 Short Term Retail PSA
and of the related accounts, records and computer systems, in such a manner
as shall enable the Administrative Agent to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the
Administrative Agent any failure on its part to hold the Receivable Files
and maintain its accounts, records and computer systems as herein provided
and 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 Administrative Agent or the Agent 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 3
to this Short Term Retail PSA or at such other office as shall be specified
to the Administrative Agent and the Agent by written notice, which notice
shall state any change in such location and shall be received on or prior
to the date on which such location is changed. The Servicer shall make
available to the Administrative Agent and the Agent 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 as the Administrative
Agent or the Agent shall instruct.
(c) Release of Documents. Upon written instructions from the
Administrative Agent, the Servicer shall release any Receivable File to the
Administrative Agent or its respective agents or designees at such place or
places as the Administrative Agent may designate, as soon thereafter as is
practicable.
(d) Title to Receivables. The Servicer agrees that, in respect
of any Receivable held by the Servicer as custodian hereunder, the Servicer
will not at any time have or in any way attempt to assert any interest in
such Receivable or the related Receivable File, except that the Servicer
may assert an interest in such Receivable solely for the purpose of
collecting or enforcing the Receivable for the benefit of the
Administrative Agent and the Certificateholders. The entire equitable
interest in such Receivable and the related Receivable File shall at all
times be vested in the Certificateholders.
SECTION 2.9 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 an
assistant vice president or vice president of the Administrative Agent.
SECTION 2.10 Custodian's Indemnification. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Agent, the
Administrative Agent and each Purchaser from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever (including, without limitation, fees and
expenses of counsel and expenses of litigation) that may be imposed on,
incurred, or asserted against such Person as the result of any act or
omission by the Servicer relating to the maintenance and custody of the
Receivable Files; provided that the Servicer shall not be liable to any
Person hereunder to the extent, but only the extent, that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
result from the willful misfeasance, bad faith, or gross negligence of such
Person.
SECTION 2.11 Effective Period and Termination. The Servicer's
appointment as custodian shall be deemed to be effective as of the initial
Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section 2.11. If CCC shall resign as Servicer under
Section 8.4 or if all of the rights and obligations of CCC, as Servicer,
shall have been terminated under Section 9.1, the appointment of the
Servicer as custodian hereunder shall be deemed terminated by the
Administrative Agent and the Certificateholders on the effective date of
such resignation or termination pursuant to Sections 8.4 or 9.1,
respectively. As soon as practicable after any such termination, the
Servicer shall deliver or cause to be delivered the Receivable Files to the
Administrative Agent or its agent or designee at such place or places as
the Administrative Agent shall designate.
ARTICLE III
Conditions Precedent
SECTION 3.1 Conditions Precedent to the Effectiveness of this
Short Term Retail PSA. This Short Term Retail PSA shall become effective
on the date (the "Effective Date") that the Agent shall have received the
following:
(a) (i) This Short Term Retail PSA, duly executed and delivered
by the Initial Seller, the Servicer, the Administrative Agent and the
Agent and (ii) from each of the Persons listed on Schedule I to the
Short Term RPA, an executed Addendum;
(b) (i) For each Purchaser, a Senior Certificate conforming to
the requirements hereof and (ii) for the Initial Seller, a
Subordinated Certificate, in each case duly executed by the Initial
Seller;
(c) A copy of the Purchase Agreement between CFC and the Initial
Seller, duly executed and delivered by CFC and the Initial Seller;
(d) Copies of any certificates and opinions of counsel, in each
case also addressed to the Agent, the Administrative Agent and the
Purchasers, delivered under the Purchase Agreement;
(e) A certificate of a Responsible Officer of the Initial Seller
stating that the Purchase Agreement is in full force and effect and
all conditions precedent set forth therein have been satisfied (other
than any condition requiring that this Short Term Retail PSA be in
full force and effect);
(f) A certificate of the Secretary or an Assistant Secretary of
each of the Initial Seller, CFC and the Servicer certifying the names
and true signatures of the officers authorized on its behalf to sign
this Short Term Retail PSA, the Certificates (in the case of the
Initial Seller) and the other documents to be delivered by such Person
hereunder;
(g) A certificate of a Responsible Officer of the Initial Seller
stating that (i) duly executed proper UCC financing statements (Form
UCC-1), naming the Initial Seller as the seller with respect to the
Pooled Property and the Administrative Agent as the buyer with respect
thereto, have been properly filed in the appropriate filing offices in
the jurisdictions listed on Schedule IV or (ii) other similar
instruments or documents as may be necessary or in the opinion of the
Agent and its counsel desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests
in the Pooled Property have been so filed;
(h) A certificate of a Responsible Officer of CFC stating that
(i) duly executed proper UCC financing statements (Form UCC-1), naming
(A) each Dealer as the seller and CCC as the buyer, (B) CCC as the
seller and CFC as the buyer and (C) CFC as the seller and the Initial
Seller as the buyer, in each case with respect to the Receivables and
the other Transferred Property transferred (or to be transferred)
under and as defined in the Purchase Agreement, have been properly
filed in the appropriate filing offices in the jurisdictions listed on
Schedule 3 thereto or (ii) other similar instruments or documents as
may be necessary or in the opinion of the Agent desirable under the
UCC of all appropriate jurisdictions or any comparable law to perfect
the ownership interests in the Receivables and such other Transferred
Property have been so filed; and
(i) Results of a recent Lien, tax and judgment search from (1)
the jurisdictions listed on Schedule IV conducted by counsel to the
Initial Seller with respect to the Pooled Property and (2) the
jurisdictions listed on Schedule 3 to the Purchase Agreement conducted
by counsel to CFC with respect to the Transferred Property, each of
which shall reveal no Liens or other encumbrances on the Pooled
Property or the Transferred Property, as the case may be.
(j) An Opinion of counsel to CFC, the Initial Seller and the
Servicer, addressed to the Agent, the Administrative Agent and each
Purchaser and substantially in the appropriate forms of Exhibit E
hereto and as to such other matters as the Agent or the Purchasers may
reasonably request.
(k) A certificate of a Responsible Officer of CFC and CCC
stating that the transfer of motor vehicle retail installment sales
contracts and the other property transferred under the CFC-CCC
Agreement (i) have been appropriately recorded on the books and
records of each of CCC and CFC and (ii) have been made in accordance
with the terms and conditions of the CFC-CCC Agreement.
SECTION 3.2 Conditions Precedent to Addition of a Seller. A
special purpose subsidiary of CFC shall become the Active Seller on the
date (with respect to such Active Seller, the "Seller Addition Date") that
the Agent shall have received the following:
(a) An Additional Seller Supplement, duly executed and delivered
by the Servicer, such Active Seller, the previous Sellers, the Agent
and the Administrative Agent;
(b) A Senior Certificate Supplement to each Senior Certificate,
duly executed and delivered by such Active Seller;
(c) A copy of a supplement to the Purchase Agreement,
substantially in the form of Exhibit B thereto, duly executed and
delivered by CFC and such Active Seller;
(d) A copy of the resolutions adopted by the Board of Directors
of each of CFC, CCC, such Active Seller and the previous Sellers
authorizing the execution and delivery of the Additional Seller
Supplement (and, in the case of such Active Seller, each Senior
Certificate Supplement) and any other documents to be delivered by
such Person hereunder, the performance of this Short Term Retail PSA
as supplemented by the Additional Seller Supplement and the
transactions contemplated hereby, including, in the case of such
Active Seller, the transfer of a first priority perfected ownership
interest, in favor of the Administrative Agent for the benefit of the
Purchasers, in the Receivables Group transferred on such date,
certified by the Secretary or Assistant Secretary of such Person;
(e) An updated Schedule IV and a certificate of such Active
Seller that (i) duly executed proper UCC financing statements (Form
UCC-1), naming such Active Seller as the seller with respect to the
Pooled Property and the Administrative Agent as the buyer with respect
thereto, have been properly filed in the appropriate filing offices in
all appropriate jurisdictions listed on Schedule IV or (ii) other
similar instruments or documents as may be necessary or in the opinion
of the Agent and its counsel desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the
ownership interests in the Pooled Property have been so filed;
(f) A certificate of CFC that (i) duly executed proper UCC
financing statements (Form UCC-1), naming (A) each Dealer as the
seller and CCC as the buyer, (B) CCC as the seller and CFC as the
buyer and (C) CFC as the seller and such Active Seller as the buyer,
in each case with respect to the Receivables and the other Transferred
Property transferred under and as defined in the Purchase Agreement as
supplemented, have been properly filed in the appropriate filing
offices in the jurisdictions listed on Schedule 3 thereto or (ii)
other similar instruments or documents as may be necessary or in the
opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests
in the Receivables and such other Transferred Property have been so
filed;
(g) Results of a recent Lien, tax and judgment search from (1)
the jurisdictions in which UCC financing statements are filed pursuant
to clause (e) above conducted by counsel to such Active Seller with
respect to the Pooled Property and (2) the jurisdictions listed on
Schedule 3 to the Purchase Agreement conducted by counsel to CFC with
respect to the Transferred Property, each of which shall reveal no
Liens or other encumbrances on the Pooled Property or the Transferred
Property, as the case may be;
(h) From each of such Active Seller, the Servicer and CFC, an
Officer's Certificate of such Person certifying that the
representations and warranties made by such Person in this Short Term
Retail PSA and any other agreements delivered by such Person in
connection herewith are true and correct on and as of such Seller
Addition Date as though made on and as of such date;
(i) An Opinion of counsel to CFC, such Active Seller and the
Servicer, addressed to the Agent, the Administrative Agent and each
Purchaser and substantially in the appropriate forms of Exhibit E
hereto and as to such other matters as the Agent or the Purchasers may
reasonably request.
SECTION 3.3 Conditions Precedent to Transfer of Receivables.
The agreement of the Purchasers to make a Purchase on any Transfer Date
(including, without limitation, the initial Transfer Date) is subject to
the condition that the Agent shall have received the following on or prior
to such Transfer Date:
(a) An Addition Notice;
(b) A written assignment, duly executed and delivered by the
Active Seller, in substantially the form of Exhibit F (the
"Assignment"), which shall include supplements to Schedules I or II,
as applicable, listing the Receivables transferred on such date;
(c) A certificate of a Responsible Officer of the Active Seller
stating that pursuant to Section 5.2, the Active Seller has deposited
in the Collection Account all collections in respect of the
Receivables transferred on such date;
(d) A certificate of a Responsible Officer of the Seller stating
that as of such Transfer Date, neither CFC nor the Active Seller is
insolvent nor will either of them be made insolvent by such transfer
nor is any of them aware of any pending insolvency;
(e) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has taken actions required to maintain
the first priority perfected ownership interest of the Purchasers in
the Pooled Property;
(f) A certificate of a Responsible Officer of the Active Seller
stating that no selection procedures believed by the Active Seller to
be adverse to the interests of the Purchasers have been utilized in
selecting the Receivables transferred on such date;
(g) A certificate of a Responsible Officer of the Active Seller
stating that no Receivables transferred on such date consist of
Standard Receivables or Fixed Value Receivables originated in the
State of Pennsylvania, unless the Agent shall have received a
favorable Opinion of Counsel, in form and substance satisfactory to
the Agent with respect to the application of the Pennsylvania Motor
Vehicle Sale Finance Act to such Receivables and such other related
matters as may be appropriate in connection therewith;
(h) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has caused the Servicer to mark the
electronic ledger in accordance with Section 2.5(e);
(i) From each of the Active Seller and the Servicer an Officer's
Certificate that the following statements with respect to such Person
are true and correct:
(i) The representations and warranties made by such Person
in this Short Term Retail PSA and any other agreements delivered
by such Person in connection herewith are true and correct on and
as of such Transfer Date as though made on and as of such date,
and
(ii) The information set forth in each document delivered by
or on behalf of such Person describing the Receivables Group
transferred on such date, including, without limitation, the
information set forth on the Schedule of Anticipated Collections
with respect to such Receivables Group, is true and correct,
which Schedule shall be attached to such certificate;
(j) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has deposited into the Reserve Account,
in immediately available funds, the difference, if any, between the
Minimum Reserve Account Balance (after giving effect to the
Receivables transferred on such date) and the Specified Reserve
Account Balance;
(k) Payment of any fees required to be paid to the Agent, the
Administrative Agent or the Purchasers on such Transfer Date;
(l) A certificate of a Responsible Officer of the Active Seller
stating that (i) the Short Term RPA is in full force and effect and
all conditions precedent set forth therein with respect to such
Purchase have been satisfied (other than any condition requiring that
the conditions precedent set forth in this Short Term Retail PSA be
satisfied) and (ii) the Purchase Agreement is in full force and effect
and all conditions precedent set forth therein with respect to such
Purchase have been satisfied (other than any condition requiring that
the conditions precedent set forth in this Short Term Retail PSA be
satisfied);
(m) If the APR Increment of the Receivables Group transferred on
such Transfer Date is greater than zero, a certificate of a
Responsible Officer of the Active Seller stating that the Active
Seller has deposited the Yield Deposit with respect to such
Receivables Group in the Yield Account; and
(n) A copy of the Interest Rate Cap Agreement transferred as
part of the Pooled Property on such date, which Interest Rate Cap
Agreement (i) shall have an amortizing notional amount equal to the
product of (X) one minus the Subordinated Percentage times (Y) the
amortizing Principal Balance of the Receivables transferred on such
date, as set forth on the Schedule of Anticipated Collections
delivered on such date and (ii) shall have a cap strike price at or
below (A) if the Active Seller shall have made a Yield Deposit in the
Yield Account on such Transfer Date, the Adjusted Weighted Average APR
of the Receivables transferred on such Transfer Date or (B) otherwise,
the weighted average APR of the Receivables transferred on such
Transfer Date.
ARTICLE IV
Administration and Servicing of the Pooled Property
SECTION 4.1 Duties of Servicer; Delegations. (a) The Seller,
the Administrative Agent, the Agent and each Purchaser hereby revocably
appoints CCC as Servicer for the Receivables and the Related Property and
CCC hereby accepts such appointment. The Servicer, as agent for the
Administrative Agent, the Agent and the Certificateholders, shall manage,
service, administer and make collections on the Receivables (other than
Repurchased 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 Administrative Agent, the Agent and the
Certificateholders and making Advances pursuant to Section 5.4. Subject to
the provisions of Section 4.2, 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
Administrative Agent, the Agent and the Certificateholders 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
Certificateholders (in the case of a Receivable other than a Repurchased
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
Required Purchasers shall, on behalf of the Certificateholders and at the
Servicer's expense, take steps to enforce such Receivable, including
bringing suit in the name of the Servicer, the Seller, the Administrative
Agent, the Agent or the Certificateholders. Each of the Agent, the
Administrative Agent and the Certificateholders 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.
(b) In the event of any delegation of servicing authority or the
appointment of any subservicer by the Servicer, and notwithstanding the
provisions of any agreement permitting such subservicing or delegation, the
Servicer shall remain obligated and liable to the Administrative Agent, the
Agent and the Certificateholders for the servicing and administering of the
Receivables and the Related Property in accordance with the provisions of
this Short Term Retail PSA without diminution of such obligation or
liability by virtue of such subservicing or delegation agreements or
arrangements or by virtue of indemnification from a subservicer, to the
same extent and under the same terms and conditions as if the Servicer
alone were servicing and administering the Receivables and the Related
Property.
SECTION 4.2 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 Short Term Retail PSA, 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 Scheduled Maturity Date, it shall promptly
repurchase the Receivable from the Purchasers in accordance with the terms
of Section 4.7. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the original course of
servicing a Receivable. The Servicer shall not agree to any alteration of
the interest rate on any Receivable or of the amount of any Scheduled
Payment on Precomputed Receivables or the originally scheduled payments on
Simple Interest Receivables.
SECTION 4.3 Realization Upon Receivables. The Servicer, on
behalf of the Administrative Agent and the Certificateholders, shall use
its best efforts, consistent with its customary servicing procedures, to
repossess or otherwise acquire the ownership of the Financed Vehicle
securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. To realize upon such Receivables,
the Servicer shall use such procedures as it follows with respect to all
comparable automotive receivables that it services for itself or others,
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 4.4 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 4.5 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 Administrative Agent and the Purchasers in the
event of the relocation of a Financed Vehicle or for any other reason. If
there has been a Service Default (or the occurrence of an event of the type
described in Section 9.1(a)(vi) or (vii) with respect to the Active Seller
if CCC is the Servicer), upon the request of the Required Purchasers, each
of the Servicer and the Sellers, at their expense, shall promptly and duly
execute and deliver such documents and instruments, and take such other
actions as may be necessary, as evidenced by an Opinion of Counsel
delivered to the Administrative Agent (addressed to the Administrative
Agent, the Agent and each Purchaser), to perfect the Administrative Agent's
interest in the Receivables and the Related Property against all other
Persons, including, without limitation, the delivery of the Receivable
Files to the Administrative Agent, its agent or its designee, the
endorsement and delivery of the Insurance Policies or the notification of
the insurers thereunder, the execution of transfer instruments and the
endorsement to the Administrative Agent and the delivery of the
certificates of title to the Financed Vehicles to the appropriate motor
vehicle department (or other appropriate governmental agency).
SECTION 4.6 Covenants of Servicer. The Servicer shall not (a)
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, (b) impair
the rights of the Certificateholders in such Receivables, (c) increase the
number of scheduled payments due under a Standard Receivable or Fixed Value
Receivable and (d) change in any material respect its current credit and
collection policies (including, without limitation, its policy in respect
of the timing of charging off Receivables as uncollectible) so as to have a
material adverse effect on the Purchasers without the prior written consent
of the Required Purchasers.
SECTION 4.7 Purchase by Servicer Upon Breach. The Active Seller
or the Servicer shall inform each such other Person and each of the Agent
and the Administrative Agent promptly in writing upon the discovery of any
breach by the Servicer of its covenants under Sections 4.2, 4.5 or 4.6, and
the Administrative Agent shall give a copy of such writing to the
Purchasers. Unless the breach shall have been cured by the second
Determination Date immediately succeeding the date on which the Servicer
becomes aware of, or is informed in writing of, such breach, the Servicer
shall purchase any Receivable materially and adversely affected by any such
breach as of such Determination Date; provided that in the event of a
breach with respect to any Receivable of a covenant made by the Servicer
pursuant to Section 4.6(a) or 4.6(c), the Servicer shall purchase such
Receivable on the next succeeding Determination Date, but only to the
extent that it has become aware of or been informed in writing of such
breach by such time. If the Servicer takes any action pursuant to Section
4.2 that impairs the rights of the Certificateholders in any Receivable or
as otherwise provided in Section 4.2, the Servicer shall purchase such
Receivable. In consideration of the purchase of any such Receivable
pursuant to either of the two preceding sentences, the Servicer shall remit
the Repurchase Amount in the manner specified in Section 5.5. For purposes
of this Section, the Repurchase 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. The sole remedy of the Agent, the Administrative Agent or the
Certificateholders against the Servicer with respect to a breach pursuant
to Sections 4.2, 4.5 or 4.6 shall be to require the Servicer to purchase
Receivables pursuant to this Section.
SECTION 4.8 Servicing Compensation; Servicer Expenses. (a) The
Servicer shall be entitled to a fee (the "Servicing Fee") with respect to
an Accrual Period which shall be an amount equal to the product of 1/12 of
1% and the Pool Balance on the first day of such Accrual Period. The
Servicing Fee shall be payable to the Servicer monthly in arrears on each
Distribution Date, but only to the extent that funds are available therefor
in accordance with Section 5.6. 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 Receivables, collected (from whatever source) on the
Receivables.
(b) The Servicer shall be required to pay all expenses incurred
by or on behalf of it in connection with its activities hereunder
(including (i) fees, disbursements and expenses of the Administrative Agent
and the Agent (including fees and disbursements of counsel to the
Administrative Agent and the Agent), any custodian appointed by the
Administrative Agent and independent accountants), (ii) taxes imposed on
the Servicer and (iii) expenses incurred in connection with distributions
and reports to the Agent, the Administrative Agent and the
Certificateholders) except expenses incurred in connection with realizing
upon Receivables under Section 4.3.
SECTION 4.9 Servicer's Certificate. On each Determination Date,
the Servicer shall deliver to the Administrative Agent (which shall forward
a copy thereof on the related Distribution Date to each Purchaser) an
Officer's Certificate, substantially in the form of Exhibit C hereto (a
"Servicer's Certificate"), containing all information necessary to make the
distributions and deposits pursuant to Sections 5.6 and 5.7 (including, if
required, withdrawals from or deposits to the Payahead Account and Advances
by the Servicer pursuant to Section 5.4) for the Collection Period
preceding the date of such Servicer's Certificate. 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 Schedules I or II). The Administrative Agent
agrees to furnish the Servicer with information available to the
Administrative Agent necessary to complete the Servicer's Certificate with
respect to the Purchasers and amounts on deposit in the Certificate
Account, the Reserve Account and the Yield Account. Delivery of the
Servicer's Certificate shall constitute a representation and warranty by
the Servicer that the information contained therein is accurate in all
material respects on and as of such Determination Date.
SECTION 4.10 Quarterly and Annual Statements as to Compliance;
Notice of Service Default.
(a) Within 60 days of the end of a calendar quarter ending on
March 31st, June 30th and September 30th of any year, so long as the Senior
Amount was greater than zero at any time during such calendar quarter, the
Servicer shall deliver to the Agent, the Administrative Agent and each
Purchaser of record on the Record Date preceding such required delivery
date an Officer's Certificate, dated as of the last day of such calendar
quarter, stating that (i) a review of the activities of the Servicer during
the preceding calendar quarter and of its performance of its obligations
under this Short Term Retail PSA has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, the Servicer
has fulfilled all its obligations under this Short Term Retail PSA
throughout such quarter, or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to such officer
and the nature and status thereof.
(b) On or before April 30th of each year, so long as the Senior
Amount was greater than zero at any time during such year, the Servicer
shall deliver to the Agent, the Administrative Agent and each Purchaser of
record on the Record Date preceding such required delivery date an
Officer's Certificate, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Servicer during the
preceding calendar year and of its performance of its obligations under
this Short Term Retail PSA has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Short Term Retail PSA
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and
the nature and status thereof.
(c) Promptly upon having knowledge thereof, but in no event
later than five days thereafter, the Servicer shall deliver to the Agent
and the Administrative Agent, which shall promptly transmit a copy thereof
to each Purchaser of record on the preceding Record Date, written notice in
an Officer's Certificate of any event which constitutes or, with the giving
of notice or lapse of time, or both, would constitute or become, a Service
Default under Section 9.1.
SECTION 4.11 Independent Certified Public Accountant's Reports.
The Servicer shall cause a firm of independent certified public accountants
acceptable to the Agent (who may also render other services to CFC, CCC and
the Sellers) to deliver to the Agent and the Administrative Agent, which
shall promptly transmit a copy thereof to each Purchaser of record on the
preceding Record Date, on or before April 30 of each year, so long as the
Senior Amount was greater than zero at any time during such year, a report
addressed to the Board of Directors of the Servicer and to the Agent, the
Administrative Agent and each such Purchaser with respect to the previous
calendar year 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 Short
Term Retail PSA; and (c) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile and light truck
loans serviced for others that, in the firm's opinion, paragraph four of
such Program requires such firm to report.
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; Required Purchaser's Right to Request an Audit. (a)
The Servicer shall provide to the Certificateholders access to the
Receivable Files in such cases where the Certificateholders 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 respective
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.
(b) The Administrative Agent may, at any time during the
Servicer's normal business hours, and shall, at the written direction of
the Required Purchasers, be allowed to audit, or to cause a third party to
audit, the Receivable Files and any other documents or information related
to the Receivables within the Servicer's possession (including, without
limitation, access to any personnel of the Servicer who has responsibility
with respect to the Receivables), which audit shall be for the expense of
the Servicer.
SECTION 4.13 Annual Opinion of Counsel. The Servicer shall
deliver to the Agent and the Administrative Agent, which shall promptly
transmit a copy thereof to each Purchaser of record on the preceding Record
Date, by April 30 of each year, commencing with April 30, 1995, an Opinion
of Counsel, dated as of such date and addressed to the Agent and the
Administrative Agent and the Purchasers, stating that, in the opinion of
the counsel, either (i) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of such Persons in the Pooled Property
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (ii) no such action is
necessary to preserve and protect such interest.
ARTICLE V
Distributions
SECTION 5.1 Establishment of Bank Accounts. (a) On or prior to
the Effective Date the Administrative Agent shall establish with the Agent
an account into which the Servicer shall deposit collections on account of
the Receivables and the Related Property during each Collection Period (the
"Collection Account"). The Collection Account shall be established and
maintained as a segregated trust account in the corporate trust office of
the Agent in the name of the Administrative Agent on behalf of the
Purchasers. The Administrative Agent shall direct the Agent (or other
Person where the Collection Account is then maintained) to invest funds on
deposit in the Collection Account in Eligible Investments as from time to
time are specified by the Administrative Agent which, in any case, shall
mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Collection Account (including net
investment earnings on Eligible Investments) shall be a part of the Pooled
Property.
(b) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which (i) the Servicer shall
transfer collections on account of the Pooled Property on each Deposit
Date, (ii) the Seller and the Servicer shall transfer collections on
account of the Pooled Property and make deposits in respect of their
obligations hereunder and (iii) the Administrative Agent shall deposit
amounts withdrawn from the Reserve Account or the Yield Account pursuant
hereto (the "Certificate Account"). The Certificate Account shall be
established and maintained as a segregated trust account in the corporate
trust department of the Agent in the name of the Administrative Agent on
behalf of the Purchasers. Funds on deposit in the Certificate Account
shall be invested by the Administrative Agent in Eligible Investments which
mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Certificate Account (including net
investment earnings on Eligible Investments) shall be a part of the Pooled
Property.
(c) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which Reallocated Payments
and Reserve Account Deposits may be deposited (the "Reserve Account"). The
Reserve Account shall be established and maintained as a segregated trust
account in the corporate trust office of the Agent in the name of the
Administrative Agent on behalf of the Purchasers. Funds on deposit in the
Reserve Account shall be invested in Eligible Investments which mature not
later than the next succeeding Deposit Date. All monies deposited in or
credited to the Reserve Account (including net investment earnings on
Eligible Investments) shall be part of the Pooled Property.
(d) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which a Seller will, if the
APR Increment is greater than zero with respect to any Transfer Date,
deposit a Yield Deposit on such Transfer Date, which deposit will be used
in calculating the Adjusted Weighted Average APR on such date (the "Yield
Account"). The Yield Account shall be established and maintained as a
segregated trust account in the corporate trust office of the Agent in the
name of the Administrative Agent on behalf of the Purchasers. Funds on
deposit in the Yield Account shall be invested in Eligible Investments
which mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Yield Account (including net investment
earnings on Eligible Investments) shall be part of the Pooled Property.
(e) On or prior to the Effective Date, the Administrative Agent
shall establish with the Agent an account into which the Servicer shall,
in accordance with Section 5.3(a), deposit all Payaheads received in
respect of Precomputed Receivables (the "Payahead Account"; collectively
with the Collection Account, the Certificate Account, the Reserve Account
and the Yield Account, the "Trust Accounts"). The Payahead Account shall
be established and maintained as a segregated trust account in the
corporate trust office of the Agent in the name of the Administrative Agent
on behalf of the Purchasers. Funds on deposit in the Payahead Account
shall be invested in Eligible Investments which mature not later than the
next succeeding Deposit Date. All monies deposited in or credited to the
Payahead Account (including net investment earnings on Eligible
Investments) shall be part of the Pooled Property. If Chemical Bank ceases
to be the Agent, each of the Trust Accounts shall promptly be established
or maintained as a segregated trust account in the name of the
Administrative Agent on behalf of the Purchasers in the corporate trust
office of one or more Eligible Institutions.
SECTION 5.2 Collections. The Servicer shall as promptly as
practicable deposit into the Collection Account (but in no event later than
two Business Days following the receipt thereof) all payments by or on
behalf of the Obligors with respect to the Receivables (other than
Repurchased Receivables and not including Fixed Value Payments) and all
Liquidation Proceeds, both as collected during any Collection Period,
provided, that, with the prior written consent of the Required Purchasers,
so long as no Service Default is continuing and CCC remains the Servicer
hereunder, the Servicer need not make such daily deposits but may make a
single deposit into the Collection Account in same day funds not later than
12:00 noon, New York City time, on the Business Day immediately preceding
the Distribution Date in a net amount equal to the amount which would have
been on deposit with respect to the immediately preceding Collection Period
in the Collection Account. Prior to 3:00 P.M., New York City time, on each
Deposit Date, the Administrative Agent shall remit all such amounts to the
Certificate Account. 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, the Sellers or CFC.
SECTION 5.3 Application of Collections. (a) All collections
for the Collection Period shall be applied by the Servicer as follows (in
the following order of priority):
(i) Repayments of Advances. With respect to each Receivable
(other than a Repurchased Receivable), payments by or on behalf of the
Obligor shall be applied, in the case of Precomputed Receivables, to
reduce Outstanding Precomputed Advances as described in Section 5.4(a)
and, in the case of Simple Interest Receivables, to reduce Outstanding
Simple Interest Advances to the extent described in Section 5.4(b).
(ii) Payments in Respect of Receivables. 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.
(iii) Excess to Payahead Account. 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 5.4 Advances.
(a) Advances on Precomputed Receivables. 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
Precomputed Receivable which has become a Repurchased Receivable in such
Collection Period) shall be less than the Scheduled Payment with respect to
such Precomputed Receivable, the Servicer shall take the following actions
(in the following order of priority):
(i) the Payahead Balance shall be applied by the Servicer to the
extent of the shortfall and such Payahead Balance shall be reduced
accordingly;
(ii) the Servicer shall advance the amount equal to 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 any of the Obligor, the
Repurchase Amount, Liquidation Proceeds or proceeds of any other
Precomputed Receivables.
Any Precomputed Advance made by the Servicer shall increase Outstanding
Precomputed Advances, which Outstanding Precomputed Advances shall be
reduced by any subsequent payments by or on behalf of the Obligor,
collections of Liquidation Proceeds in respect of Precomputed Receivables
or payments of the Repurchase Amount. If the Servicer shall determine that
an Outstanding Precomputed Advance with respect to any Precomputed
Receivable shall not be recoverable in accordance with the preceding
sentence, the Servicer shall be reimbursed from any collections made on
other Precomputed Receivables which are included in the Pooled Property and
Outstanding Precomputed Advances with respect to such Precomputed
Receivables shall be reduced accordingly.
(b) Advances on Simple Interest Receivables. 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 APRs for the related Collection
Period (assuming the Simple Interest Receivables pay on their respective
due dates) minus the amount of interest actually received on the Simple
Interest Receivables during the related Collection Period (such amount, a
"Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an
amount equal to such negative number shall be paid to the Servicer and the
amount of Outstanding Simple Interest Advances shall be reduced by such
amount. In addition, in the event that a Simple Interest Receivable
becomes a Liquidated Receivable, Liquidation Proceeds with respect to a
Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest
Advances but only to the extent of any Outstanding Simple Interest
Advances. The Servicer shall not make any advance with respect to
principal of Simple Interest Receivables.
SECTION 5.5 Additional Deposits. (a) The Servicer shall
deposit in the Certificate Account the aggregate Advances pursuant to
Section 5.4. To the extent that the Servicer fails to make a Simple
Interest Advance pursuant to Section 5.4(b) on the date required, the
Servicer shall notify the Administrative Agent 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 Certificate Account. The Servicer and the Seller shall deposit or
cause to be deposited in the Certificate Account the aggregate Repurchase
Amount with respect to Repurchased Receivables. The Servicer shall deposit
therein all amounts to be paid under Section 10.2. The Seller shall
deposit therein any amounts paid to it under each Interest Rate Cap
Agreement. The Servicer shall direct the Administrative Agent to make any
Monthly Yield Account Withdrawal and deposit the amount so withdrawn in the
Certificate Account. All deposits pursuant to this Section 5.5(a) shall be
made on the Deposit Date.
(b) On each Distribution Date, the Trustee shall cause to be
transferred from the Payahead Account to the Certificate Account, in
immediately available funds, the aggregate previous Payaheads to be applied
to Scheduled Payments on Precomputed Receivables for the related Collection
Period or prepayments for the related Collection Period, pursuant to
Sections 5.3 and 5.4, in the amounts set forth in the Servicer's
Certificate for such Distribution Date. A single, net transfer may be
made.
SECTION 5.6 Distributions. On each Distribution Date, the
Administrative Agent shall make the following distributions of amounts on
deposit in the Certificate Account with respect to the related Collection
Period, as shown from the Servicer's Certificate delivered on the preceding
Determination Date, in the following order of priority (to the extent of
amounts available therefor):
(a) Shortfall Interest. To each Purchaser, in accordance with
its Purchase Percentage, as a payment of Certificate Interest due on
any prior Distribution Date which was not paid on such prior
Distribution Date as a result of insufficient amounts on deposit in
the Certificate Account from the sources described herein for the
payment therefor at such or any later Distribution Date ("Shortfall
Interest"), plus interest on such Shortfall Interest; any such
Shortfall Interest shall bear interest at the Default Rate and shall
be payable, to the extent of funds available therefor, from (i)
Interest Distribution Amounts for the Collection Period preceding such
Distribution Date, (ii) if necessary after application of amounts
pursuant to clause (i), the Applicable Subordinated Percentage of the
Principal Distribution Amount for such Collection Period, (iii) if
necessary after application of amounts pursuant to clause (ii),
amounts to be transferred from the Reserve Account to the Certificate
Account on such Distribution Date pursuant to Section 5.7(d) and (iv)
if necessary after application of amounts pursuant to clause (iii),
from the Applicable Senior Percentage of the Principal Distribution
Amount for such Collection Period (clauses (i), (ii), (iii) and (iv),
collectively, "Available Amounts"; provided that any determination and
application of Available Amounts shall be made in the order of the
priority established by the foregoing clauses (i), (ii), (iii) and
(iv)); and provided, further, that the calculation of Available
Amounts with respect to each distribution under this Section 5.6
(other than distributions under Sections 5.6(e) and (j)) shall not
include any amounts on account of Realized Losses.
(b) Shortfall Principal. To each Purchaser as payment of all or
that portion of the Applicable Senior Percentage of the Principal
Distribution Amounts due on any prior Distribution Date which was not
paid on such prior Distribution Date as a result of insufficient
amounts of principal collections on deposit in the Certificate Account
at such Distribution Date, payable, to the extent of funds available
therefor, from Available Amounts.
(c) Reimbursement of Advances. To the Servicer, the aggregate
amount of Advances, which, prior to such Distribution Date, have not
been reimbursed pursuant to this Section, payable, to the extent of
funds available therefor, from Available Amounts.
(d) Senior Certificate Interest. To each Purchaser, Certificate
Interest payable on such Purchaser's Purchase Percentage of the Senior
Amount at the Certificate Rate applicable to the Accrual Period to
which such Distribution Date relates, payable, to the extent of funds
available therefor, from Available Amounts.
(e) Senior Certificate Principal. To each Purchaser, in
reduction of the Senior Amount, Certificate Principal to such
Purchaser in an amount equal to the lesser of (a) the product of such
Purchaser's Purchase Percentage and the then outstanding Senior Amount
and (b) the product of (i) such Purchaser's Purchase Percentage and
(ii) the Applicable Senior Percentage of the Principal Distribution
Amount for the Accrual Period preceding such Distribution Date,
payable, to the extent of funds available therefor, from Available
Amounts.
(f) Servicing Fee. To the Servicer as payment of the Servicing
Fee for the Accrual Period to which such Distribution Date relates,
payable, to the extent of funds available therefor, from Available
Amounts.
(g) Reserve Account Deposit. To the Reserve Account to the
extent necessary to cause the Specified Reserve Account Balance to
equal the Minimum Reserve Account Balance, payable, to the extent of
funds available therefor, from Available Amounts.
(h) Increased Costs. To any Senior Certificateholder (or the
Administrative Agent or the Agent pursuant to Section 11.3) which has
submitted a demand for Increased Costs during any preceding Collection
Period pursuant to Section 11.3, payment of (i) interest, payable at a
rate per annum equal to the Default Rate, on Increased Costs due on
any prior Distribution Date which were not paid on such prior
Distribution Date as a result of insufficient amounts being available
for the payment therefor at such Distribution Date and (ii) the amount
of such Increased Costs as so demanded, payable, in each case, from
Available Amounts of the type described in clauses (i) and (ii) of the
definition of such term.
(i) Subordinated Certificate Interest. To the holder of the
Subordinated Certificate as Certificate Interest payable on the
Subordinated Certificate at the Certificate Rate for the related
Accrual Period, from the remaining Interest Distribution Amounts.
(j) Subordinated Certificate Principal. To the Seller as
Certificate Principal payable on and as a reduction of the
Subordinated Certificate for the preceding Accrual Period, payable, to
the extent of funds available therefor, from the Applicable
Subordinated Percentage of the Principal Distribution Amount for the
related Collection Period.
(k) Remaining Amounts to Seller. To the Seller, all remaining
Interest Distribution Amounts and any other amounts remaining in the
Certificate Account.
Distributions to any Purchaser pursuant to any of the foregoing
paragraphs shall be made to such Purchaser pursuant to Section 2.7 of the
Short Term RPA. The Servicer shall, in its sole discretion, allocate among
the Sellers any amounts due and payable to the Sellers hereunder and
neither the Agent nor the Administrative Agent shall have any obligation to
make such allocation. Any distributions to the Servicer or the Sellers
shall be made on a net basis to such Persons, to the extent that the
Servicer or such Seller shall have failed to make a deposit or payment
required hereunder.
SECTION 5.7 Subordination; Reserve Account.
(a) The rights of each of the Sellers to receive distributions
in respect of the Subordinated Certificate and any payments in respect of
any Seller Subordinated Note shall be and hereby are subordinated, and made
junior, to the rights of the Purchasers to receive distributions in respect
of the Senior Certificates. Such subordination shall be effected pursuant
to the priority of payments set forth in Section 5.6.
(b) In order to effect the subordination provided for herein and
to provide for the prompt payment to the Purchasers pursuant to Section
5.6, the Seller as holder of the Subordinated Certificate, on behalf of
itself and its successors and assigns, sells, conveys and transfers to the
Administrative Agent for the benefit of the Purchasers all of the Seller's
right, title and interest in and to the Reserve Account, all amounts on
deposit therein from time to time and all proceeds thereof. Neither the
Seller nor the Servicer shall have any right to withdraw amounts from the
Reserve Account.
(c) If at any time the Specified Reserve Account Balance is less
than the Minimum Reserve Account Balance, then on the first succeeding
Distribution Date thereafter, and on each succeeding Distribution Date
thereafter so long as the Specified Reserve Account Balance is less than
the Minimum Reserve Account Balance, any distributions that would be made
if the Servicer is CCC, to the Servicer pursuant to Section 5.6(c) (such
amounts, "Reallocated Payments") (or such lesser amounts as may be
necessary to cause the Specified Reserve Account Balance to at least equal
the Minimum Reserve Account Balance) shall be deposited by the
Administrative Agent into the Reserve Account, and held as set forth in
Section 5.1 and this Section 5.7.
(d) If on any Determination Date the distributions to be made
from Available Amounts exceed such Available Amounts of the type described
in clauses (i) and (ii) of the definition of such term, as shown from the
Servicer's Certificate for such Determination Date, the Administrative
Agent on the following Distribution Date shall withdraw from the Reserve
Account an amount equal to such excess, if then on deposit in the Reserve
Account (or, if a lesser amount is on deposit, such lesser amount), and
deposit such amount in the Certificate Account.
(e) If the Servicer pursuant to Section 5.4 determines on any
Determination Date that it is required to make an Advance and does not do
so from its own funds, the Servicer shall instruct the Administrative Agent
to withdraw funds from the Reserve Account and deposit them in the
Certificate Account to cover any shortfall. Such payment shall be deemed
to have been made by the Servicer pursuant to Section 5.4 for purposes of
making distributions pursuant to this Short Term Retail PSA, 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.
(f) If on any Deposit Date (after giving effect to distributions
to be made to the Purchasers on the next succeeding Distribution Date), the
sum of the amounts on deposit in the Reserve Account and the Yield Account
equals or exceeds the Senior Amount (plus any other amounts due and payable
to the Purchasers under this Short Term Retail PSA) on such date, the
Administrative Agent shall withdraw such amounts from the Reserve Account
and the Yield Account and deposit such withdrawal in the Certificate
Account to pay to each of the Purchasers, on the related Distribution Date,
an amount equal to such Purchaser's Purchase Percentage of the then
outstanding Senior Amount (plus any such other amounts owing to such
Purchaser hereunder).
(g) If on any date the Senior Amount has been reduced to zero,
any amounts then on deposit in the Reserve Account and the Yield Account,
after giving effect to the distributions made on the Scheduled Maturity
Date, shall be distributed to the Active Seller, on the Business Day
following the Scheduled Maturity Date.
SECTION 5.8 Interest Rate Cap Agreements. If, on any
Distribution Date, the aggregate notional amount under an Interest Rate Cap
Agreement shall exceed the then outstanding aggregate Principal Balance of
the related Receivables Group by an amount which shall be specified in such
Interest Rate Cap Agreement, then the Administrative Agent shall give
notice to each Cap Provider thereunder to reassign such excess of the
aggregate notional amount under such Interest Rate Cap Agreement to the
related Seller on such Distribution Date.
ARTICLE VI
The Certificates; Transfers of Purchase Commitments
SECTION 6.1 The Certificates. The Senior Certificates and the
Subordinated Certificate shall be substantially in the forms of Exhibits A
and B, respectively, with, in the case of each Senior Certificate,
appropriate insertions as to the Purchaser and its Purchase Commitment and
Purchase Percentage. Each Purchaser is hereby authorized to record (a)
with respect to each Purchase, the Transfer Date and its pro rata share of
the Purchase Price and (b) the date and amount of each payment or
prepayment of principal hereunder on the schedule annexed to and
constituting a part of its Senior Certificate and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, provided that the failure so to record the amount of any such pro
rata portion of a Purchase Price or any error in so recording such amount
shall not limit or otherwise affect the obligations of the Sellers
hereunder.
SECTION 6.2 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate shall be surrendered to the Active Seller
or (b) the Active Seller shall receive evidence satisfactory in its
reasonable discretion of the destruction, loss, or theft of any Certificate
and a certificate of an authorized officer of the Holder named in the
Register certifying as to such destruction, loss or theft, the Active
Seller shall execute and deliver to the Holder named in such Certificate
or, in the case of a Senior Certificate, to the Administrative Agent for
delivery to such Holder, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like stated
amount (as indicated from the Register). Any tax or other governmental
charge which may be imposed in connection with the issuance of any new
Certificate under this Section 6.2 shall be for the account of the
Servicer. Any replacement Certificate issued pursuant to this Section 6.2
shall constitute conclusive evidence of the undivided participating
ownership of the Pooled Property, as if originally issued, whether or not
the lost, stolen, or destroyed Certificate shall be found at any time.
SECTION 6.3 Transfer and Exchange of Certificates. (a) The
Administrative Agent shall maintain, or cause to be maintained a register
(the "Register") in which, subject to such reasonable regulations as it may
prescribe, the Administrative Agent shall provide for the recordation of
the names and addresses of, and the Purchase Commitment and Purchase
Percentage of, the Purchasers. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Seller, the Servicer,
CFC, the Agent, the Administrative Agent and each Purchaser may treat each
Person whose name is recorded in the Register as the Holder of the
Certificate recorded therein for all purposes of this Short Term Retail
PSA. The Administrative Agent shall also maintain at such address copies
of each Commitment Transfer Supplement delivered to it.
(b) Except as otherwise provided in Section 7.1, the
Subordinated Certificate shall be held by the Active Seller, on behalf of
itself and all the other Sellers, and shall not be transferable.
(c) Any Purchaser may sell participations in, or sell all or a
portion of, the rights and obligations of such Purchaser hereunder and
under its Senior Certificate in accordance with the terms of Section 9.6 of
the Short Term RPA.
SECTION 6.4 Persons Deemed Owners. Each of the Agent and the
Administrative Agent may treat the Person in whose name any Certificate
shall be recorded in the Register as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 5.6 and for all
other purposes, and neither the Agent nor the Administrative Agent shall be
bound by any notice to the contrary. The Administrative Agent shall
furnish or cause to be furnished to the Servicer, within fifteen days after
receipt by the Administrative Agent of a request therefor from the
Servicer, in such form as the Servicer may reasonably require, a list of
the names and addresses of the Senior Certificateholders as of the most
recent Record Date.
ARTICLE VII
The Seller
SECTION 7.1 Representations, Warranties and Covenants of the
Sellers. (a) On each Transfer Date, the Active Seller makes the following
representations and warranties in respect of the Purchase made and the
Receivables Group transferred on such Transfer Date, on which the
Administrative Agent, the Agent and each Purchaser relies in executing and
delivering this Short Term Retail PSA and in accepting the Receivables and
the other Pooled Property on such date.
(i) Purchase Agreement Representations and Warranties. The
representations and warranties of such Seller set forth in the
Purchase Agreement are true and correct in all material respects on
and as of such Transfer Date and the Agent, the Administrative Agent
and each Purchaser may rely on such representations and warranties as
if made directly to such Person pursuant to this Short Term Retail
PSA.
(ii) Disclosure. No representation or warranty made by such
Seller in this Short Term Retail PSA or in any report, certificate or
any other document furnished in connection herewith contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
(iii) Chief Executive Office; Location of Contract Files. The
chief executive office of such Seller is 27777 Franklin Road,
Southfield, Michigan 48034. The office where all books, records and
documents evidencing the Pooled Property are kept is listed on
Schedule 3 or such other address as may be specified pursuant to
Section 2.8(b).
(b) Each Seller hereby covenants and agrees that, until the
Scheduled Maturity Date:
(i) No Liens or Transfers. Except for any Purchase, such
Seller shall not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on any of
the Pooled Property whether now existing or hereafter created, or any
interest therein, or on any of the Senior Certificates, and such
Seller shall defend the right, title and interest of the Purchasers
in, to and under the Pooled Property, whether now existing or
hereafter created, against all claims of third parties claiming
through or under such Seller. Such Seller shall not sell to any other
Person the Subordinated Certificate or the Seller's rights to receive
distributions on account thereof, provided that the Seller may pledge
or assign the Subordinated Certificate to any Person.
(ii) Delivery of Collections and Interest Rate Cap Agreement
Payments. In the event that such Seller receives any collections on
account of any of the Pooled Property or any payments under any
Interest Rate Cap Agreement, such Seller agrees to promptly (but in no
event more than two Business Days following receipt or, with respect
to payments under any Interest Rate Cap Agreement, by the
Determination Date following such date of receipt, if earlier) deliver
the same for deposit into the Certificate Account in like form as
received (duly indorsed to the Administrative Agent, if required) and,
until such delivery, hold such property in trust for the
Administrative Agent and the Purchasers.
(iii) Notice of Liens. Such Seller shall notify the
Administrative Agent and the Agent promptly after becoming aware of
any Lien on any Pooled Property other than in connection with any
Purchase.
(iv) Compliance with Law. Such Seller shall comply in all
material respects with all Requirements of Law applicable to the
Seller, its certificate or articles of incorporation and its by-laws.
(v) Activities of the Seller. Such Seller shall not engage in
any business or activity of any kind or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking other than the transactions contemplated and authorized by
this Short Term Retail PSA, the Certificates and the Purchase
Agreement.
(vi) Indebtedness. Such Seller shall not create, incur or assume
any indebtedness or other liability whatsoever or issue any securities
or sell or transfer any property to a trust or other Person which
issues securities or other evidences of ownership in respect thereof,
except for the delivery by such Seller of its Seller Subordinated Note
to CFC, if applicable.
(vii) Guarantees. Such Seller shall not become or remain liable,
directly or contingently, in connection with any indebtedness or other
liability of any other Person, whether by guarantee, endorsement
(other than endorsements of negotiable instruments for deposit or
collection in the ordinary course of business), purchase or agreement
to purchase, agreement to supply or advance funds, or otherwise.
(viii) Investments. Such Seller will not make or suffer to exist
any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of indebtedness,
acquisition of the business or assets, or otherwise) in, any
Affiliate; provided, however, that the Seller shall not be prohibited
under this paragraph (viii) from declaring or paying any dividends in
respect to its common stock in accordance with paragraph (xi) below.
(ix) Merger; Sales. Such Seller will not sell any shares of any
class of its capital stock to any Person, or enter into any
transaction of merger or consolidation, or terminate, liquidate or
dissolve itself (or suffer any termination, liquidation or
dissolution), or acquire or be acquired by any Person, or otherwise
make (or suffer) any material change in the organization of or method
of conducting its business, or, except as expressly contemplated
hereby, convey, sell, lease or otherwise dispose of any of its
property or business.
(x) Agreements; Governance Documents. Such Seller will not
become a party to, or permit any of its properties to be bound by, any
indenture, mortgage, instrument, contract, agreement, lease or other
undertaking, other than this Short Term Retail PSA, the Short Term
RPA, the Certificates, the Purchase Agreement, the CFC Revolving
Credit Agreement, the Long Term Retail PSA, the Long Term RPA and any
document or agreement executed and delivered in connection therewith.
Such Seller will not amend or modify its certificate or articles of
incorporation or its by-laws or cancel, terminate, amend, supplement,
modify or waive any provision of the Purchase Agreement or any
Interest Rate Cap Agreement or request, consent or agree to or suffer
to exist or permit any such cancellation, termination, amendment,
supplement, modification or waiver (each, a "modification") without
the prior written consent of the Agent, the Administrative Agent and
the Required Purchasers; provided, that such Seller may make any such
modification which is solely ministerial and does not adversely affect
the interests of the Purchasers hereunder.
(xi) Dividends. Such Seller shall not declare or pay any
dividend on, or make any other payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares
of its capital stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or
indirectly, whether in cash, property or obligations of such Seller,
except for dividends to CFC the amount of which so declared and paid
does not exceed the amount theretofore actually received by such
Seller as Certificate Interest or Certificate Principal on the
Subordinated Certificate.
(xii) No Sale of Fixed Value Payments. Such Seller shall not
sell, assign or otherwise transfer to any Person any Fixed Value
Payment in respect of the Fixed Value Receivables.
Notwithstanding anything contained herein to the contrary, any Seller may
pledge or assign its interest in the Subordinated Certificate to any
Person.
SECTION 7.2 Liability of Seller; Indemnities.
(a) Each Seller shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by such Seller under
this Short Term Retail PSA and shall have no other obligations or
liabilities hereunder.
(b) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
taxes that may at any time be asserted against such Person with respect to,
and as of the date of, each transfer of the Pooled Property to the
Purchasers or the issuance of the Senior Certificates on the related
Transfer Date, or with respect to the ownership of the Pooled Property
including any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege, or license taxes (but not
including any taxes asserted with respect to ownership of the Senior
Certificates or federal or other income taxes, including franchise taxes
measured by net income, arising out of the transactions contemplated by
this Short Term Retail PSA or transfer taxes arising in connection with the
transfer of the Certificates), and reasonable costs and expenses in
defending against the same.
(c) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
loss, liability or expense incurred by reason of (i) such Seller's willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder or by reason of reckless disregard of the obligations and duties
hereunder, (ii) any action taken, or failed to be taken, by such Seller in
respect of any portion of the Pooled Property or (iii) any breach of the
representation and warranty set forth in Section 2.4(c).
(d) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
loss, liability or expense incurred by reason of the violation by such
Seller of federal or state securities laws in connection with the issuance
and sale of the Certificates.
(e) Indemnification under this Section 7.2 shall include
reasonable fees and expenses of counsel and expenses of litigation and
shall survive termination of this Short Term Retail PSA. If any Seller
shall have made any indemnity payments to any Person indemnified under this
Section 7.2 and such Person thereafter shall collect any of such amounts
from Persons other than such Seller, such Person shall immediately upon
receipt thereof repay such amounts to such Seller, without interest.
(f) Notwithstanding anything herein to the contrary, amounts
required to be paid by any Seller as indemnification under this Section 7.2
shall be limited to amounts received by such Seller on account of the
Subordinated Certificate.
SECTION 7.3 Limitation on Liability of Seller and Others. Each
Seller and any of its directors, officers, employees or agents may rely in
good faith on any document of any kind, believed by any of them to be
genuine and properly executed and submitted by any Person respecting any
matters arising hereunder. No Seller shall be under any obligation under
this Short Term Retail PSA to appear in, prosecute or defend any legal
action that shall be unrelated to its respective obligations under this
Short Term Retail PSA and that in its respective opinions may involve it in
any expense or liability.
ARTICLE VIII
The Servicer; CCC
SECTION 8.1 Representations and Warranties of Servicer. On each
Transfer Date the Servicer makes the following representations and
warranties in respect of the Purchase made and the Receivables Group
transferred on such Transfer Date, on which the Administrative Agent, the
Agent and each Purchaser relies in executing and delivering this Short Term
Retail PSA and in accepting the Receivables and the other Pooled Property
on such date.
(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 power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire, own, sell and service the
Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign 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 power and
authority to execute and deliver this Short Term Retail PSA and to
carry out its terms; and the execution, delivery and performance of
this Short Term Retail PSA have been duly authorized by the Servicer
by all necessary corporate action.
(d) Binding Obligation. This Short Term Retail PSA 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 Short Term Retail PSA and the fulfillment of the
terms hereof shall not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the certificate or articles of
incorporation or by-laws of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it
shall be 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 this Short Term
Retail PSA); nor 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 by any Person
other than a Purchaser, 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 Short Term Retail PSA or the other Related
Documents, (ii) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Short
Term Retail PSA or the other Related Documents or (iii) seeking any
determination or ruling that might have a material adverse effect on
the performance by the Servicer of its obligations under, or the
validity or enforceability of, this Short Term Retail PSA or the other
Related Documents.
(g) Disclosure. No representation or warranty made by the
Servicer in this Short Term Retail PSA or in any report, certificate
or any other document furnished in connection herewith contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
SECTION 8.2 Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer under
this Short Term Retail PSA and the Servicer shall not have any other
obligations or liabilities hereunder.
(b) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder 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 or in respect of
any action taken, or failed to be taken, by the Servicer in respect of any
portion of the Pooled Property.
(c) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder from and against
any taxes that may at any time be asserted against the Agent, the
Administrative Agent or such Certificateholder with respect to the
transactions contemplated hereby, including any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege,
or license taxes (but not including any taxes asserted with respect to the
ownership of the Senior Certificates, federal or other income taxes,
including franchise taxes, measured by net income, arising out of
transactions contemplated by this Short Term Retail PSA or transfer taxes
arising in connection with transfers of the Certificates) and reasonable
costs and expenses in defending against the same.
(d) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder 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, or incurred by such Person as a result of the
willful misfeasance, negligence, or bad faith of the Servicer in the
performance of its duties under this Short Term Retail PSA.
(e) The Servicer shall indemnify, defend and hold harmless the
Administrative Agent and the Agent from and against all costs, expenses,
losses, claims, damages, and liabilities arising out of or incurred in
connection with the performance by such Person of its duties herein
contained, except to the extent that such costs, expenses, losses, claims,
damages or liabilities for which such Person is seeking indemnity pursuant
hereto are due to its willful misfeasance, gross negligence or bad faith.
(f) Indemnification under this Section shall include reasonable
fees and expenses of counsel and expenses of litigation. The indemnity
obligations of the Servicer hereunder shall survive any termination of the
Servicer pursuant to Section 9.1, but only with respect to obligations
arising prior thereto, and any payment of the amount owing under, or the
Repurchase Amount with respect to, any Contract. If the Servicer shall
have made any indemnity payments to any Person indemnified under this
Section 8.2 and such Person thereafter collects any of such amounts from
others, such Person shall immediately upon receipt thereof repay such
amounts to the Servicer, without interest.
SECTION 8.3 Limitation on Liability of Servicer and Others.
(a) Except as provided in this Short Term Retail PSA, the
Servicer shall be under no 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 Short Term Retail PSA and that in its
opinion may involve it in any expense or liability; provided, however, that
the Servicer may undertake, at its expense, any reasonable action that it
may deem necessary or desirable in respect of this Short Term Retail PSA
and the rights and duties of the parties to this Short Term Retail PSA and
the interests of the Certificateholders under this Short Term Retail PSA.
(b) The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind,
believed by it to be genuine and properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall be
under no obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Short Term Retail PSA
and that in its opinion may involve it in any expense or liability.
SECTION 8.4 Resignations. The Servicer shall not resign from
its obligation and duties under this Short Term Retail PSA except upon a
determination that the performance of its duties is no longer permissible
under applicable law. Any such determination permitting the resignation of
the Servicer shall be evidenced by an Opinion of Counsel to such effect
addressed to the Administrative Agent, the Agent and each Purchaser and
delivered to the Administrative Agent. No such resignation shall become
effective until a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
9.2.
ARTICLE IX
Service Defaults
SECTION 9.1 Service Defaults.
(a) If any one of the following events ("Service Defaults")
shall occur and be continuing:
(i) Any failure by the Servicer (or, for so long as CCC is the
Servicer, the Active Seller) to make or to cause to be made any
required payment or deposit, which shall continue unremedied for a
period of two Business Days following the due date therefor;
(ii) Any failure by the Servicer to deliver to the Administrative
Agent the Servicer's Certificate for any Collection Period required
hereunder within five Business Days from the date on which such
Servicer's Certificate shall be due to be delivered;
(iii) Except for the transfer of the Transferred Property by the
Servicer to CFC, the Servicer shall have assigned, transferred,
pledged or otherwise conveyed such Transferred Property (or any
portion thereof) to any other Person;
(iv) Failure on the part of the Servicer (or, for so long as CCC
is the Servicer, the Active Seller) to duly observe or to perform in
any material respect any other covenants or agreements set forth in
the Certificates or in this Short Term Retail PSA, which failure
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer (or, for so long as the CCC is
the Servicer, the Active Seller) by the Agent, the Administrative
Agent and the Required Purchasers;
(v) If, at any date, there shall exist a material
misrepresentation with respect to any representation or warranty made
by the Servicer hereunder or in the Purchase Agreement (other than a
material misrepresentation in respect of a Repurchased Receivable),
which continues unremedied for a period of 30 days after the date on
which written notice of such misrepresentation, requiring the same to
be remedied, shall have been given to the Servicer (or, for so long as
CCC is the Servicer, the Seller) by the Agent, the Administrative
Agent or the Required Purchasers;
(vi) The entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of
a conservator, receiver, liquidator or trustee for any of the
Servicer, CFC or Chrysler Corporation in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings, or for the winding up or liquidation of its
affairs, and any such decree or order continues unstayed and in effect
for a period of 60 consecutive days;
(vii) The consent by any of the Servicer, CFC or Chrysler
Corporation to the appointment of a conservator, receiver, liquidator
or trustee in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of or
relating to such Person or relating to substantially all of its
property, the admission in writing by such Person of its inability to
pay its debts generally as they become due, the filing by such Person
of a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, the making by such Person of an
assignment for the benefit of its creditors or the voluntary
suspension by such Person of payment of its obligations;
then, and in each and every case and so long as a Service Default shall not
have been remedied, the Administrative Agent, the Agent and the Required
Purchasers by notice then given in writing to the Servicer, may terminate
all of the rights and obligations of the Servicer under this Short Term
Retail PSA. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Short Term
Retail PSA, whether with respect to the Certificates or the Pooled Property
or otherwise, shall pass to and be vested in the Administrative Agent
pursuant to this Section 9.1; and thereupon the Administrative Agent shall
be authorized and empowered to execute and deliver, on behalf of the
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 Receivable Files or the
Insurance Policies, the certificates of title to the Financed Vehicles, or
otherwise. The Servicer shall cooperate with the Administrative Agent or
such successor Servicer in effecting the termination of its
responsibilities and rights as Servicer under this Short Term Retail PSA,
including the transfer to the Administrative Agent or such successor
Servicer for administration of all cash amounts that are at the time held
by the Servicer for deposit, shall have been deposited by the Servicer in
the Certificate Account, or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Administrative Agent or such successor Servicer may require. In addition,
the Servicer shall transfer or cause to be transferred all electronic
records relating to the Receivables to the successor Servicer in such
electronic form as the successor Servicer may reasonably request, and shall
make available or cause to be made available to the successor Servicer such
personnel having knowledge of such electronic records for such period of
time as the successor Servicer shall reasonably require.
(b) If any of the foregoing Service Defaults occur, neither the
Agent nor the Administrative Agent shall have any obligation to notify
Certificateholders or any other Person of such occurrence prior to the
continuance of such event through the end of any cure period specified in
Section 9.1(a).
SECTION 9.2 Administrative Agent to Act; Appointment of
Successor Servicer. Upon the Servicer's resignation pursuant to Section
8.4 or upon the Servicer's receipt of notice of termination as Servicer
pursuant to Section 9.1, the Administrative Agent shall be the successor in
all respects to the Servicer in its capacity as Servicer under this Short
Term Retail PSA, and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions of this Short Term Retail PSA; provided, that, if the
Administrative Agent shall be acting as such successor Servicer, it shall
not be responsible for the payment of any reasonable amounts required to be
paid with respect to the expenses of the Servicer pursuant to the last
sentence of Section 4.8(b) (to the extent that such successor Servicer
would not otherwise be reimbursed for such amounts) which payments, in each
case, shall instead be paid monthly in arrears from Available Amounts
subsequent to distributions under Section 5.6(e) but prior to distributions
under Section 5.6(f). As compensation therefor, the Administrative Agent
shall be entitled to such compensation (whether payable out of the
Certificate Account or otherwise) as the Servicer would have been entitled
to under this Short Term Retail PSA if no such notice of termination or
resignation had been given. Notwithstanding the above, the Administrative
Agent may, if it shall be unwilling or legally unable so to act, appoint,
or petition a court of competent jurisdiction to appoint, an Eligible
Servicer as the successor to the terminated Servicer under this Short Term
Retail PSA. The Administrative Agent and such successor shall take such
action, consistent with this Short Term Retail PSA, as shall be necessary
to effectuate any such succession. No Servicer shall resign or be relieved
of its duties under this Short Term Retail PSA until a newly appointed
Servicer shall have assumed the responsibilities and obligations of the
terminated Servicer under this Short Term Retail PSA. Neither the
Administrative Agent nor any successor Servicer shall have any liability
for any failure to perform servicing obligations hereunder due to the
timeliness, accuracy or completeness of information supplied by any
predecessor Servicer.
SECTION 9.3 Effect of Servicing Transfer.
(a) After the transfer of servicing hereunder, the
Administrative Agent or successor Servicer shall notify Obligors to make
directly to the successor Servicer payments that are due under the
Receivables after the effective date of such transfer.
(b) After the transfer of servicing hereunder, the outgoing
Servicer shall have no further obligations with respect to the management,
administration, servicing, custody or collection of the Receivables and the
successor Servicer shall have all of such obligations, except that the
outgoing Servicer shall transmit or cause to be transmitted directly to the
successor Servicer for its own account, promptly on receipt and in the same
form in which received, any amounts held by the outgoing Servicer (properly
endorsed where required for the successor Servicer to collect any such
items) received as payments upon or otherwise in connection with the
Receivables and the outgoing Servicer shall continue to cooperate with the
successor Servicer by providing information and in the enforcement of the
Receivables and the Insurance Policies.
(c) A transfer of servicing hereunder shall not affect the
rights and duties of the parties hereunder (including the obligations and
indemnities of any Seller pursuant to Sections 2.6, 7.1 and 7.2 or, with
respect to obligations and indemnities arising prior to, or concurrently
with, a transfer of servicing hereunder, the outgoing Servicer pursuant to
Sections 4.7, 8.1 or 8.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other Pooled Property. The successor Servicer shall, upon its appointment
pursuant to Section 9.2 and as part of its duties and responsibilities
under this Short Term Retail PSA, promptly take all action it deems
necessary or appropriate so that the outgoing Servicer (in whatever
capacity) is paid or reimbursed all amounts it is entitled to receive under
this Short Term Retail PSA on each Distribution Date subsequent to the date
on which it is terminated as Servicer hereunder.
SECTION 9.4 Notification to Certificateholders. Upon any notice
of a Service Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article IX, the Administrative
Agent shall give prompt written notice thereof to the Agent and to the
Purchasers of record at the preceding Record Date at their respective
addresses of record.
ARTICLE X
Termination
SECTION 10.1 Termination of this Short Term Retail PSA. (a)
The respective obligations and responsibilities of the Sellers, the
Servicer, the Agent and the Administrative Agent hereunder shall terminate
(except as otherwise expressly provided herein) upon the earliest of: (i)
the Distribution Date immediately succeeding the repurchase by the Sellers
of the Pooled Property pursuant to Section 10.2, (ii) the payment to the
Purchasers of the Senior Amount, interest thereon and any fees required to
be paid to them pursuant to this Short Term Retail PSA or (iii) the
Distribution Date next succeeding the month which is six months after the
maturity or the liquidation of the last Receivable held as part of the
Pooled Property and the disposition of any amounts received upon
liquidation of any property remaining as part of the Pooled Property. The
Servicer shall promptly notify the Administrative Agent and the Agent of
any prospective termination pursuant to this Section 10.1 prior to the
Scheduled Maturity Date and the Administrative Agent, promptly upon its
receipt of such notice, shall notify each Purchaser.
(b) Notice of any termination, specifying the Distribution Date
upon which the Purchasers may surrender the Senior Certificates to the
Administrative Agent for payment of the final distribution and
cancellation, shall be given promptly by letter from the Administrative
Agent to the Agent, the Purchasers and the Sellers mailed not earlier than
the 15th day and not later than the 25th day of the month immediately
preceding the specified Distribution Date, stating the aggregate amount of
any such final payment, that the Record Date otherwise applicable to such
Distribution Date is not applicable, that instead payments will be made
only upon presentation and surrender of the Senior Certificates at the
office of the Administrative Agent therein specified. Upon presentation
and surrender of the Senior Certificates, the Administrative Agent shall
cause to be distributed to Purchasers amounts distributable on such
Distribution Date pursuant to Sections 5.6 and 5.7 and, after payment of
Certificate Principal and Certificate Interest on the Senior Certificates,
any Increased Costs claimed by any Purchaser.
(c) In the event that all of the Purchasers shall not surrender
their Senior Certificates for cancellation within six months after the date
specified in the written notice delivered in accordance with Section
10.1(b), the Administrative Agent shall give a second written notice to the
remaining Purchasers to surrender their Senior Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after the second notice all the Senior Certificates shall
not have been surrendered for cancellation, the Servicer may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Purchasers concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Short Term Retail PSA. Any funds
remaining as part of the Pooled Property (whether in the Trust Accounts or
otherwise) after exhaustion of such remedies shall be distributed by the
Administrative Agent to the Active Seller.
SECTION 10.2 Repurchases of Pooled Property. If on any
Distribution Date the outstanding Senior Amount on such date is equal to or
less than 10% of the largest Senior Amount ever previously outstanding
under this Short Term Retail PSA (after giving effect to distributions to
the Purchasers on such Distribution Date), the Sellers may, at their
option, repurchase the Pooled Property by giving the Administrative Agent
irrevocable notice no later than the first Business Day of the following
calendar month. The Sellers shall pay the aggregate Repurchase Amount for
the Receivables on the Determination Date following the date of its notice.
The payment shall be made in the manner specified in Section 5.5 and shall
be distributed pursuant to Section 5.6. On such Distribution Date after
giving effect to the distribution to the Purchasers required by Section
5.6, the Sellers shall again succeed to and own all interests in and to the
Pooled Property.
SECTION 10.3 Sale of Pooled Property. (a) Mandatory Sale. The
Administrative Agent or the Agent with the consent of the Required
Purchasers may, or the Administrative Agent or the Agent at the direction
of the Required Purchasers shall, sell the Pooled Property to pay the
Purchasers any outstanding Senior Amount and any other amounts payable to
the Purchasers under this Short Term Retail PSA and the Senior Certificates
if (a) an event of the type described in Section 9.1(a)(vi) or (a)(vii)
occurs with respect to any Seller, (b) any Senior Amount is outstanding on
the Scheduled Maturity Date (after giving effect to distributions on such
date) or (c) at any date, the Senior Amount as of such date is not less
than the Pool Balance as of such date.
(b) Optional Sale. The Agent may at any time offer to sell the
Purchasers' interest in all or any portion of the Receivables for cash (i)
if the Senior Amount (plus accrued interest, fees and Increased Costs to
the date of such sale), after giving effect to such sale, will be reduced
to zero and (ii) if after giving effect thereto, no Service Default or
Retail Portfolio Termination Event shall be continuing. Proceeds of such
sale shall be treated as collections in respect of the repurchased
Receivables and applied in accordance with Section 5.6. Following the
receipt of a bona fide offer to purchase the Purchasers' interest in all or
any portion of the Receivables from any Person other than the Active
Seller, the Active Seller shall have a right of first refusal to purchase
such interest for an amount equal to the amount stated in such Person's
offer to purchase. The Sellers will be under no obligation to make such
purchase hereunder.
(c) Terms of Mandatory Sale. Any such sale or sales shall be
for cash or upon such other terms as the Agent or the Administrative Agent
shall, in its sole discretion, deem acceptable. Any of the Sellers, the
Servicer or CFC may purchase any of the Pooled Property for cash in any
such sale; provided that neither the Administrative Agent nor the Agent
shall be under any obligation to, and none of the Sellers, the Servicer or
CFC shall be deemed to have any right to require that the Administrative
Agent or the Agent, offer the Pooled Property to the Sellers, the Servicer
or CFC before soliciting any other offers or engaging in negotiations with
respect to the Pooled Property. The proceeds of any such sale shall be
first, applied against the costs and expenses (including fees and
disbursements of counsel) of the Administrative Agent or the Agent in
consummating such sale, second, applied against distributions required to
be made by paragraphs (a), (b), (d) and (e) of Section 5.6, third, applied
against any Increased Costs for which a demand has been made, fourth,
applied against any distribution required to be made by paragraph (i) of
Section 5.6 and fifth, to the extent of any proceeds remaining, turned over
to the Sellers.
ARTICLE XI
Miscellaneous
SECTION 11.1 Protection of Rights in Pooled Property. (a) The
Servicer 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 Administrative Agent and the Purchasers under
this Short Term Retail PSA in the Pooled Property. The Servicer shall
deliver (or cause to be delivered) to the Administrative Agent file-stamped
copies of, or filing receipts for, any document filed as provided in the
foregoing sentence as soon as available following such filing. In the
event that the Servicer fails to perform its obligations under this
Section, the Administrative Agent or the Agent may do so at the expense of
the Servicer.
(b) Neither the Servicer nor any Seller shall change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed pursuant to
Sections 3.1, 3.2 or 11.1(a) seriously misleading within the meaning of
sect. 9-402(7) of the UCC as in effect from time to time in the State of
Michigan, unless it shall have given each of the Administrative Agent and
the Agent written notice thereof no later than 15 days after such change.
(c) Each Seller and the Servicer shall give the Administrative
Agent and the Agent 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. Each Seller and the Servicer
shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States of
America.
(d) The Servicer shall maintain or cause to be maintained
accounts and records as to each 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 Liquidation Proceeds made and
payments owing (and the nature of each), and (ii) reconciliation between
payments or Liquidation Proceeds on (or with respect to) each Receivable
and the amounts from time to time deposited in the Certificate Account in
respect of such Receivable.
(e) The Servicer shall maintain or cause to be maintained
computer systems so that, from and after the time of sale under this Short
Term Retail PSA of the Receivables to the Certificateholders, the
Servicer's computer records (including archives) that shall refer to a
Receivable indicate clearly that such Receivable is owned by the
Certificateholders. Indication of the Certificateholders' undivided
participating ownership of a Receivable shall be deleted from or modified
on any such computer systems when, and only when, the Receivable shall
become a Repurchased Receivable.
(f) If at any time any Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
motor vehicle receivables to any prospective purchaser, lender or other
transferee, such Seller or the Servicer, as the case may be, shall give to
such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the
Certificateholders.
(g) Upon request, the Servicer, at its expense, shall furnish to
the Administrative Agent, within ten Business Days, a list of all
Receivables then held as part of the Pooled Property, together with a
reconciliation of such list to the schedules of such Receivables previously
delivered and to each of the Servicer's Certificates furnished pursuant to
Section 4.9 indicating removal of Receivables from the Pooled Property.
SECTION 11.2 Limitation on Rights of Certificateholders.
Nothing set forth in this Short Term Retail PSA, or contained in the terms
of the Certificates, shall be construed so as to constitute the Holders as
partners or members of an association. No Purchaser shall have any right
by virtue or by availing itself of any provisions of this Short Term Retail
PSA to institute any suit, action, or proceeding in equity or at law upon
or under or with respect to this Short Term Retail PSA, unless such
Purchaser previously shall have given to the Administrative Agent and the
Agent a written notice of default and of the continuance thereof and unless
the Required Purchasers shall have made written request upon the
Administrative Agent to institute such action, suit, or proceeding in its
own name as Administrative Agent under the Short Term Retail PSA and shall
have offered to the Administrative Agent such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Administrative Agent shall have refused to
institute any such action, suit or proceeding; provided that, if the
Administrative Agent has not responded to such request within 60 days after
its receipt of such notice, request and offer, the Administrative Agent
shall be deemed to have refused to institute any such action. No one or
more Purchasers shall have any right in any manner whatsoever by virtue or
by availing itself or themselves of any provisions of this Short Term
Retail PSA to affect, disturb or prejudice the rights of any other
Purchasers, or to obtain or seek to obtain priority over or preference to
any other such Purchaser or to enforce any right, under this Short Term
Retail PSA, except in the manner provided in this Short Term Retail PSA and
for the equal, ratable, and common benefit of all Purchasers. For the
protection and enforcement of the provisions of this Section 11.2, each
Purchaser and the Administrative Agent shall be entitled to such relief as
can be given either at law or in equity.
SECTION 11.3 Increased Costs. The Active Seller agrees that it
shall pay all amounts (such amounts, "Increased Costs") which arise in the
event that any of the following costs or events occur:
(a) Reemployment Costs. The Sellers agree to indemnify each
Purchaser and to hold each Purchaser harmless from any loss or expense,
including, but not limited to, any such loss or expense arising from
interest or fees payable by such Purchaser to lenders of funds obtained by
it to purchase or maintain that portion of its Purchases hereunder with
respect to which Certificate Interest is determined by reference to the
LIBO Rate as a consequence of (i) default by such Seller in the performance
of its obligations hereunder, (ii) the occurrence of a Service Default or
an event which would, with the giving of notice or the passage of time,
constitute a Service Default, (iii) the occurrence of an event referred to
in Section 11.3(b) or 11.3(c), (iv) default by such Seller in selling a
Receivables Group on any Transfer Date after having given notice of such
sale, or (v) any reduction of the Senior Amount prior to the termination of
an Accrual Period for which Certificate Interest is scheduled to be paid to
the Purchasers. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by any Purchaser to such
Seller shall be conclusive absent manifest error. This covenant shall
survive termination of this Short Term Retail PSA.
(b) Inability to Determine LIBO Rate. In the event that (a) the
Agent determines (which determination shall be conclusive and binding upon
the Sellers) that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBO Rate" are not being provided in the
relevant amounts or for the relevant maturities for the purposes of
determining rates of interest for the Purchases hereunder as provided
herein, or (b) the Required Purchasers determine (which determination shall
be conclusive and binding upon the Sellers) and shall notify the Agent that
the rates of interest referred to in the definition of "LIBO Rate" as the
basis upon which the rate of interest for Purchases hereunder is to be
determined do not adequately cover the cost to the Purchasers of making or
maintaining such Purchases, the Agent shall forthwith give telex notice of
such determination, confirmed in writing, to the Active Seller and the
Purchasers, whereupon until the Agent notifies the Active Seller and the
Administrative Agent that the circumstances giving rise to such notice no
longer exist, the Certificate Rate shall thereafter be calculated by
reference to the Base Rate.
(c) Illegality. Notwithstanding any other provision herein, if
any law, regulation, treaty or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any
Purchaser to make or maintain its interest in its Senior Certificate
because Certificate Interest on such Senior Certificate is based on the
LIBO Rate and such Purchaser shall notify the Agent, the Administrative
Agent and the Active Seller, then the portion of the Senior Amount
applicable to such Purchaser shall thereafter bear interest at a rate
determined by reference to the Base Rate. If any such change in the method
of calculating interest occurs on a day which is not the last day of the
Accrual Period, the Active Seller shall pay to the Agent for the account of
such Purchaser the amounts, if any, as may be required pursuant to
subsection 11.3(a).
(d) Additional Costs. In the event that any law, regulation,
treaty or directive or any change therein or in the interpretation or
application thereof or compliance by any Purchaser with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority enacted or made subsequent to the date hereof:
(i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Purchaser; or
(ii) does or shall impose on such Purchaser any other condition;
and the result of any of the foregoing is to increase the cost to such
Purchaser of purchasing or maintaining its portion of the Senior Amount
hereunder (such increase in cost, "Additional Costs") then, in any such
case, the Active Seller shall promptly pay to the Agent for the account of
such Purchaser, upon the written demand of such Purchaser to such Active
Seller (with a copy to the Agent), so long as such Additional Costs are not
otherwise included in the amounts required to be paid to such Purchaser
pursuant to any other paragraph under this Section 11.3, any additional
amounts necessary to compensate such Purchaser for such Additional Costs
which such Purchaser deems to be material as determined by such Purchaser.
If a Purchaser becomes entitled to claim any additional amounts pursuant to
this subsection 11.3(d), it shall promptly notify the Active Seller,
through the Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to
the foregoing sentence submitted by a Purchaser, through the Agent, to the
Active Seller shall be conclusive in the absence of manifest error.
(e) Transfer of Commitments. Upon the occurrence of any of the
events specified in subsections 11.3(c) or 11.3(d), each Purchaser whose
Short Term Commitments are affected by any such event agrees that it will
transfer such Short Term Commitments affected by any such event to another
branch office (or, if such Purchaser so elects, to an Affiliate) of such
Purchaser, provided that such transfer shall be made only if such Purchaser
shall have determined in good faith (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) that,
(a) on the basis of existing circumstances, such transfer will avoid such
events and will not result in any additional costs, liabilities or expenses
to such Purchaser or to the Active Seller and (b) such transfer is
otherwise consistent with the interests of such Purchaser.
(f) Changes in Capital Requirements. (i) In the event that, in
the opinion of counsel for any Purchaser (which may, in the discretion of
such Purchaser, be such Purchaser's internal counsel), compliance with any
law, rule, regulation or guideline, or any change therein or in the
interpretation or application thereof or compliance by any Purchaser with
any request or directive (whether or not having the force of law) from any
central bank or Governmental Authority enacted or made subsequent to the
date hereof shall affect the amount of capital required or expected to be
maintained by such Purchaser or any corporation controlling such Purchaser
and the amount of such capital that is required or expected to be
maintained is increased by or based upon the Short Term Commitment of such
Purchaser under this Short Term Retail PSA or any participation agreement
entered into pursuant to subsection 9.6 of the Short Term RPA, as
applicable (such event, a "Change in Law"), such affected Purchaser shall
notify the Active Seller and the Agent within 90 days after such affected
Purchaser shall first be required to comply with such Change in Law. At
the time of such notification such affected Purchaser shall provide the
Active Seller with a written statement setting forth the amount that would
adequately compensate such affected Purchaser for the costs associated with
its compliance with such Change in Law and setting forth in reasonable
detail the assumptions upon which such affected Purchaser calculated such
amount, and a copy of the opinion of counsel referred to in the preceding
sentence. Such affected Purchaser shall allocate to the Active Seller the
costs associated with such Change in Law in such a way that the proportion
of (i) such costs that are allocated to the Active Seller to (ii) the total
of such costs of such affected Purchaser associated with such Change in Law
as it relates to all commitments of such Purchaser to its customers of
similar creditworthiness as the Active Seller, is substantially the same as
the proportion of (i) the Short Term Commitment of such affected Purchaser
under this Short Term Retail PSA or such participation agreement to (ii)
the total of all commitments by such affected Purchaser to its customers of
similar creditworthiness as the Active Seller.
(ii) Upon the occurrence of any Change in Law, each Purchaser
whose Short Term Commitment hereunder is affected by such Change in Law
shall transfer its Short Term Commitment to another branch office (or, if
such Purchaser so elects, to an Affiliate) of such Purchaser, provided that
such transfer shall be made only if such Purchaser shall have determined in
good faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (i) on the basis of existing
circumstances, such transfer will avoid or reduce the additional payments
resulting from such Change in Law and will not result in any additional
costs, liabilities or expenses to such Purchaser (unless the Active Seller
agrees to pay such additional costs, liabilities or expenses of such
Purchaser) and (ii) such transfer is otherwise consistent with the
interests of such Purchaser.
(g) Taxes. (i) In the event that the adoption of any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to the Agent, the Administrative Agent or any
Purchaser under this Short Term Retail PSA, upon notice by such Person to
the Active Seller (with a copy to the Agent) to the effect that (A) as a
result of the adoption of such law, rule, regulation, treaty or directive
or a change therein or in the interpretation thereof, Taxes are being
withheld or deducted from amounts payable to such Person under this Short
Term Retail PSA and (B) such Purchaser has taken all action required to be
taken by it to avoid the imposition of such Taxes pursuant to clause (iii)
below prior to demanding indemnification under this clause (i), the Active
Seller will pay to the Agent for the account of such Person additional
amounts so that such additional amounts, together with amounts otherwise
payable under this Short Term Retail PSA, will yield to such Person, after
deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, the amount stated to be payable under this Short
Term Retail PSA. The term "Taxes" shall mean all net income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, imposed, levied, collected, withheld or assessed by any
country (or by any political subdivision or taxing authority thereof or
therein), excluding, with respect to any Purchaser, net income and
franchise taxes imposed with respect to net income of any country (or any
political subdivision or taxing authority thereof or therein) where such
Person is organized or where such Person's credit commitments are booked.
If the Active Seller fails to pay any Taxes when due following notification
by the Agent, the Administrative Agent or any Purchaser as provided above,
the Active Seller shall indemnify such Person for any incremental taxes,
interest or penalties that may become payable by any such Person as a
result of any such failure by the Active Seller to make such payment.
(ii) Each Purchaser that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver
to the Active Seller and the Agent (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable
form, as the case may be, and (B) an Internal Revenue Service Form W-8 or
W-9 or successor form. Each such Purchaser also agrees to deliver to the
Active Seller and the Agent two further copies of the said Form 1001 or
4224 and Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Active
Seller, and such extensions or renewals thereof as may reasonably be
requested by the Active Seller or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Purchaser from duly completing and delivering any such
form with respect to it and such Purchaser so advises the Active Seller and
the Agent. Such Purchaser shall certify (X) in the case of Form 1001 or
4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (Y)
in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(iii) No Purchaser may request indemnification for any Taxes from
the Active Seller under clause (i) above to the extent that such Taxes
would have been avoided or reduced by such Purchaser's transfer of its
Short Term Commitments affected by such event to another office of such
Purchaser (or to an Affiliate of such Purchaser), by such Purchaser's
properly claiming the benefit of any exemption from or reduction of such
Taxes (whether provided by statute, treaty or otherwise), including,
without limitation, by delivering the forms required by clause (ii) above,
or by such Purchaser's taking any other action which in its judgment is
reasonable to avoid or reduce such Taxes, provided that such Purchaser
shall not be required to (A) take any action which in the reasonable
judgment of such Purchaser could directly or indirectly result in any
increased cost or expense or in any loss of opportunity to such Purchaser
unless the Active Seller shall have provided to such Purchaser indemnity or
reimbursement therefor in form and substance reasonably satisfactory to
such Purchaser or (B) claim or apply any tax credit against such Taxes.
(iv) Within 30 days after the payment by the Active Seller of any
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
the Agent, the Administrative Agent or any Purchaser under this Short Term
Retail PSA and irrespective of whether such Person is entitled to demand
indemnification in respect thereof under clause (i) above, the Active
Seller will furnish to such Person (with a copy to the Agent), the original
or a certified copy of a receipt evidencing payment thereof.
SECTION 11.4 Payment of Expenses; Indemnity. (a) The Servicer
agrees to pay or reimburse the Administrative Agent and the Agent for all
their reasonable and customary out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, or any waiver of, this Short Term
Retail PSA and any other document executed and delivered in connection
herewith, including, without limitation, the fees and disbursements of
counsel to the Administrative Agent and the Agent.
(b) The Servicer agrees to pay, indemnify, and hold each
Purchaser, the Agent and the Administrative Agent harmless from and against
any and all actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever with respect to the execution, delivery,
performance, administration or enforcement of this Short Term Retail PSA
(the "indemnified liabilities"), except with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of such
Person. The agreements in this subsection shall survive repayment of the
Senior Amount and all other amounts payable hereunder.
SECTION 11.5 GOVERNING LAW. THIS SHORT TERM RETAIL PSA SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS SHORT TERM
RETAIL PSA SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.
SECTION 11.6 Notices. All demands, notices, and communications
under this Short Term Retail PSA shall be delivered in accordance with
Section 9.2 of the Short Term RPA.
SECTION 11.7 Severability of Provisions. If any one or more of
the covenants, provisions or terms of this Short Term Retail PSA shall be
for any reason whatsoever held invalid, then such covenants, provisions or
terms shall be deemed severable from the remaining covenants, provisions or
terms of this Short Term Retail PSA, and shall in no way affect the
validity or enforceability of the other provisions of this Short Term
Retail PSA or of the Certificates or the rights of the Holders thereof.
SECTION 11.8 Intention of Parties. (a) The execution and
delivery of this Short Term Retail PSA shall constitute an acknowledgement
by the Sellers, the Agent, the Administrative Agent and each
Certificateholder that they do not intend to establish (for Federal tax
purposes) an association taxable as a corporation. The powers granted and
obligations undertaken in this Short Term Retail PSA shall be construed so
as to further such intent.
(b) It is the intent of the Sellers and the Purchasers that, for
federal, state and local income and franchise tax purposes, the Senior
Certificates will be evidence of indebtedness of the Sellers secured by the
Pooled Property. Each Seller, by entering into this Short Term Retail PSA,
and each Purchaser by the acceptance of its Senior Certificate, agrees to
treat the Senior Certificates for federal, state and local income and
franchise tax purposes as indebtedness of the Sellers, except as otherwise
required by law or any tax authorities.
SECTION 11.9 Counterparts. For the purpose of facilitating the
execution of this Short Term Retail PSA and for other purposes, this Short
Term Retail PSA may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same
instrument.
SECTION 11.10 Survival of Representations and Warranties. All
representations and warranties made herein shall survive the execution and
delivery of this Short Term Retail PSA and the Certificates.
SECTION 11.11 No Petition. Each of the Servicer, the Agent, the
Administrative Agent and each Purchaser hereby covenants and agrees that
such Person shall not at any time institute against any Seller any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any Federal or state bankruptcy or
similar law.
IN WITNESS WHEREOF, the parties have caused this Short Term
Retail PSA to be duly executed and delivered in New York, New York by their
respective officers thereunto duly authorized as of the day and year first
above written.
AMERICAN AUTO RECEIVABLES
COMPANY, as the Initial Seller
By: /s/ John J. Shea
Title: Assistant Treasurer
CHRYSLER CREDIT CORPORATION
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
CHEMICAL BANK, as Agent and
as Administrative Agent
By: /s/ Karen Sager
Title: Vice President
<PAGE>
ANNEX 1 to
the Short Term Retail PSA
SCHEDULE OF
DEFINITIONS
The following words and phrases shall have the following
meanings:
"Accrual Period" means, with respect to any Distribution Date, the
period from and including the preceding Distribution Date (or, with respect
to the initial Accrual Period, from the initial Transfer Date) to but
excluding such Distribution Date.
"Active Seller" means the Seller which became party to the Short Term
Retail PSA last in time.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit A to the Short Term RPA, by which a Purchaser becomes a party to
the Short Term Retail PSA and the Short Term RPA.
"Addition Notice" means, with respect to the transfer of a Receivables
Group to the Purchasers pursuant to Section 2.1 of the Short Term Retail
PSA, notice, which (i) shall be given not later than 10 days prior to the
related Transfer Date, of the Active Seller's designation of such
Receivables Group to be transferred to the Purchasers and (ii) shall
include (A) the aggregate Principal Balance of such Receivables Group and
(B) the Schedule of Anticipated Collections with respect to such
Receivables Group.
"Additional Seller Supplement" shall mean an instrument, substantially
in the form of Exhibit H to the Short Term Retail PSA, by which a Seller
becomes a party to the Short Term Retail PSA and the Short Term RPA.
"Adjusted Weighted Average APR" shall mean, with respect to the
Receivables Group transferred on any Transfer Date, the sum of (i) the
weighted average APR with respect to such Receivables Group and (ii) the
APR Increment designated by the Active Seller on such Transfer Date.
"Advance" means either a Precomputed Advance or Simple Interest
Advance or both, as applicable.
"Affiliate" shall have the meaning assigned in the Short Term RPA.
"Aggregate Commitment" shall mean the "Short Term Aggregate Commitment
Amount" as defined in the Short Term RPA.
"Aggregate Invested Amount" shall mean the "Aggregate Invested Amount"
as defined in the Short Term RPA.
"Aggregate Original Pool Balance" means, with respect to each Transfer
Date, the aggregate Principal Balance of the Receivables Group transferred
on each such date.
"Amortizing Payment" means with respect to each Fixed Value Receivable
and each Collection Period prior to the date on which the Fixed Value
Payment is due, the amount specified on 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 a Seller or purchase by the
Servicer the Amortizing Payment shall be equal to the aggregate "Amount of
Each Payment" which has not yet been paid for the period through and
including the last payment prior to the date when the Fixed Value Payment
is due less the amount of the unearned finance charges under the related
Contract allocable to such amount in accordance with the Servicer's
customary procedures.
"Amount Financed" means (a) with respect to a Standard Receivable the
amount advanced under the Standard Receivable toward the purchase price of
the Financed Vehicle and any related costs, exclusive of any amount
allocable to the premium of force-placed physical damage insurance covering
the Financed Vehicle and (b) with respect to a Fixed Value Receivable the
"Amount Financed" means 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, 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.
"Applicable Senior Percentage" means (i) prior to the Retail
Commitment Termination Date, the Senior Percentage; (ii) otherwise, 100%.
"Applicable Subordinated Percentage" means 100% minus the Applicable
Senior Percentage.
"APR" of a Receivable means the annual rate of finance charges stated
in the related Contract.
"APR Increment" means, with respect to the Receivables Group
transferred on any Transfer Date, the positive number designated by the
Active Seller on such date, which number represents the positive
difference, if any, between (a) the cap strike price set forth in the
related Interest Rate Cap Agreement entered into by the Active Seller on
such Transfer Date and (b) the weighted average APR for such Receivables
Group as set forth in the Schedule of Anticipated Collections delivered in
respect of such date.
"Assignment" shall have the meaning assigned in Section 3.3 of the
Short Term Retail PSA.
"Available Amounts" shall have the meaning specified in Section
5.6(a) of the Short Term Retail PSA and shall be determined by the priority
set forth in such definition.
"Base Rate" shall have the meaning assigned in the Short Term RPA.
"Business Day" shall have the meaning assigned in the Short Term RPA.
"Cap Provider" means each counterparty to an Interest Rate Cap
Agreement, the long-term debt of which is rated at least A by S&P or
Moody's.
"CFC" means Chrysler Financial Corporation, a Michigan corporation.
"CFC Revolving Credit Agreement" shall have the meaning assigned in
the Short Term RPA.
"Certificate" shall mean any Senior Certificate or the Subordinated
Certificate.
"Certificate Account" means the account or accounts established and
maintained as such pursuant to Section 5.1 of the Short Term Retail PSA.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered in the Register.
"Certificate Interest" means interest payable in respect of the
Certificates.
"Certificate Principal" means principal payable in respect of the
Certificates.
"Certificate Rate" for each Accrual Period means the rate per annum
equal to the LIBO Rate applicable to such Accrual Period plus the
Eurodollar Margin, calculated on the basis of the actual number of days
elapsed during such Accrual Period divided by 360; provided that if the
Senior Amount is increased on a day other than a Distribution Date,
interest shall accrue on such increase at the Base Rate for the period from
such day to the day prior to the next succeeding Distribution Date and
shall be calculated on the basis of the actual number of days in such
Accrual Period and a 365/6 day year.
"Collection Account" means the account or accounts established and
maintained as such pursuant to Section 5.1 of the Short Term Retail PSA.
"Collection Period" means each calendar month during the term of the
Short Term Retail PSA.
"Commitment Percentage" shall have the meaning assigned in the Short
Term RPA.
"Commitment Termination Event" shall have the meaning assigned in the
Short Term RPA.
"Commitment Transfer Supplement" shall have the meaning assigned in
the Short Term RPA.
"Computer Tape" means the computer tape generated by the Servicer on
behalf of a Seller which provides information relating to the Receivables.
"Contract" means a motor vehicle retail installment sale contract.
"Cutoff Date" means the last day of the calendar month preceding the
calendar month in which the related Transfer Date occurs.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to CCC under an existing
agreement between such dealer and CCC.
"Default Rate" shall have the meaning assigned in the Short Term RPA.
"Deposit Date" means, with respect to any Collection Period, the
Business Day immediately preceding the related Distribution Date.
"Determination Date" means, with respect to any Distribution Date, the
later of the eighth Business Day and the eleventh calendar day of the
calendar month in which such Distribution Date occurs.
"Distribution Date" means, with respect to each Collection Period, the
fifteenth day of the following month, or if the fifteenth day is not a
Business Day, the next following Business Day.
"Effective Date" shall have the meaning assigned in Section 3.1 of the
Short Term Retail PSA.
"Eligible Institution" means any depository institution or trust
company incorporated under the laws of the United States of America or any
state thereof which is subject to supervision and examination by federal or
state banking or depository institution authorities, or any depository
institution or trust company incorporated under the laws of any foreign
jurisdiction which has a branch or agency located in the United States of
America and which depository institution, trust company or branch (i) is
subject to supervision and examination by federal or state banking or
depository institution authorities and (ii) the commercial paper, if any,
of which has a credit rating from Moody's and S&P of at least P-1 and A-1,
respectively, and the long-term unsecured debt obligations of which have a
credit rating from Moody's and S&P of at least A, in each case at the time
of the investment or contractual commitment to invest therein.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (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 S&P and Moody's 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 S&P
and Moody's in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
of S&P and Moody's in the highest investment category granted thereby
(including funds for which the Trustee (as defined in the Short Term
Wholesale Series Supplement referred to in the Short Term RPA) or any
of its Affiliates is investment manager or advisor);
(e) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC;
(f) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above; and
(g) 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 (i) a depository institution
or trust company (acting as principal) described in clause (b) or
(ii) a depository institution or trust company the deposits of which
are insured by FDIC.
"Eligible Servicer" means a Person which, at the time of its
appointment as subservicer or successor Servicer, (i) is servicing a
portfolio of motor vehicle retail installment sales contracts and/or motor
vehicle loans, (ii) is legally qualified, and has the capacity, to service
the Receivables, (iii) has demonstrated the ability to professionally and
competently service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle loans similar to the Contracts in accordance
with high standards of skill and care, and (iv) is qualified and entitled
to use, pursuant to a license or other written agreement, and agrees, to
the extent set forth in such license or written agreement, to maintain the
confidentiality of, the software which such subservicer or successor
Servicer uses in connection with performing its duties and responsibilities
under the Short Term Retail PSA or obtains rights to use, or develops at
its own expense, its own software which is adequate to perform its duties
and responsibilities under the Short Term Retail PSA.
"Eurodollar Margin" shall have the meaning assigned in the Short Term
RPA.
"Expiration Date" shall mean the "Short Term Commitment Termination
Date" as defined in the Short Term RPA.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable, as the case may
be.
"Fixed Value Payment" means with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount
of Fixed Value Payment" reduced (i) in the case of a prepayment or
repurchase, by the amount of the unearned finance charges under the related
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 II
(which Schedule may be in the form of microfiche), as such Schedule shall
be supplemented to reflect the transfer of each Receivables Group to the
Purchasers pursuant to Section 2.1 of the Short Term Retail PSA, 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 which
is greater than the scheduled monthly payments and is due after payment of
such scheduled monthly payments and which 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 Fixed Value Payment in accordance with certain
conditions.
"Governmental Authority" shall have the meaning assigned in the Short
Term RPA.
"Increased Costs" shall have the meaning specified in Section 11.3 of
the Short Term Retail PSA.
"Insurance Policies" means all comprehensive and collision, fire and
theft insurance policies maintained by the Obligors with respect to the
Financed Vehicles, any credit and disability insurance maintained by the
Obligors and benefitting CCC.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, in respect of
the preceding Collection Period: (a) that portion of all collections on
Receivables (including, in the case of Precomputed Receivables, amounts
withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account) allocable to interest, (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
Repurchase Amount of each Receivable that became a Repurchased Receivable
during such Collection Period to the extent attributable to accrued
interest on such Receivable, (e) Recoveries for such Collection Period,
(f) Investment Earnings for such Distribution Date, (g) amounts payable
under the Interest Rate Cap Agreement on or prior to such Distribution Date
and (h) an amount equal to the aggregate Monthly Yield Account Withdrawals
with respect to such 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 Repurchased
Receivables the Repurchase 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 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.
"Interest Rate Cap Agreement" means each agreement (including
schedules thereto and confirmations delivered thereunder) between each
Active Seller and the Cap Provider named therein, each in a form that shall
be reasonably satisfactory to the Agent.
"Invested Amount" with respect to any Purchaser, at any date of
determination, means the aggregate amounts paid by such Purchaser for its
Senior Certificate less the aggregate amounts of payments distributed as
principal on account of its Senior Certificate.
"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 on such Distribution Date, which earnings
shall be deposited into the Certificate Account on the Deposit Date
preceding such Distribution Date.
"LIBO Rate" shall have the meaning assigned in the Short Term RPA.
"Lien" means a security interest, lien, charge, pledge or encumbrance
of any kind, other than tax liens, mechanics' liens and any liens which
attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source
on a Liquidated Receivable during the Collection Period in which such
Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer in connection with such liquidation and any
amounts required by law to be remitted to the Obligor on such Liquidated
Receivable.
"Long Term Retail PSA": the Long Term Participation and Servicing
Agreement, dated as of May 23, 1994, among the Retail Sellers, CCC, the
Banks, the Agent and the Administrative Agent, substantially in the form of
Exhibit B to the Long Term RPA, as the same may be amended, supplemented or
otherwise modified from time to time.
"Long Term RPA": the Long Term Receivables Purchase Agreement, dated
as of May 23, 1994, among CFC, CCC, the Wholesale Seller, the Retail
Sellers, the Banks, the Agent and the Administrative Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"Minimum Reserve Account Balance" at any date means .75% of the sum of
the Aggregate Original Pool Balance for all Receivables Groups transferred
on or prior to such date, except for any Receivables Group the Receivables
of which have a Principal Balance equal to zero at such date.
"Monthly Yield Account Withdrawal" means, with respect to any
Distribution Date and any then outstanding Receivables Group for which a
Yield Deposit was made on the related Transfer Date, an amount to be
withdrawn from the Yield Account on such date (to the extent of deposits
available therefor), which amount shall equal the product of (a) the APR
Increment in respect of such Receivables Group divided by 12 and (b) the
aggregate Principal Balance of the Receivables included in such Receivables
Group as of the first day of the related Collection Period.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officer's Certificate" means a certificate signed by (a) a
Responsible Officer and (b) a treasurer, assistant treasurer, secretary or
assistant secretary of any Seller, CFC or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to any Seller or the Servicer, which
counsel shall be acceptable to the Agent.
"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
5.4(a) of the Short Term Retail PSA.
"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 5.4(b) of the Short Term Retail PSA.
"Payahead" on 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 5.3 of the Short Term Retail PSA with respect to
such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Short Term Retail PSA.
"Payahead Balance" on a Precomputed Receivable means the sum, as of
the close of business on the last day of a Collection Period, of all
Payaheads made by or on behalf of the Obligor with respect to such
Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable, pursuant to Sections 5.3 and
5.4 of the Short Term Retail PSA.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Pool Balance" as of any date of determination, means the aggregate
Principal Balance of the Receivables (excluding Repurchased Receivables and
Liquidated Receivables) on such date.
"Pooled Property" means (i) the Receivables, (ii) certain monies due
in respect thereof on or after the related Cutoff Date, (iii) funds
deposited in the Trust Accounts, (iv) all of each Seller's rights,
remedies, powers and privileges under the Purchase Agreement and each
Interest Rate Cap Agreement to which it is a party, (v) security interests
in the Financed Vehicles securing the Receivables and (vi) any proceeds
from claims on the Insurance Policies.
"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 Receivable pursuant to Section 5.4(a) of
the Short Term Retail PSA.
"Precomputed Receivable" means any Receivable 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 are monthly
actuarial receivables.
"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, which Scheduled Payments shall have been made by or
on behalf of the related Obligor, 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 Repurchase 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 Repurchase
Amount with respect to the Simple Interest Receivable allocable to
principal.
"Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication,
in respect of the preceding Collection Period: (a) that portion of all
collections on Receivables (including, with respect to Precomputed
Receivables, amounts withdrawn from the Payahead Account but excluding
amounts deposited into the Payahead Account) allocable to principal,
(b) Liquidation Proceeds attributable to the principal amount of
Receivables which became Liquidated Receivables during such Collection
Period in accordance with the Servicer's customary servicing procedures,
plus the amount of Realized Losses with respect to such Liquidated
Receivables, (c) all Precomputed Advances made by the Servicer of principal
due on the Precomputed Receivables, (d) to the extent attributable to
principal, the Repurchase Amount of each Receivable that became a
Repurchased 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 Obligor as of the date of the original
contract and only to the extent not included under clause (a) above and
(f) on the Distribution Date immediately preceding the Scheduled Maturity
Date, any amounts advanced by the Servicer on such Distribution Date with
respect to principal on the Receivables; provided, however, that in
calculating the 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 Repurchased Receivables the Repurchase Amount
of which has been included in the Principal Distribution Amount in a prior
Collection Period and (iv) Recoveries.
"Purchase" shall have the meaning specified in Section 2.1 of the
Short Term Retail PSA.
"Purchase Agreement" means the Short Term Purchase and Sale Agreement
between CFC, as seller, and each Seller, as buyer, substantially in the
form of Exhibit D to the Short Term Retail PSA, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms of the Short Term Retail PSA.
"Purchase Commitment" means with respect to any Purchaser and with
respect to a Purchase on any Transfer Date, the product of (a) such
Purchaser's Commitment Percentage and (b) the aggregate Purchase Price of
the Receivables sold on such date, which amount such Purchaser shall pay to
make such Purchase.
"Purchase Percentage" as to any Purchaser on any date of determination
means the percentage of the Senior Amount represented by the Senior
Certificate or Senior Certificates held by such Purchaser on such date of
determination.
"Purchase Price" means on any Transfer Date the product of (a) one
minus the Subordinated Percentage and (b) the aggregate Principal Balance
of the Receivables Group being transferred on such date.
"Realized Losses" means the excess of the Principal Balance of any
Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"Reallocated Payments" shall have the meaning assigned in Section
5.7(c) of the Short Term Retail PSA.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 2.7 of the
Short Term Retail PSA.
"Receivables Group" means with respect to any Transfer Date the
Standard Receivables and Fixed Value Receivables transferred to the
Purchasers pursuant to Section 2.1 of the Short Term Retail PSA, which
shall be listed on Schedules II and III, respectively.
"Record Date" means, in respect of each Accrual Period, the last day
of each calendar month.
"Recoveries" means, with respect to any Liquidated Receivable, monies
collected in respect thereof, from whatever source, during any Collection
Period following the Collection Period in which such Receivable became a
Liquidated Receivable, net of the sum of any amounts expended by the
Servicer for the account of the Obligor and any amounts required by law to
be remitted to the Obligor.
"Related Property" means the collective reference to the property
referred to in clauses (ii) through (vi) of the definition of Pooled
Property.
"Repurchase Amount" means the amount, as of the close of business on
the last day of a Collection Period, required to prepay in full the
respective Receivable under the terms thereof, including interest thereon
which shall accrue through the date of such repurchase.
"Repurchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant
to Section 4.7 of the Short Term Retail PSA or by the Seller pursuant to
Section 2.6 of the Short Term Retail PSA.
"Required Purchasers" means "Required Banks", as defined in the Short
Term RPA.
"Requirement of Law" shall have the meaning assigned in the Short Term
RPA.
"Reserve Account" means the account established and maintained as such
pursuant to Sections 5.1 and 5.7 of the Short Term Retail PSA.
"Reserve Account Deposit" means with respect to each Transfer Date an
amount equal to the difference, if any, between the Minimum Reserve Account
Balance and the Specified Reserve Account Balance, in each case, as of such
date.
"Reset Date" with respect to any Accrual Period means the Distribution
Date following the last day of such Accrual Period.
"Responsible Officer" shall have the meaning assigned in the Short
Term RPA.
"Retail Commitment Termination Date" shall mean the earliest to occur
of (i) a Retail Portfolio Termination Event or (ii) a Commitment
Termination Event.
"Retail Portfolio Termination Event" shall have the meaning assigned
in the Short Term RPA.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, or its successor.
"Schedule of Anticipated Collections" means, with respect to a
Receivables Group transferred on any Transfer Date, a schedule,
substantially in the form of Exhibit J to the Short Term Retail PSA and
delivered along with the related Addition Notice, on which the Servicer
will set forth (i) the scheduled payments of principal and interest in
respect of such Receivables Group (assuming a prepayment rate on the
Receivables included in such Receivables Group of an amount equal to the
product of (a) 1.1% per month and (b) the aggregate Principal Balance of
the Receivables included in such Receivables Group as of the first day of
the related Collection Period), (ii) the weighted average APR with respect
to such Receivables Group and (iii) the Yield Deposit, if any, to be
deposited by the Servicer in the Yield Account with respect to such
Receivables Group on such date.
"Scheduled Maturity Date" means the Distribution Date falling in the
66th month following the Expiration Date.
"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" has the meaning assigned in the preamble.
"Seller Addition Date" shall have the meaning assigned in Section 3.2
of the Short Term Retail PSA.
"Seller Subordinated Note" means, with respect to any Transfer Date, a
note, substantially in the form of Exhibit G to the Short Term Retail PSA,
executed by the Active Seller and delivered to CFC pursuant to the Purchase
Agreement, which note shall represent monies borrowed by the Active Seller
from CFC from time to time to fund the purchase of Receivables by the
Active Seller from CFC pursuant to the Purchase Agreement.
"Senior Amount" at any date of determination means the aggregate
amounts paid by the Purchasers for the Senior Certificates less the
aggregate amount of payments distributed as principal on account of the
Senior Certificates.
"Senior Certificate" means a certificate executed by the Seller and
delivered to a Purchaser, substantially in the form of Exhibit A to the
Short Term Retail PSA.
"Senior Certificate Supplement" shall mean an instrument,
substantially in the form of Exhibit I to the Short Term Retail PSA, by
which a Seller becomes a party to the Senior Certificate.
"Senior Percentage" means, as of any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the Senior Amount as of
the last day of the related Collection Period and the denominator of which
is the Pool Balance as of the last day of the related Collection Period.
"Service Default" means an event specified in Section 9.1 of the Short
Term Retail PSA.
"Servicer" means CCC in its capacity as Servicer of the Receivables,
and each successor to CCC (in the same capacity) pursuant to Sections 8.4
and 9.2 of the Short Term Retail PSA.
"Servicer's Certificate" has the meaning specified in Section 4.9 of
the Short Term Retail PSA.
"Servicing Fee" with respect to a Collection Period means the fee
payable to the Servicer for services rendered during such Collection Period
pursuant to Section 4.8 of the Short Term Retail PSA.
"Shortfall" means on any Distribution Date the amount, if any, by
which the amounts required to be distributed on such date to the Purchasers
as interest or principal exceeds Available Amounts as calculated on such
date.
"Shortfall Interest" shall have the meaning assigned in Section 5.6(a)
of the Short Term Retail PSA.
"Short Term Commitment" shall have the meaning assigned in the Short
Term RPA.
"Short Term Commitment Termination Date" shall have the meaning
assigned in the Short Term RPA.
"Short Term Retail PSA" means the Short Term Participation and
Servicing Agreement, dated as of May 23, 1994, among CCC, the Purchasers,
the Sellers, the Agent and the Administrative Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"Short Term RPA" means the Short Term Receivables Purchase Agreement,
dated as of the date hereof, among the Sellers, CCC, CFC, the Purchasers,
the Agent and the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"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 5.4(b) of the Short Term Retail PSA.
"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 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" at any date of determination means
the amount on deposit in the Reserve Account at the close of business of
such day.
"Standard Receivable" means any receivable for which the related
Contract provides that fixed level monthly payments be made by the Obligor
thereunder for the entire term of such Contract; each such Standard
Receivable shall be listed on Schedule I (which Schedule may be in the form
of microfiche), as such Schedule shall be amended to reflect the transfer
of any subsequent Receivables Group to the Purchasers pursuant to Section
2.1 of the Short Term Retail PSA.
"Subordinated Certificate" means the certificate executed and held by
the Seller, substantially in the form of Exhibit B to the Short Term Retail
PSA, which certificate represents an interest in the Pooled Property equal
to the difference, at any date, between the Pool Balance and the Senior
Amount, each as of such date.
"Subordinated Percentage" at any date means 9%; provided that on any
Transfer Date the Subordinated Percentage with respect to any Receivables
Group purchased on or after such date shall be adjusted upwards (without
duplication) as follows: if, for any three-month rolling period, Realized
Losses as a percentage of CCC's total collections and Realized Losses on
its entire retail installment sales contracts portfolio (including sold and
unsold contracts) exceeds (i) 2.75%, the Subordinated Percentage shall be
increased by .75%, (ii) 3.50%, the Subordinated Percentage shall be
increased by 1.50% and (iii) 4.25%, the Subordinated Percentage shall be
increased by 2.25%.
"Transfer Date" means any date on which Receivables are to be
transferred to the Purchasers pursuant to Section 2.1 of the Short Term
Retail PSA.
"Transferred Property" shall have the meaning assigned to it in the
Purchase Agreement.
"Trust Account" shall have the meaning specified in Section 5.1 of the
Short Term Retail PSA.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
"Yield Account" means the account established and maintained as such
pursuant to Section 5.1 of the Short Term Retail PSA.
"Yield Deposit" means, with respect to the Receivables Group
transferred on any Transfer Date, a cash deposit of the Active Seller in
the Yield Account on such Transfer Date in an amount equal to (a) the sum
of all beginning monthly principal balances (as set forth in the Schedule
of Anticipated Collections delivered immediately prior to such Transfer
Date) multiplied by (b) the APR Increment divided by (c) 12.
Exhibit 10-G
CONFORMED COPY
===========================================================================
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
and
MANUFACTURERS AND TRADERS TRUST COMPANY
Trustee
SHORT TERM BANK SUPPLEMENT
Dated as of May 23, 1994
to
POOLING AND SERVICING AGREEMENT
Dated as of May 31, 1991
CARCO AUTO LOAN MASTER TRUST
SHORT TERM BANK SERIES
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Creation of the Short Term Bank Series Certificates. . . . . 1
SECTION 1.1. Designation. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Definitions. . . . . . . . . . . . . . . 2
SECTION 2.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
The Short Term Bank Series Certificates. . . . . . . . 2
SECTION 3.1. Purchases of the Short Term Bank Series
Certificates . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.2. Procedure for Increasing the Invested Amount . . . . . . . 3
SECTION 3.3. Procedure for Decreasing the Invested Amount . . . . . . . 4
SECTION 3.4. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.5. Indemnification by Seller. . . . . . . . . . . . . . . . . 4
SECTION 3.6. Pro Rata Payments. . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.7. Changes in Bank Group. . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
Servicing Fee . . . . . . . . . . . . . . 6
SECTION 4.1. Servicing Compensation . . . . . . . . . . . . . . . . . . 6
ARTICLE V
Rights of Short Term Bank Series Certificateholders and
Allocation and Application of Collections . . . . . . . 6
SECTION 5.1. Allocations; Payments to Seller; Excess
Principal Collections and Unallocated
Principal Collections. . . . . . . . . . . . . . . . . 6
SECTION 5.2. Determination of Monthly Interest . . . . . . . . . . . . 8
SECTION 5.3. Determination of Monthly Principal. . . . . . . . . . . . 9
SECTION 5.4. Establishment of Reserve Account. . . . . . . . . . . . . 10
SECTION 5.5. Deficiency Amount . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.6. Application of Bank Non-Principal
Collections, Available Seller
Non-Principal Collections, and
Available Bank Principal Collections . . . . . . . . . 11
SECTION 5.7. Application of Reserve Account and
Available Subordinated Amount. . . . . . . . . . . . . 13
SECTION 5.8. Investor Charge-offs. . . . . . . . . . . . . . . . . . . 15
SECTION 5.9. Excess Servicing. . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.10. Excess Principal Collections. . . . . . . . . . . . . . . 15
ARTICLE VI
Distributions and Reports . . . . . . . . . . . 15
SECTION 6.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2. Daily Reports. . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.3. Periodic Reports . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
Additional Early Amortization Events. . . . . . . . . 17
SECTION 7.1. Additional Early Amortization Events . . . . . . . . . . . 17
SECTION 7.2. Notice of Early Amortization Event . . . . . . . . . . . . 18
ARTICLE VIII
Change In Circumstances. . . . . . . . . . . . 18
SECTION 8.1. Reemployment Costs . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.2. Inability to Determine LIBO Rate . . . . . . . . . . . . . 19
SECTION 8.3. Illegality . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.4. Increased Costs. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.5. Changes in Capital Requirements. . . . . . . . . . . . . . 21
SECTION 8.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.7. Section 8 Costs. . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IX
Optional Repurchase. . . . . . . . . . . . . 24
SECTION 9.1. Optional Repurchase. . . . . . . . . . . . . . . . . . . . 24
ARTICLE X
Final Distributions. . . . . . . . . . . . . 25
SECTION 10.1. Sale of Certificateholders' Interest
Pursuant to Section 2.03 of the
Wholesale PSA; Distributions, Pursuant to
Section 9.1 of this Short Term Supplement or
Section 2.03 or 12.02(c) of the
Wholesale PSA. . . . . . . . . . . . . . . . . . . . . 25
SECTION 10.2. Distribution of Proceeds of Sale,
Disposition or Liquidation of the
Receivables Pursuant to Section 9.02
of the Wholesale PSA . . . . . . . . . . . . . . . . . 25
ARTICLE XI
Miscellaneous Provisions. . . . . . . . . . . . 26
SECTION 11.1. Ratification of Wholesale PSA . . . . . . . . . . . . . . 26
SECTION 11.2. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.3. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.4. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.5. Successors and Assigns. . . . . . . . . . . . . . . . . . 27
SECTION 11.6. Physical Certificates . . . . . . . . . . . . . . . . . . 27
SECTION 11.7. Rights of Certificateholder . . . . . . . . . . . . . . . 27
SECTION 11.8. Certificate Transfer Restrictions . . . . . . . . . . . . 27
SECTION 11.9. Trustee's Communications. . . . . . . . . . . . . . . . . 28
ARTICLE XII
COVENANTS, REPRESENTATIONS AND WARRANTIES . . . . . . . 28
SECTION 12.1. Representations and Warranties of the
Seller and the Servicer. . . . . . . . . . . . . . . . 28
SECTION 12.2. Covenants of the Servicer . . . . . . . . . . . . . . . . 28
ARTICLE XIII
CONDITIONS PRECEDENT. . . . . . . . . . . . . 29
SECTION 13.1. Conditions Precedent to
Effectiveness of Short Term Supplement . . . . . . . . 29
SECTION 13.2. Conditions Precedent to Increase. . . . . . . . . . . . . 30
ANNEXES
I Definitions
EXHIBITS
A Form of Short Term Bank Series Certificate
B Form of Distribution Date Statement
C Form of Daily Report
D-1 Form of Monthly Certificateholders'
Statement (Revolving Period)
D-2 Form of Monthly Certificateholders' Statement
(Early Amortization Period)
E Forms of Effective Date Opinion
F Forms of Undertaking Letters
<PAGE>
SHORT TERM BANK SUPPLEMENT dated as of May 23, 1994 (the "Short
Term Supplement"), among U.S. AUTO RECEIVABLES COMPANY, a Delaware
corporation, as Seller, CHRYSLER CREDIT CORPORATION, a Delaware
corporation, as Servicer, MANUFACTURERS AND TRADERS TRUST COMPANY, a New
York banking corporation, as Trustee (the "Trustee"), the several banks
parties to this Short Term Supplement as of the Effective Date
(collectively, the "Initial Short Term Bank Series Certificateholders" and,
individually, an "Initial Short Term Bank Series Certificateholder"), the
other financial institutions from time to time parties hereto as
certificateholders and CHEMICAL BANK, a New York banking corporation, as
agent for the Short Term Bank Series Certificateholders (in such capacity,
the "Agent"), and as administrative agent (in such capacity, the
"Administrative Agent").
Pursuant to the Pooling and Servicing Agreement dated as of May
31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO") to the
Seller on August 8, 1991 (as assigned, amended and supplemented, the
"Wholesale PSA"), among the Seller, the Servicer and the Trustee, CARCO has
created and assigned to the Seller its interests in the CARCO Auto Loan
Master Trust (the "Trust"). Section 6.03 of the Wholesale PSA provides
that the Seller may from time to time direct the Trustee to issue, on
behalf of the Trust, one or more new Series of Investor Certificates
representing fractional undivided interests in the Trust. The Principal
Terms of any new Series are to be set forth in a Short Term Supplement to
the Wholesale PSA.
Pursuant to this Short Term Supplement, the Seller and the
Trustee shall create a new Series of Investor Certificates and specify the
Principal Terms thereof.
The Seller, the Short Term Bank Series Certificateholders, the
Servicer, Chrysler Financial Corporation ("CFC"), American Auto Receivables
Company, the Agent, and the Administrative Agent have entered into a Short
Term Receivables Purchase Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Short
Term RPA"), pursuant to which the parties hereto agreed to enter into this
Short Term Supplement.
ARTICLE I
Creation of the Short Term Bank Series Certificates
SECTION 1.1. Designation. (a) There is hereby created a Series
of Investor Certificates to be issued pursuant to the Wholesale PSA and
this Short Term Supplement to be known as the "Revolving Certificates,
Short Term Bank Series" (the "Short Term Bank Series Certificates").
(b) In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained
in the Wholesale PSA, the terms and provisions of this Short Term
Supplement shall govern. ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED
HEREIN ARE DEFINED IN THE WHOLESALE PSA. All Article, Section or
subsection references herein shall mean Article, Section or subsections of
this Short Term Supplement, except as otherwise provided herein.
ARTICLE II
Definitions
SECTION 2.1. Definitions. (a) The capitalized terms used
herein which are defined in or by reference in Annex I hereto shall have
the meanings specified therein.
(b) The definitions in Annex I 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.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Short Term Supplement shall refer to this
Short Term Supplement as a whole and not to any particular provision of
this Short Term Supplement; and the term "including" means "including
without limitation".
ARTICLE III
The Short Term Bank Series Certificates
SECTION 3.1. Purchases of the Short Term Bank Series
Certificates. (a) Subject to the terms and conditions of this Short Term
Supplement, each Initial Short Term Bank Series Certificateholder hereby
severally agrees (i) to purchase from the Trust on the Effective Date a
Short Term Bank Series Certificate for an amount equal to such Initial
Short Term Bank Series Certificateholder's Commitment Percentage of the
Initial Aggregate Bank Invested Amount and (ii) to maintain, in accordance
with the provisions of this Short Term Supplement, an interest in the
Trust, subject to increase or decrease during the Revolving Period, equal
to such Short Term Bank Series Certificateholder's Commitment Percentage of
the Aggregate Bank Invested Amount.
(b) Subject to the terms and conditions of this Short Term
Supplement, each Purchasing Bank hereby severally agrees to maintain, in
accordance with the provisions of this Short Term Supplement, an interest
in the Trust, subject to increase or decrease during the Revolving Period,
equal to such Short Term Bank Series Certificateholder's Commitment
Percentage of the Aggregate Bank Invested Amount.
SECTION 3.2. Procedure for Increasing the Invested Amount. (a)
Subject to subsection 2.3 of the Short Term RPA and subsections 3.2(b) and
13.2 hereof, on any Business Day during the Revolving Period, the Invested
Amount may be increased by increasing the Bank Invested Amount of each
Short Term Bank Series Certificateholder (an "Increase"), up to an amount
not exceeding such Short Term Bank Series Certificateholder's Short Term
Commitment, upon the request of the Seller on behalf of the Trust (each
date on which an increase in the Invested Amount occurs hereunder being
herein referred to as the "Increase Date" applicable to such Increase);
provided that the Servicer shall have given the Administrative Agent
irrevocable written notice (effective upon receipt) of such request
pursuant to subsection 2.3 of the Short Term RPA, and provided, further,
that no more than one Increase shall be made during any calendar month.
(b) The Short Term Bank Series Certificateholders shall not
increase their respective Bank Invested Amounts on any Increase Date
hereunder if:
(i) the Seller shall not have increased the Available
Subordinated Amount to an amount greater than or equal to the Required
Available Subordinated Amount (after giving effect to such Increase);
(ii) the related Increase Amount is less than $100,000,000;
(iii) after giving effect to the Increase, the Aggregate Invested
Amount would exceed the Aggregate Commitment (determined as of the
date the notice of such Increase is given);
(iv) an Early Amortization Event or an event which, with the
passage of time or the giving of notice, would be an Early
Amortization Event has occurred and is continuing;
(v) after giving effect to the Increase, the Aggregate Bank
Invested Amount would exceed the Wholesale Short Term Bank Series
Certificate Sublimit;
(vi) after giving effect to the Increase, the Required
Participation Amount would exceed the Pool Balance at such time;
(vii) the conditions precedent set forth in subsection 4.3 of the
Short Term RPA and subsection 13.2 hereof shall not have been
satisfied;
(viii) if such Increase takes place prior to the Distribution Date
occurring in the calendar month such Increase is made, the Seller
shall not have deposited in the Collection Account an amount (a
"Pre-Accrual Period Deposit") equal to the Daily Base Rate Interest
Expense estimated by the Administrative Agent to accrue with respect
to such Increase for the period from the date of such Increase to such
Distribution Date; or
(ix) any "Event of Default" under and as defined in the CFC
Revolving Credit Agreement has occurred and is continuing.
(c) Payment by the Short Term Bank Series Certificateholders in
respect of any Increase shall be made to the Administrative Agent pursuant
to subsection 2.3 of the Short Term RPA.
SECTION 3.3. Procedure for Decreasing the Invested Amount. On
any Distribution Date during the Revolving Period, upon request of the
Seller on behalf of the Trust, the Aggregate Bank Invested Amount may be
reduced (a "Decrease") by the distribution to the Administrative Agent on
behalf of the Short Term Bank Series Certificateholders of some or all of
Available Bank Principal Collections on such Distribution Date; provided
that the Servicer shall have given the Administrative Agent written notice
(effective upon receipt) prior to 12:00 Noon (New York City time) two
Business Days prior to the date of such Decrease stating the amount of such
Decrease and provided, further, that such Decrease shall be in an amount
equal to or greater than $25,000,000. The Available Subordinated Amount
shall simultaneously be reduced to an amount equal to the Required
Available Subordinated Amount after giving effect to such Decrease.
SECTION 3.4. Interest. Interest shall be payable on the Short
Term Bank Series Certificates on each Distribution Date pursuant to
subsection 5.6. Calculations of per annum rates and fees under this Short
Term Supplement shall be made on the basis of (a) a 360-day year for actual
days elapsed with respect to interest payments calculated based on the LIBO
Rate and (b) a 365- (or 366-, as the case may be) day year for actual days
elapsed with respect to other interest payments and fees. Each
determination of the LIBO Rate hereunder by the Agent shall be conclusive
and binding upon each of the parties hereto in the absence of manifest
error. Any change in monthly interest payable hereunder resulting from a
change in the Base Rate shall become effective as of the opening of
business on the day on which such change is announced.
SECTION 3.5. Indemnification by Seller. The Seller hereby
agrees to pay, and to indemnify and hold harmless, the Administrative
Agent, the Agent, each Short Term Bank Series Certificateholder and the
Trustee and each officer, director and employee thereof from (a) all
claims, disputes, damages, penalties and losses arising from the
Receivables or the underlying collateral (including any product
warranty-related claims, but excluding credit losses), (b) any taxes which
may at any time be asserted in respect of this transaction or the subject
matter thereof (including, without limitation, any sales, gross receipts,
general corporation, personal property, privilege or license taxes, but not
including taxes imposed upon the Agent, the Administrative Agent, any such
Short Term Bank Series Certificateholder or the Trustee with respect to its
income arising out of this transaction and imposed in any jurisdiction) and
(c) costs, expenses and reasonable counsel fees in defending against the
same, whether arising by reason of the acts to be performed by the Seller
or the Servicer hereunder or imposed against the Agent, the Administrative
Agent, any Short Term Bank Series Certificateholder, the Trustee or any
officer, director or employee thereof, or the Seller, the property involved
or otherwise. Notwithstanding any provision of this Short Term Supplement
to the contrary, any amounts payable by the Seller pursuant to this Section
3.5 shall be paid by the Seller only to the extent of Excess Servicing
available to the Seller pursuant to Section 5.9(b)(ii).
SECTION 3.6. Pro Rata Payments. All payments to be made by the
Short Term Bank Series Certificateholders pursuant to this Short Term
Supplement shall be made by each Short Term Bank Series Certificateholder
of record on such date, pro rata, based upon the Commitment Percentage of
such Short Term Bank Series Certificateholder.
SECTION 3.7. Changes in Bank Group. Any "Bank" which becomes a
party to the Short Term RPA pursuant to subsection 2.9 thereof shall become
a Short Term Bank Series Certificateholder party hereto by executing a New
Bank Supplement in accordance with said subsection 2.9. Any Short Term
Bank Series Certificateholder which increases its Short Term Commitment
pursuant to subsection 2.9 of the Short Term RPA shall execute a Short Term
Commitment Increase Supplement in accordance with said subsection 2.9.
Upon receipt of a copy of any such Supplement, the Seller shall execute,
and the Trustee shall authenticate, a Short Term Bank Series Certificate
for such new Short Term Bank Series Certificateholder or such Short Term
Bank Series Certificateholder which increases its Short Term Commitment,
provided that any Short Term Bank Series Certificateholder increasing its
Short Term Commitment shall surrender its Short Term Bank Series
Certificate to the Trustee or provide the Trustee with a certificate of a
responsible officer of such Short Term Bank Series Certificateholder that
such Short Term Bank Series Certificate has been stolen, lost or destroyed
and provide the Trustee with such security or indemnity as may be required
by it to save it harmless.
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation. The monthly servicing fee
(the "Monthly Servicing Fee") shall be payable to the Servicer, in arrears,
on each Distribution Date in respect of any Collection Period (or portion
thereof) occurring prior to the earlier of the first Distribution Date
following the Termination Date and the first Distribution Date on which the
Invested Amount is zero, in an amount equal to one-twelfth of the product
of (a) the Servicing Fee Rate, (b) the Pool Balance as of the last day of
the Collection Period second preceding such Distribution Date and (c) the
Short Term Bank Series Allocation Percentage with respect to the
immediately preceding Collection Period. The share of the Monthly
Servicing Fee allocable to the Short Term Bank Series Certificateholders
with respect to any Distribution Date (the "Certificateholders Monthly
Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the Aggregate Bank Invested Amount as of the
last day of the Collection Period second preceding such Distribution Date.
The remainder of the Monthly Servicing Fee shall be paid by the Seller and
in no event shall the Trust, the Trustee or the Short Term Bank Series
Certificateholders be liable for the share of the Monthly Servicing Fee to
be paid by the Seller; and the remainder of the Servicing Fee shall be paid
by the Seller and the Investor Certificateholders of other Series and the
Short Term Bank Series Certificateholders shall in no event be liable for
the share of the Servicing Fee to be paid by the Seller or the Investor
Certificateholders of other Series. The Certificateholders Monthly
Servicing Fee shall be payable to the Servicer solely to the extent amounts
are available for distribution in accordance with the terms of this Short
Term Supplement.
ARTICLE V
Rights of Short Term Bank Series Certificateholders and
Allocation and Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections. (a) Collections of
Non-Principal Receivables and Principal Receivables, Miscellaneous Payments
and Defaulted Amounts allocated to Short Term Bank Series pursuant to
Article IV of the Wholesale PSA shall be allocated and distributed as set
forth in this Article.
(b) The Servicer shall instruct the Trustee to withdraw from the
Collection Account and pay to the Seller on the dates set forth below the
following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Non-Principal
Collections deposited in the Collection Account for such Deposit
Date; and
(B) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Principal Collections
deposited in the Collection Account for such Deposit Date, if the
Seller's Participation Amount (determined after giving effect to
any Principal Receivables transferred to the Trust on such
Deposit Date) exceeds the Trust Available Subordinated Amount for
the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date immediately following such
Determination Date); and
(ii) on each Deposit Date with respect to the Revolving Period,
an amount equal to the Available Seller's Principal Collections for
such Deposit Date, if the Seller's Participation Amount (determined
after giving effect to any Principal Receivables transferred to the
Trust on such Deposit Date) exceeds the Trust Available Subordinated
Amount for the immediately preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such
Determination Date); provided, however, that Available Seller's
Principal Collections shall be paid to the Seller with respect to any
Collection Period only after an amount equal to the sum of (A) the
Deficiency Amount, if any, relating to the immediately preceding
Collection Period and (B) the excess, if any, of the Reserve Account
Required Amount over the amount in the Reserve Account on the
immediately preceding Distribution Date (after giving effect to the
allocations of, distributions from, and deposits in, the Reserve
Account on such Distribution Date), has been deposited in the
Collection Account for the benefit of the Short Term Bank Series from
such Available Seller's Principal Collections.
The withdrawals to be made from the Collection Account pursuant
to this Section 5.1(b) do not apply to deposits into the Collection Account
that do not represent Collections, including Miscellaneous Payments,
payment of the purchase price for the Certificateholders' Interest pursuant
to Section 2.03 of the Wholesale PSA, payment of the purchase price for the
Short Term Bank Series Certificateholders Interest pursuant to Section 9.1
of this Short Term Supplement and proceeds from the sale, disposition or
liquidation of Receivables pursuant to Section 9.02 or 12.02 of the
Wholesale PSA.
(c) The Servicer shall instruct the Trustee to withdraw from the
Collection Account and deposit into the Reserve Account on Deposit Dates
with respect to the Revolving Period Available Seller's Principal
Collections for such Deposit Date, up to the amount of the excess, if any,
determined pursuant to Section 5.1(b)(ii)(B).
SECTION 5.2. Determination of Monthly Interest. (a)(i) The
amount of monthly interest ("Monthly Interest") with respect to the Short
Term Bank Series Certificates on any Distribution Date shall be an amount
equal to the sum of (A) with respect to that portion of the Aggregate Bank
Invested Amount allocated to the LIBO Tranche, an amount equal to the
product of (I) the number of days in the preceding Accrual Period divided
by 360, (II) the sum of the LIBO Rate applicable to the LIBO Tranche for
the Accrual Period with respect to such Distribution Date and the
Eurodollar Margin, and (III) the portion of the Aggregate Bank Invested
Amount allocable to the LIBO Tranche as of the close of business on the
preceding Distribution Date (after giving effect to all distributions of
Monthly Principal on such preceding Distribution Date) and (B) with respect
to that portion of the Aggregate Bank Invested Amount not allocated to the
LIBO Tranche, an amount ("Monthly Base Rate Interest") equal to the sum of
each Daily Base Rate Interest Expense determined by the Administrative
Agent for each day of the Accrual Period with respect to such Distribution
Date, provided, however, if any Increase shall be made during the period
from and including the first calendar day of any month to but excluding the
Distribution Date occurring during such month, the amount of Daily Base
Rate Interest Expense calculated with respect to such Increase during such
period shall not be included in the Monthly Interest determined for the
Accrual Period with respect to such Distribution Date, but instead shall be
included in the Monthly Interest determined for the Accrual Period with
respect to the next succeeding Distribution Date.
(ii) In the event the Base Rate changes during the period between
any Determination Date and the following Distribution Date and a portion of
the Aggregate Bank Invested Amount is not allocated to the LIBO Tranche,
the Servicer and the Administrative Agent shall cooperate on the date of
such change in modifying the Distribution Date Statement to reflect the
adjustment in the Monthly Interest for the then current Accrual Period
caused by such change and any consequent adjustments, including adjustment
to the Deficiency Amount, if any. Any such modification, including any
adjustment to the Deficiency Amount shall be completed by 10:00 a.m. on
such Distribution Date.
(b) On the Determination Date preceding each Distribution Date,
the Servicer shall determine the amount, if any (the "Interest Shortfall"),
by which (i) the Monthly Interest for the Accrual Period with respect to
such Distribution Date is greater than (ii) the amount which will be
available to be distributed to the Short Term Bank Series
Certificateholders on such Distribution Date in respect thereof pursuant to
this Short Term Supplement. If the Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("Additional
Interest") equal to the product of (A) the number of days in the related
Accrual Period divided by 365 (or 366, as determined in accordance with
subsection 3.4), (B) the Default Rate and (C) such Interest Shortfall (or
the portion thereof which has not been paid to the Short Term Bank Series
Certificateholders) shall be payable as provided herein with respect to the
Short Term Bank Series Certificates on each Distribution Date following
such Distribution Date to and including, the Distribution Date on which
such Interest Shortfall is paid to Short Term Bank Series Certificate-
holders. Notwithstanding anything to the contrary herein, Additional
Interest shall be payable or distributed to the Short Term Bank Series
Certificateholders only to the extent permitted by applicable law.
(c) On each Distribution Date the Seller may, subject to
subsection 5.2(d), elect to allocate or continue to allocate all or any
part of the Aggregate Bank Invested Amount to the LIBO Tranche by giving
the Administrative Agent irrevocable written or telephonic (confirmed in
writing) notice thereof, which notice must be received by the
Administrative Agent prior to 12:00 Noon (New York City time) three
Business Days prior to such Distribution Date. Such notice shall specify
(i) the applicable Distribution Date, (ii) the date of the succeeding
Distribution Date and (iii) the portion of the Aggregate Bank Invested
Amount being allocated to the LIBO Tranche. Promptly upon receipt of each
such notice the Administrative Agent shall notify each Short Term Bank
Series Certificateholder of the contents thereof. If the Administrative
Agent shall not have received timely notice as aforesaid with respect to
all or any portion of the Aggregate Bank Invested Amount, the Monthly
Interest on the Aggregate Bank Invested Amount for the succeeding Accrual
Period shall be calculated by reference to the Base Rate.
(d) Anything contained in this Section 5.2 to the contrary
notwithstanding, (i) the portion of the Aggregate Bank Invested Amount
allocable to the LIBO Tranche must be an amount equal to $50,000,000 or an
integral multiple of $1,000,000 in excess thereof and (ii) after the
occurrence and during the continuance of any Early Amortization Event, the
Seller may not elect to allocate all or any portion of the Aggregate Bank
Invested Amount to the LIBO Tranche.
SECTION 5.3. Determination of Monthly Principal. The amount of
monthly principal ("Monthly Principal") distributable with respect to the
Short Term Bank Series Certificates on each Distribution Date with respect
to an Early Amortization Period shall be equal to the sum of (i) the
Available Bank Principal Collections with respect to such Distribution Date
and (ii) the Available Seller's Principal Collections allocated pursuant to
subsection 5.7(d)(ii); provided, however, that Monthly Principal shall not
exceed the Aggregate Bank Invested Amount.
SECTION 5.4. Establishment of Reserve Account. The Servicer,
for the benefit of the Short Term Bank Series Certificateholders, shall
cause to be established and maintained in the name of the Trust an Eligible
Deposit Account (the "Reserve Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Short Term Bank Series Certificateholders. On the Effective Date, the
Seller shall cause to be deposited in the Reserve Account the Initial
Reserve Account Deposit Amount. The Trustee shall possess all right, title
and interest in all funds from time to time on deposit in, and all Eligible
Investments credited to, the Reserve Account and in all proceeds thereof.
The Reserve Account shall be under the sole dominion and control of the
Trustee for the benefit of the Short Term Bank Series Certificateholders.
If, at any time, the Reserve Account ceases to be an Eligible Deposit
Account, the Servicer shall establish a substitute Eligible Deposit Account
as the Reserve Account, transfer any cash and/or any Eligible Investments
to such new Reserve Account and from the date any such substitute account
is established, such account shall be the "Reserve Account". Neither the
Seller nor the Servicer, nor any person or entity claiming by, through or
under the Seller or Servicer, shall have any right, title or interest in,
or any right to withdraw any amount from, the Reserve Account, except as
expressly provided herein. Pursuant to the authority granted to the
Servicer in Section 3.01 of the Wholesale PSA, the Servicer shall have the
power, revocable by the Trustee, to instruct the Trustee to make
withdrawals and payments from the Reserve Account for the purposes of
carrying out the Servicer's or the Trustee's duties specified in the
Wholesale PSA and this Short Term Supplement.
All Eligible Investments in the Reserve Account shall be held by
the Trustee for the benefit of the Short Term Bank Series
Certificateholders. Funds on deposit in the Reserve Account shall at the
direction of the Servicer be invested by the Trustee solely in Eligible
Investments that will mature so that such funds will be available at the
close of business on or before the Business Day next preceding the
following Distribution Date (or on or before 10:00 a.m. on such following
Distribution Date in the case of Eligible Investments in respect of which
the Trustee is the obligor). As of each Determination Date, all interest
and other investment earnings (net of losses and investment expenses) on
funds on deposit in the Reserve Account received with respect to such
Determination Date shall be credited to the Collection Account for the
benefit of the Short Term Bank Series (together with earnings on the
Pre-Accrual Period Deposit and an amount equal to the Short Term Bank
Series Allocation Percentage of the interest and other investment earnings
on funds held in the Collection Account credited to the Collection Account
pursuant to Section 4.02 of the Wholesale PSA with respect to such
Determination Date, "Investment Proceeds"). Schedule 1, which is hereby
incorporated into and made part of this Short Term Supplement, identifies
the Reserve Account by setting forth the account number of such account,
the account designation of such account and the name of the institution
with which such account has been established. If a substitute Reserve
Account is established pursuant to this Section, the Servicer shall provide
to the Trustee an amended Schedule 1, setting forth the relevant
information for such substitute Reserve Account.
SECTION 5.5. Deficiency Amount. With respect to each
Distribution Date, on the related Determination Date, the Servicer shall
determine the amount (the "Deficiency Amount"), if any, by which (a) the
sum of (i) Monthly Interest for such Distribution Date, (ii) any Monthly
Interest previously due but not distributed to the Short Term Bank Series
Certificateholders on a prior Distribution Date, (iii) Additional Interest,
if any, for such Distribution Date and any Additional Interest previously
due but not distributed to the Short Term Bank Series Certificateholders on
a prior Distribution Date, (iv) the Certificateholders Monthly Servicing
Fee for such Distribution Date, (v) the Investor Default Amount, if any,
for such Distribution Date, (vi) the amount of Investor Charge-Offs which
have not previously been reimbursed, (vii) the Short Term Bank Series
Allocation Percentage of the amount of any Adjustment Payment required to
be deposited in the Collection Account pursuant to Section 3.09(a) of the
Wholesale PSA with respect to the related Collection Period that has not
been so deposited as of such Determination Date and (viii) any Section 8
Costs, exceeds (b) the sum of (i) Bank Non-Principal Collections and
Available Seller Non-Principal Collections deposited in the Collection
Account during the Collection Period preceding such Distribution Date plus
any Investment Proceeds plus any Pre-Accrual Period Deposit made during the
Accrual Period preceding the Accrual Period with respect to such
Distribution Date plus (ii) the amount of funds in the Reserve Account
which are available pursuant to Section 5.7(a) to cover any portion of the
Deficiency Amount. The lesser of the Deficiency Amount and the Available
Subordinated Amount on the related Determination Date shall be the
"Required Subordination Draw Amount".
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller Non-Principal Collections, and Available Bank Principal
Collections. The Servicer shall cause the Trustee to apply, on each
Distribution Date, Bank Non-Principal Collections, Available Seller
Non-Principal Collections, Investment Proceeds and Available Bank Principal
Collections to make the following distributions:
(a) On each Distribution Date, an amount equal to the sum of
Bank Non-Principal Collections, Available Seller Non-Principal
Collections and any Investment Proceeds will with respect to the
preceding Collection Period and any Pre-Accrual Period Deposit made
during the Accrual Period preceding the Accrual Period with respect to
such Distribution Date be distributed in the following priority:
(i) an amount equal to Monthly Interest for such
Distribution Date, plus the amount of any Monthly Interest
previously due but not distributed to the Short Term Bank Series
Certificateholders on a prior Distribution Date, plus the amount
of any Additional Interest for such Distribution Date and any
Additional Interest previously due but not distributed to the
Short Term Bank Series Certificateholders on a prior Distribution
Date, shall be distributed to the Short Term Bank Series
Certificateholders;
(ii) an amount equal to the Certificateholders Monthly
Servicing Fee for such Distribution Date shall be distributed to
the Servicer;
(iii) an amount equal to the Investor Default Amount for such
Distribution Date shall be treated as a portion of Bank Principal
Collections for such Distribution Date;
(iv) an amount equal to the aggregate amount of Investor
Charge-Offs which have not previously been reimbursed shall be
treated as a portion of Bank Principal Collections for such
Distribution Date;
(v) an amount equal to the sum of (A) Section 8 Costs for
such Distribution Date and (B) any Section 8 Costs not paid on
any preceding Distribution Date shall be paid to the Agent for
the account of the applicable Short Term Bank Series
Certificateholders; and
(vi) the balance, if any, shall constitute Excess Servicing
and shall be allocated and distributed as set forth in Section
5.9.
(b) (i) On each Distribution Date during the Revolving Period
with respect to which the Seller has notified the Administrative Agent
a Decrease will occur, an amount of Available Bank Principal
Collections deposited in the Collection Account for the related
Collection Period equal to such Decrease will be distributed to the
Administrative Agent to be distributed by the Administrative Agent for
the ratable benefit of the Short Term Bank Series Certificateholders.
The Aggregate Bank Invested Amount shall be reduced by the amount of
Available Bank Principal Collections so distributed. Any such
remaining Available Bank Principal Collections shall be treated as
Excess Principal Collections and applied in accordance with Section
4.04 of the Wholesale PSA.
(ii) On each Distribution Date during the Revolving Period
with respect to which the Servicer has not notified the Administrative
Agent it will be making a Decrease an amount equal to any remaining
Available Bank Principal Collections shall be treated as Excess
Principal Collections and applied in accordance with Section 4.04 of
the Wholesale PSA.
(c) On each Distribution Date with respect to an Early
Amortization Period, an amount equal to the sum of (i) Available Bank
Principal Collections and (ii) Available Seller's Principal
Collections allocated pursuant to subsection 5.7(d)(ii) will be
distributed in the following priority: (i) an amount equal to Monthly
Principal for such Distribution Date shall be distributed to the
Administrative Agent for the ratable benefit of the Short Term Bank
Series Certificateholders and (ii) after giving effect to the
distribution referred to in clause (i), an amount equal to the
balance, if any, of such Available Bank Principal Collections shall be
treated as Excess Principal Collections and applied in accordance with
Section 4.04 of the Wholesale PSA.
SECTION 5.7. Application of Reserve Account and Available
Subordinated Amount. (a) If the portion of Bank Non-Principal
Collections, Available Seller's Non-Principal Collections, any Pre-Accrual
Period Deposit and Investment Proceeds allocated to the Short Term Bank
Series Certificateholders on any Distribution Date pursuant to Section
5.6(a) is not sufficient to make the entire distributions required on such
Distribution Date by Section 5.6(a)(i) through (v), the Servicer shall
cause the Trustee to withdraw funds from the Reserve Account to the extent
available therein, and apply such funds to complete the distributions
pursuant to Section 5.6(a)(i) through (v).
(b) If there is a Required Subordination Draw Amount for such
Distribution Date, the Servicer shall apply or cause the Trustee to apply
the Available Seller's Principal Collections on deposit in the Collection
Account on such Distribution Date, but only up to the amount of the
Required Subordination Draw Amount, to make the distributions required by
Section 5.6(a)(i) through (v) that have not been made through the
application of funds from the Reserve Account in accordance with the
preceding paragraph. Any such Available Seller's Principal Collections
remaining after the application thereof pursuant to the preceding sentence
shall be treated as a portion of Bank Principal Collections for such
Distribution Date, but only up to the amount of unpaid Adjustment Payments
allocated to the Short Term Bank Series as described in Section
5.5(a)(vii). The amount of the Available Seller's Principal Collections
applied in accordance with the two preceding sentences shall reduce the
Available Subordinated Amount as described in clause (c) of the definition
thereof. If the Required Subordination Draw Amount exceeds Available
Seller's Principal Collections for such Distribution Date, the Available
Subordinated Amount shall be further reduced by the amount of such excess,
but not by more than the sum of (x) the Investor Default Amount and (y) the
amount of unpaid Adjustment Payments allocated to the Short Term Bank
Series as described in Section 5.5(a)(vii).
(c) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Account made pursuant to Section 13.2,
Sections 5.1(c), 5.4, and Section 5.7(a) and (d), (i) during the Revolving
Period, the amount in the Reserve Account is greater than the Reserve
Account Required Amount for the related Distribution Date, the Servicer
shall cause the Trustee to distribute such excess amount to the Seller;
provided that the Seller's Participation Amount (determined after giving
effect to any Principal Receivables transferred to the Trust on such
Distribution Date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date or (ii) the amount in the Reserve
Account is less than such Reserve Account Required Amount, then the Trustee
shall deposit any remaining Available Seller's Principal Collections on
deposit in the Collection Account for such Distribution Date into the
Reserve Account until either (x) the amount in the Reserve Account is equal
to such Reserve Account Required Amount (and the Available Subordinated
Amount shall be reduced by the amount of Available Seller's Principal
Collections so applied) or (y) the Available Subordinated Amount shall have
been reduced to the Required Available Subordinated Amount. On the
Termination Date, any funds in the Reserve Account will be treated as
Available Bank Principal Collections. After the earlier of the payment in
full of the Aggregate Bank Invested Amount and the Termination Date, any
funds remaining on deposit in the Reserve Account shall be paid to the
Seller.
(d) The balance of Available Seller's Principal Collections on
any Distribution Date, after giving effect to any distributions thereof
pursuant to paragraph (b) of this Section 5.7 shall (i) during the
Revolving Period, be distributed to the Seller; provided that the Seller's
Participation Amount (determined after giving effect to any Principal
Receivables transferred to the Trust on such Distribution Date) exceeds the
Trust Available Subordinated Amount for the immediately preceding
Determination Date and (ii) during an Early Amortization Period, be treated
as a portion of Bank Principal Collections and distributed pursuant to
Section 5.6(c).
SECTION 5.8. Investor Charge-offs. If, on any Distribution Date
on which the Available Subordinated Amount on the preceding Determination
Date (after giving effect to the allocations, distributions, withdrawals
and deposits to be made on such Distribution Date) is zero and the
Deficiency Amount for such Distribution Date is greater than zero, the
Aggregate Bank Invested Amount shall be reduced by the amount of the excess
of such Deficiency Amount over any remaining Available Subordinated Amount
on such Determination Date, but not by more than the Investor Default
Amount. Investor Charge-Offs shall thereafter be reimbursed and the
Aggregate Bank Invested Amount increased (but not by an amount in excess of
the aggregate Investor Charge-Offs) on any Distribution Date by the sum of
(a) Allocable Miscellaneous Payments with respect to such Distribution Date
and (b) any amounts allocated and available for that purpose pursuant to
Section 5.6(a)(iv).
SECTION 5.9. Excess Servicing. The Servicer shall cause the
Trustee to apply, on each Distribution Date, Excess Servicing with respect
to such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the Reserve Account Deposit Amount (after
giving effect to any application of Available Seller's Principal
Collections pursuant to Section 5.7(b)) for such Distribution Date
shall be deposited in the Reserve Account; and
(b) the balance, if any, (i) for any Distribution Date during an
Early Amortization Period, shall be treated as a portion of Bank
Principal Collections and (ii) for any Distribution Date during the
Revolving Period, shall be distributed to the Seller.
SECTION 5.10. Excess Principal Collections. That portion of
Excess Principal Collections for any Distribution Date equal to the amount
of Short Term Bank Series Allocable Excess Principal Collections for such
Distribution Date will be allocated to the Short Term Bank Series and will
be distributed as set forth in this Short Term Supplement.
ARTICLE VI
Distributions and Reports
SECTION 6.1. Distributions. (a) On each Distribution Date with
respect to a Collection Period during which the Aggregate Bank Invested
Amount was greater than zero at any time, at the direction of the Servicer
the Trustee shall distribute to the Administrative Agent on behalf of each
Short Term Bank Series Certificateholder of record on the preceding Record
Date (other than as provided in Section 12.02 of the Wholesale PSA
respecting a final distribution) all amounts specified in Article V and
promptly thereafter the Administrative Agent shall make available to each
Short Term Bank Series Certificateholder pursuant to subsection 2.7 of the
Short Term RPA an amount equal to the product of (i) the amount to be
distributed to the Short Term Bank Series Certificateholders pursuant to
Article V and (ii) such Short Term Bank Series Certificateholder's
Commitment Percentage.
(b) All allocations and distributions hereunder shall be in
accordance with the Distribution Date Statement delivered by the Servicer
to the Trustee pursuant to subsection 6.3 and shall be made in lawful money
of the United States and in immediately available funds.
(c) The final distribution on the Short Term Bank Series
Certificates will be made only upon presentation and surrender of the Short
Term Bank Series Certificates by the Administrative Agent to the Trustee.
Each Short Term Bank Series Certificateholder agrees to deliver, on or
prior to the scheduled date of such distribution, its Short Term Bank
Series Certificate to the Administrative Agent for presentation and
surrender to the Trustee pursuant to the preceding sentence.
SECTION 6.2. Daily Reports. On each Business Day when the
Aggregate Bank Invested Amount is greater than zero, the Servicer shall
provide the Administrative Agent and the Trustee with a Daily Report. The
Administrative Agent shall make copies of the Daily Report available to the
Short Term Bank Series Certificateholders at their reasonable request at
the Administrative Agent's office in New York City.
SECTION 6.3. Periodic Reports. (a) Distribution Date
Statements. On each Determination Date with respect to a Collection Period
during which the Aggregate Bank Invested Amount was greater than zero at
any time, the Servicer shall deliver to the Trustee and the Administrative
Agent a Distribution Date Statement. The Trustee shall be entitled to rely
on each Distribution Date Statement to determine the Aggregate Bank
Invested Amount. The Administrative Agent shall forward a copy of each
such Distribution Date Statement to any Short Term Bank Series
Certificateholder upon request by such Short Term Bank Series
Certificateholder.
(b) Monthly Certificateholders' Statement. On each Distribution
Date with respect to a Collection Period during which the Aggregate Bank
Invested Amount was greater than zero at any time, the Servicer shall
deliver to the Trustee and the Administrative Agent, and the Administrative
Agent shall forward to each Short Term Bank Series Certificateholder, a
Monthly Certificateholders' Statement.
(c) Annual Certificateholders' Tax Statement. On or before
January 31 of each calendar year (or such earlier date as required by
applicable law) following a calendar year during which the Aggregate Bank
Invested Amount was greater than zero at any time, the Servicer on behalf
of the Trustee shall furnish, or cause to be furnished, to each Person who
at any time during the preceding calendar year was a Short Term Bank Series
Certificateholder, a statement prepared by the Servicer containing the
aggregate amount distributed to such Person for such calendar year or the
applicable portion thereof during which such Person was a Short Term Bank
Series Certificateholder, together with such other information as is
required to be provided by an issuer of indebtedness under the Internal
Revenue Code and such other customary information as the Trustee or the
Servicer deems necessary or desirable to enable the Short Term Bank Series
Certificateholders to prepare their tax returns. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Internal Revenue Code as from time to
time in effect.
(d) Early Amortization Period Notices. Upon the occurrence of
an Early Amortization Event, the Seller or the Servicer, as the case may
be, shall give prompt written notice thereof to the Trustee and the
Administrative Agent. The Administrative Agent shall give notice thereof
to each Short Term Bank Series Certificateholder. In addition, the
Servicer shall give the Administrative Agent written notice of the
occurrence and nature of an Early Amortization Event with respect to any
other series which is not an Early Amortization Event with respect to the
Short Term Bank Series.
ARTICLE VII
Additional Early Amortization Events
SECTION 7.1. Additional Early Amortization Events.
The occurrence of any of the following events shall, immediately upon the
occurrence thereof without notice or other action on the part of the
Trustee or the Short Term Bank Series Certificateholders, be deemed to be
an Early Amortization Event solely with respect to Short Term Bank Series:
(a) on any Determination Date, the ratio of (i) the aggregate
Allocable Defaulted Amount for the three preceding Collection Periods
to (ii) the aggregate Allocable Principal Collections deposited in the
Collection Account for the three preceding Collection Periods exceeds
.75%;
(b) on any Determination Date, the Available Subordinated Amount
(after giving effect to all reductions with respect thereto on the
related Distribution Date) will be reduced to less than the Required
Available Subordinated Amount;
(c) any Service Default with respect to the Short Term Bank
Series occurs;
(d) on any Determination Date, as of the last day of the
Collection Period with respect thereto, the aggregate amount of
Principal Receivables relating to used Vehicles exceeds 20% of the
Pool Balance on such day;
(e) on any six consecutive Distribution Dates any Interest
Coverage Shortfall exists;
(f) failure on the part of the Seller, the Servicer or CCC, as
applicable, to deliver any Daily Report or Monthly Certificateholders'
Statement within five Business Days of the date such report or
statement must be delivered hereunder;
(g) on any four consecutive Distribution Dates both (i) any
Interest Coverage Shortfall exists and (ii) the amount on deposit in
the Reserve Account is less than the Reserve Account Trigger Amount;
(h) on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods is less than
20%; and
(i) any Commitment Termination Event occurs or the Short Term
Commitments shall terminate.
SECTION 7.2. Notice of Early Amortization Event. The Trustee
shall not be deemed to have knowledge of the occurrence of any Early
Amortization Event unless the Trustee shall have received written notice
describing such Early Amortization Event and stating that such notice is a
"notice of Early Amortization Event."
ARTICLE VIII
Change In Circumstances
SECTION 8.1. Reemployment Costs. The Seller agrees to indemnify
each Short Term Bank Series Certificateholder and to hold each Short Term
Bank Series Certificateholder harmless from any loss or expense, including
any such loss or expense arising from interest or fees payable by such
Short Term Bank Series Certificateholder to lenders of funds obtained by it
to purchase or maintain that portion of its Bank Invested Amount hereunder
with respect to which Monthly Interest is determined by reference to the
LIBO Rate as a consequence of (a) default by the Seller in the performance
of its obligations hereunder or under the Wholesale PSA, (b) the occurrence
of a Service Default or an event which would, with the giving of notice or
the passage of time, constitute a Service Default, (c) the occurrence of an
event referred to in Section 8.2 or 8.3, (d) default by the Seller in
selling an Increase in the Aggregate Bank Invested Amount on an Increase
Date after having given notice of such Increase, or (e) any reduction of
the LIBO Tranche prior to the termination of the Accrual Period for such
LIBO Tranche. A certificate as to any additional amounts payable pursuant
to the foregoing sentence submitted by any Short Term Bank Series
Certificateholder to the Seller shall be conclusive absent manifest error.
This covenant shall survive termination of this Short Term Supplement and
the Wholesale PSA.
SECTION 8.2. Inability to Determine LIBO Rate. In the event
that (a) the Agent determines (which determination shall be conclusive and
binding upon the Short Term Bank Series Certificateholders) that quotations
of interest rates for the relevant deposits referred to in the definition
of "LIBO Rate" are not being provided in the relevant amounts or for the
relevant maturities for the purposes of determining rates of interest for
the LIBO Tranche hereunder as provided herein, or (b) the Required Short
Term Bank Series Certificateholders determine (which determination shall be
conclusive and binding upon the Short Term Bank Series Certificateholders)
and shall notify the Agent that the rates of interest referred to in the
definition of "LIBO Rate" as the basis upon which the rate of interest for
the LIBO Tranche hereunder is to be determined do not adequately cover the
cost to the Short Term Bank Series Certificateholders of making or
maintaining their investments in Short Term Bank Series Certificates at
such time as any of the Aggregate Bank Invested Amount is allocated to the
LIBO Tranche, the Agent shall forthwith give telex or telecopy notice of
such determination, confirmed in writing, to the Seller and the Trustee,
whereupon until the Agent notifies the Seller and the Trustee that the
circumstances giving rise to such notice no longer exist, none of the
Aggregate Bank Invested Amount shall be allocated to the LIBO Tranche.
SECTION 8.3. Illegality. Notwithstanding any other provision
herein, if any law, regulation, treaty or directive, or any change therein
or in the interpretation or application thereof, shall make it unlawful for
any Short Term Bank Series Certificateholder to purchase or maintain its
interest in its Short Term Bank Series Certificate in any LIBO Tranche and
such Short Term Bank Series Certificateholder shall notify the
Administrative Agent, the Agent, the Trustee and the Seller, then interest
payable in respect of the portion of each LIBO Tranche applicable to such
Short Term Bank Series Certificateholder shall thereafter be calculated by
reference to the Base Rate. If any such change in the method of
calculating interest occurs on a day which is not the last day of the
Accrual Period with respect to any LIBO Tranche, the Seller shall pay to
the Agent for the account of such Short Term Bank Series Certificateholder
the amounts, if any, as may be required pursuant to Section 8.1.
SECTION 8.4. Increased Costs. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Short Term Bank
Series Certificateholder with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority enacted or made subsequent to the date hereof:
(A) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Short Term Bank Series
Certificateholder; or
(B) does or shall impose on such Short Term Bank Series
Certificateholder any other condition;
and the result of any of the foregoing is to increase the cost to such
Short Term Bank Series Certificateholder of purchasing or maintaining its
portion of the Short Term Bank Series Certificateholders' Interest
hereunder (such increase in cost, "Increased Costs"), then, in any such
case, the Seller shall promptly pay to the Agent for the account of such
Short Term Bank Series Certificateholder, upon the written demand of such
Short Term Bank Series Certificateholder to the Seller (with a copy to the
Agent), so long as such Increased Costs are not otherwise included in the
amounts required to be paid to such Short Term Bank Series
Certificateholder pursuant to any other paragraph under this Section 8, any
additional amounts necessary to compensate such Short Term Bank Series
Certificateholder for such Increased Costs which such Short Term Bank
Series Certificateholder deems to be material as determined by such Short
Term Bank Series Certificateholder. If a Short Term Bank Series
Certificateholder becomes entitled to claim any additional amounts pursuant
to this Section 8.4, it shall promptly notify the Seller, through the
Agent, of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by a Short Term Bank Series Certificateholder, through
the Agent, to the Seller shall be conclusive in the absence of manifest
error.
(b) Upon the occurrence of any of the events specified in
subsections 8.3 or 8.4(a), each Short Term Bank Series Certificateholder
whose Commitments are affected by any such event agrees that it will
transfer such Commitments affected by any such event to another branch
office (or, if such Short Term Bank Series Certificateholder so elects, to
an Affiliate) of such Short Term Bank Series Certificateholder, provided
that such transfer shall be made only if such Short Term Bank Series
Certificateholder shall have determined in good faith (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) that, (a) on the basis of then existing circumstances, such
transfer will avoid such events and will not result in any additional
costs, liabilities or expenses to such Short Term Bank Series
Certificateholder, to the Seller or to the Trust and (b) such transfer is
otherwise consistent with the interests of such Short Term Bank Series
Certificateholder.
SECTION 8.5. Changes in Capital Requirements. (i) In the event
that, in the opinion of counsel for any Short Term Bank Series
Certificateholder (which may, in the discretion of such Short Term Bank
Series Certificateholder, be such Short Term Bank Series
Certificateholder's internal counsel), compliance with any law, rule,
regulation or guideline, or any change therein or in the interpretation or
application thereof or compliance by any Short Term Bank Series
Certificateholder with any request or directive (whether or not having the
force of law) from any central bank or Governmental Authority enacted or
made subsequent to the date hereof shall affect the amount of capital
required or expected to be maintained by such Short Term Bank Series
Certificateholder or any corporation controlling such Short Term Bank
Series Certificateholder and the amount of such capital that is required or
expected to be maintained is increased by or based upon the Commitments of
such Short Term Bank Series Certificateholder under this Short Term
Supplement or the Wholesale PSA or any participation agreement entered into
pursuant to subsection 9.6 of the Short Term RPA, as applicable (such
event, a "Change in Law"), such affected Short Term Bank Series
Certificateholder shall notify the Seller and the Agent within 90 days
after such affected Short Term Bank Series Certificateholder shall first be
required to comply with such Change in Law. At the time of such
notification such affected Short Term Bank Series Certificateholder shall
provide the Seller with a written statement setting forth the amount that
would adequately compensate such affected Short Term Bank Series
Certificateholder for the costs associated with its compliance with such
Change in Law and setting forth in reasonable detail the assumptions upon
which such affected Short Term Bank Series Certificateholder calculated
such amount, and a copy of the opinion of counsel referred to in the
preceding sentence. Such affected Short Term Bank Series Certificateholder
shall allocate to the Seller the costs associated with such Change in Law
in such a way that the proportion of (i) such costs that are allocated to
the Seller to (ii) the total of such costs of such affected Short Term Bank
Series Certificateholder associated with such Change in Law as it relates
to all commitments of such Short Term Bank Series Certificateholder to its
customers of similar creditworthiness as the Seller, is substantially the
same as the proportion of (i) the aggregate Commitments of such affected
Short Term Bank Series Certificateholder under this Short Term Supplement
or the Wholesale PSA or such participation agreement to (ii) the total of
all commitments by such affected Short Term Bank Series Certificateholder
to its customers of similar creditworthiness as the Seller.
(ii) Upon the occurrence of any Change in Law, each Short Term
Bank Series Certificateholder whose Commitment hereunder is affected by
such Change in Law shall transfer its Commitment to another branch office
(or, if such Short Term Bank Series Certificateholder so elects, to an
Affiliate) of such Short Term Bank Series Certificateholder, provided that
such transfer shall be made only if such Short Term Bank Series
Certificateholder shall have determined in good faith (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) that, (i) on the basis of then existing circumstances, such
transfer will avoid or reduce the additional payments resulting from such
Change in Law and will not result in any additional costs, liabilities or
expenses to such Short Term Bank Series Certificateholder (unless the
Seller agrees to pay such additional costs, liabilities or expenses of such
Short Term Bank Series Certificateholder), the Seller or the Trust and (ii)
such transfer is otherwise consistent with the interests of such Short Term
Bank Series Certificateholder.
SECTION 8.6. Taxes. (a) In the event that the adoption of any
law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to the Agent, the Administrative Agent or any Short
Term Bank Series Certificateholder under this Wholesale PSA, upon notice by
such Person to the Seller (with a copy to the Agent) to the effect that (i)
as a result of the adoption of such law, rule, regulation, treaty or
directive or a change therein or in the interpretation thereof, Taxes are
being withheld or deducted from amounts payable to such Person under this
Wholesale PSA and (ii) such Short Term Bank Series Certificateholder has
taken all action required to be taken by it to avoid the imposition of such
Taxes pursuant to clause (c) below prior to demanding indemnification under
this clause (a), the Seller will pay to the Agent for the account of such
Person additional amounts so that such additional amounts, together with
amounts otherwise payable under this Wholesale PSA, will yield to such
Person, after deduction from such increased amount of all Taxes required to
be withheld or deducted therefrom, the amount stated to be payable under
this Wholesale PSA. The term "Taxes" shall mean all net income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, imposed, levied, collected, withheld or assessed by any
country (or by any political subdivision or taxing authority thereof or
therein), excluding, with respect to any Short Term Bank Series
Certificateholder, net income and franchise taxes imposed with respect to
net income by any country (or any political subdivision or taxing authority
thereof or therein) where such Person is organized or where such Person's
credit commitments are booked. If the Seller fails to pay any Taxes when
due following notification by the Agent, the Administrative Agent or any
Short Term Bank Series Certificateholder as provided above, the Seller
shall indemnify such Person for any incremental taxes, interest or
penalties that may become payable by any such Person as a result of any
such failure by the Seller to make such payment.
(b) Each Short Term Bank Series Certificateholder that is not
incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to the Seller and the Agent (i) two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224 or successor applicable form, as the case may be, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor form. Each such
Short Term Bank Series Certificateholder also agrees to deliver to the
Seller and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Seller,
and such extensions or renewals thereof as may reasonably be requested by
the Seller or the Agent, unless in any such case an event (including any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Short Term Bank Series
Certificateholder from duly completing and delivering any such form with
respect to it and such Short Term Bank Series Certificateholder so advises
the Seller and the Agent. Such Short Term Bank Series Certificateholder
shall certify (i) in the case of Form 1001 or 4224, that it is entitled to
receive payments under this Wholesale PSA without deduction or withholding
of any United States federal income taxes and (ii) in the case of a Form
W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax.
(c) No Short Term Bank Series Certificateholder may request
indemnification for any Taxes from the Seller under clause (a) above to the
extent that such Taxes would have been avoided or reduced by such Short
Term Bank Series Certificateholder's transfer of its Commitments affected
by such event to another office of such Short Term Bank Series
Certificateholder (or to an Affiliate of such Short Term Bank Series
Certificateholder), by such Short Term Bank Series Certificateholder's
properly claiming the benefit of any exemption from or reduction of such
Taxes (whether provided by statute, treaty or otherwise), including by
delivering the forms required by clause (b) above, or by such Short Term
Bank Series Certificateholder's taking any other action which in its
judgment is reasonable to avoid or reduce such Taxes, provided that such
Short Term Bank Series Certificateholder shall not be required to (i) take
any action which in the reasonable judgment of such Short Term Bank Series
Certificateholder could directly or indirectly result in any increased cost
or expense or in any loss of opportunity to such Short Term Bank Series
Certificateholder unless the Seller shall have provided to such Short Term
Bank Series Certificateholder indemnity or reimbursement therefor in form
and substance reasonably satisfactory to such Short Term Bank Series
Certificateholder or (ii) claim or apply any tax credit against such Taxes.
(d) Within 30 days after the payment by the Seller of any
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
the Agent, the Administrative Agent or any Short Term Bank Series
Certificateholder under this Wholesale PSA and irrespective of whether such
Person is entitled to demand indemnification in respect thereof under
clause (a) above, the Seller will furnish to such Person (with a copy to
the Agent), the original or a certified copy of a receipt evidencing
payment thereof.
SECTION 8.7. Section 8 Costs. Notwithstanding any provision of
this Short Term Supplement to the contrary, Section 8 Costs shall be paid
by the Seller only to the extent of funds available therefor pursuant to
subsection 5.6(a)(v).
ARTICLE IX
Optional Repurchase
SECTION 9.1. Optional Repurchase. (a) On any Distribution Date
occurring during an Early Amortization Period on which the Aggregate Bank
Invested Amount on such date is less than or equal to 10% of the Aggregate
Bank Invested Amount as of the last day of the Revolving Period, the Seller
shall have the option to purchase the entire Short Term Bank Series
Certificateholders' Interest, at a purchase price equal to the Reassignment
Amount for such Distribution Date.
(b) The Seller shall give the Servicer, the Administrative
Agent, the Agent and the Trustee at least three Business Days prior written
notice of the Distribution Date on which the Seller intends to exercise
such purchase option. Not later than 12:00 noon, New York City time, on
such Distribution Date the Seller shall deposit the Reassignment Amount
into the Collection Account in immediately available funds. Such purchase
option is subject to payment in full of the Reassignment Amount. The
Reassignment Amount shall be distributed as set forth in Section 10.1(b).
ARTICLE X
Final Distributions
SECTION 10.1. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Wholesale PSA; Distributions, Pursuant to Section 9.1
of this Short Term Supplement or Section 2.03 or 12.02(c) of the Wholesale
PSA. (a) The amount to be paid by the Seller with respect to Short Term
Bank Series in connection with a purchase of the Certificateholders'
Interest pursuant to Section 2.03 of the Wholesale PSA shall equal the
Reassignment Amount for the Distribution Date on which such repurchase
occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 9.1 of this Short Term Supplement or
Section 2.03 of the Wholesale PSA or any Termination Proceeds deposited
into the Collection Account pursuant to Section 12.02(c) of the Wholesale
PSA, the Trustee shall, not later than 12:00 noon, New York City time, on
the Distribution Date on which such amounts are deposited (or, if such date
is not a Distribution Date, on the immediately following Distribution Date)
(in the priority set forth below) (i) distribute the amount deposited, up
to the Reassignment Amount, to Short Term Bank Series Certificateholders
and (ii) pay the remainder of any Termination Proceeds to the Seller.
(c) Notwithstanding anything to the contrary in this Short Term
Supplement or the Wholesale PSA, any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Wholesale PSA with respect to Short Term Bank Series.
SECTION 10.2. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to Section 9.02 of the Wholesale
PSA. (a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to Section 9.02(b) of the
Wholesale PSA, the Trustee shall (in the following priority and, in each
case, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date) deduct an amount equal to the Aggregate
Bank Invested Amount on such Distribution Date from the portion of the
Insolvency Proceeds allocated to Allocable Principal Collections and
distribute such amount to the Short Term Bank Series Certificateholders
provided that the amount of such distribution shall not exceed the product
of (x) the portion of the Insolvency Proceeds allocated to Allocable
Principal Collections and (y) 100% minus the Excess Seller's Percentage
with respect to the related Collection Period. The remainder of the
portion of the Insolvency Proceeds allocated to Allocable Principal
Collections shall be allocated to the Seller's Interest and shall be
released to the Seller on such Distribution Date.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall (in the following priority and, in
each case, after giving effect to any deposits and distributions otherwise
to be made on such Distribution Date) deduct an amount equal to the sum of
(i) Monthly Interest for such Distribution Date, (ii) any Monthly Interest
previously due but not distributed to the Short Term Bank Series
Certificateholders on a prior Distribution Date and (iii) the amount of
Additional Interest, if any, for such Distribution Date and any Additional
Interest previously due but not distributed to the Short Term Bank Series
Certificateholders on a prior Distribution Date, from the portion of the
Insolvency Proceeds allocated to Allocable Non-Principal Collections and
distribute such amount to the Short Term Bank Series Certificateholders
provided that the amount of such distribution shall not exceed (x) the
product of (A) the portion of the Insolvency Proceeds allocated to
Allocable Non-Principal Collections and (B) 100% minus the Excess Seller's
Percentage. The remainder of the portion of the Insolvency Proceeds
allocated to Allocable Non-Principal Collections shall be allocated to the
Seller's Interest and shall be released to the Seller on such Distribution
Date.
(c) Notwithstanding anything to the contrary in this Short Term
Supplement or the Wholesale PSA, any distribution made pursuant to this
Section shall be deemed to be a final distribution pursuant to Section
12.02 of the Wholesale PSA with respect to Short Term Bank Series.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Ratification of Wholesale PSA. As supplemented by
this Short Term Supplement, the Wholesale PSA is in all respects ratified
and confirmed and the Wholesale PSA as so supplemented by this Short Term
Supplement shall be read, taken and construed as one and the same
instrument.
SECTION 11.2. Counterparts. This Short Term Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 11.3. GOVERNING LAW. THIS SHORT TERM SUPPLEMENT 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 11.4. Notices. All notices, requests and demands to or
upon any of the Seller, the Servicer, the Administrative Agent, the Agent
or the Short Term Bank Series Certificateholders shall be delivered in
accordance with Section 9.2 of the Short Term RPA.
SECTION 11.5. Successors and Assigns. (a) This Short Term
Supplement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
(b) Any Short Term Bank Series Certificateholder may sell
participations in its Bank Invested Amount or sell all or a portion of its
rights and obligations hereunder in accordance with the terms hereof and
Section 9.6 of the Short Term RPA.
SECTION 11.6. Physical Certificates. Section 6.08 of the
Wholesale PSA shall not apply to the Short Term Bank Series Certificates
and upon original issuance the Short Term Bank Series Certificates shall be
Registered Certificates in definitive form.
SECTION 11.7. Rights of Certificateholder. The Short Term Bank
Series Certificates represent a beneficial interest in the Trust only and
do not represent any interest in or obligation of the Seller. The Short
Term Bank Series Certificates shall not represent any interest in any
Series Account or Enhancement for the benefit of any other Series or Class.
The Banks Series Certificates represent fractional undivided interests in
the Trust which consist of the right to receive, to the extent necessary to
make the required payments with respect to the Short Term Bank Series
Certificates at the times and in the amounts specified in this Short Term
Supplement, the portion of Collections allocable to the Short Term Bank
Series Certificateholders pursuant to the Wholesale PSA and this Short Term
Supplement, funds on deposit in the Collection Account allocable to the
Short Term Bank Series Certificateholders pursuant to the Wholesale PSA and
this Short Term Supplement, and funds on deposit in the related Series
Accounts.
SECTION 11.8. Certificate Transfer Restrictions. Anything to
the contrary in this Short Term Supplement, the Wholesale PSA or the Short
Term RPA notwithstanding, no Short Term Bank Series Certificate may be sold
or transferred to any Person unless (a) the Short Term Bank Series
Certificate is transferred pursuant to a valid registration statement or
(b) pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), and (i) the proposed
transferee shall have furnished to the Seller, the Servicer and the Trustee
an Undertaking Letter, substantially in the form set forth in Exhibit F-1,
signed by such transferee, or (ii) if the transfer is to be made in
reliance on any exemption from the registration requirements of the Act
other than Rule 144A promulgated under the Act, the proposed transferee
shall have furnished to the Seller, the Servicer and the Trustee an
Undertaking Letter, substantially in the form of Exhibit F-2, signed by
such transferee and the transferor, at its own expense, shall have provided
to the Seller, the Servicer and the Trustee an Opinion of Counsel in form
reasonably satisfactory to the Trustee with respect to the availability of
such exemption.
SECTION 11.9. Trustee's Communications. The Administrative
Agent has been designated and appointed by the Short Term Bank Series
Certificateholders pursuant to the Short Term RPA. Notwithstanding any
other provision of this Short Term Supplement to the contrary, the Trustee
shall not be obligated to communicate with or make distributions to
individual Short Term Bank Series Certificateholders, but instead shall be
entitled to deal exclusively with the Administrative Agent for the Short
Term Bank Series Certificateholders.
ARTICLE XII
COVENANTS, REPRESENTATIONS AND WARRANTIES
SECTION 12.1. Representations and Warranties of the Seller and
the Servicer. The Seller and the Servicer each hereby represents and
warrants to the Trustee, the Administrative Agent, the Agent and each of
the Short Term Bank Series Certificateholders that each and every of their
respective representations and warranties contained in Sections 2.03 and
3.03 of the Wholesale PSA is true and correct in all material respects as
of the date hereof and as of the date of each Increase.
SECTION 12.2. Covenants of the Servicer. The Servicer hereby
agrees that:
(a) upon three Business Days' prior written notice, it shall
allow employees and agents of the Administrative Agent, acting at the
request of any Short Term Bank Series Certificateholder, during normal
business hours of the Servicer and without disruption of normal
business conducted by the Servicer, to initiate an audit of the
Servicer for the purpose of confirming compliance with the terms of
the Wholesale PSA and this Short Term Supplement, which audit shall be
at the expense of the Servicer;
(b) it shall give prior notice to the Administrative Agent
of the delegation of any of its servicing, collection,
enforcement or administrative duties with respect to the
Receivables; and
(c) if, at any time, none of the then outstanding Series or
Classes of Investor Certificates are being rated by a Rating
Agency, then the condition set forth in Section 4.03(b)(iii)(z)
of the Wholesale PSA with respect to the Servicer's right to make
monthly deposits of Collections into the Collection Account shall
not be applicable and any change in the frequency of deposits of
Collections made other than pursuant to Section 4.03(b)(iii)(x)
or (y) of the Wholesale PSA shall be subject to the prior written
consent of the Agent.
ARTICLE XIII
CONDITIONS PRECEDENT
SECTION 13.1. Conditions Precedent to Effectiveness of Short
Term Supplement. This Short Term Supplement will become effective on the
date (the "Effective Date") that the Agent shall have received:
(a) Documents. (i) A copy of the Wholesale PSA executed by a
duly authorized officer of each of the Seller, the Servicer and the
Trustee and certified by a Responsible Officer of the Seller,
(ii) this Short Term Supplement executed by a duly authorized officer
of each of the Seller, the Servicer, the Trustee, the Agent and the
Administrative Agent, (iii) from each of the Persons listed on
Schedule 1 to the Short Term RPA, an executed Addendum and (iv) for
each of the Persons listed on Schedule 1, a Short Term Bank Series
Certificate executed by the Seller and authenticated by the Trustee.
(b) Filings, Registrations and Recordings. A certificate of a
Responsible Officer of the Servicer that all documents (including
financing statements) required to be filed in order (i) to perfect the
sale of the Receivables by CCC to the Seller pursuant to the
Receivables Purchase Agreement and (ii) to create, in favor of the
Trustee, a perfected ownership interest in the Trust Assets under the
Wholesale PSA with respect to which an ownership interest may be
perfected by a filing under the UCC shall, in each case, have been
properly filed in each office in each jurisdiction listed in the
Wholesale PSA or the Receivables Purchase Agreement, as the case may
be, and such filings are the only ones required in order to perfect
the sale of the Receivables to the Seller under the Receivables
Purchase Agreement or to the Trust under the Wholesale PSA, as the
case may be, in the jurisdictions listed therein. The Servicer shall
attach to such certificate evidence of each such filing, registration
or recordation and satisfactory evidence of the payment of any
necessary fee, tax or expense relating thereto.
(c) Lien Searches. A certificate of a Responsible Officer of
the Servicer that there are no Liens with respect to any of the
property described in paragraph (b), which certificate shall have
attached thereto the results of a recent search of UCC and other
filings with respect to the Seller and CCC in each of the
jurisdictions referred to in paragraph (b).
(d) Legal Opinion. A legal opinion of Allan L. Ronquillo, Esq.,
general counsel to the Seller and the Servicer, dated the Effective
Date, in substantially the form of Exhibit E.
(e) Pooling and Servicing Agreement Conditions. A certificate
of a Responsible Officer of the Seller that the conditions to the
issuance of the Short Term Bank Series Certificates set forth in the
Wholesale PSA have been satisfied.
(f) Short Term RPA Conditions. A certificate of a Responsible
Officer of the Servicer that the conditions to the effectiveness of
the Short Term RPA set forth therein (excluding the condition that
this Short Term Supplement be effective) have been satisfied.
SECTION 13.2. Conditions Precedent to Increase. The obligation
of the Short Term Bank Series Certificateholders to make any Increase is
subject to the satisfaction of the following conditions precedent on or
before the Increase Date with respect thereto specified in the Increase
Notice delivered pursuant to Section 3.3:
(a) Short Term RPA. The Administrative Agent shall have
received the certificate required in connection with such Increase
pursuant to Section 4.3 of the Short Term RPA.
(b) Available Subordinated Amount. The Seller shall have
increased the Available Subordinated Amount to the Required Available
Subordinated Amount, after giving effect to such Increase.
(c) Reserve Account. The Seller shall have deposited into the
Reserve Account the amount, if any, necessary to cause the amount on
deposit in the Reserve Account to equal the Reserve Account Required
Amount, after giving effect to such Increase.
(d) Pre-Accrual Period Deposit. The Seller shall have deposited
into the Collection Account any Pre-Accrual Period Deposit required
pursuant to subsection 3.2(b).
(e) Certificate. The Trustee and the Administrative Agent shall
have received a certificate of a Responsible Officer of the Seller
stating that the conditions set forth in clauses (a), (b), (c) and (d)
of this subsection 13.2 have been satisfied and that the provisions of
subsection 3.2(b) will not be contravened by such Increase.
IN WITNESS WHEREOF, the Seller, the Servicer, the Trustee, the
Agent and the Administrative Agent have caused this Short Term Supplement
to be duly executed by their respective officers as of the day and year
first above written.
U.S. AUTO RECEIVABLES
COMPANY, Seller
By: /s/ John J. Shea
Title: Assistant Treasurer
CHRYSLER CREDIT CORPORATION,
Servicer
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
MANUFACTURERS AND TRADERS
TRUST COMPANY, Trustee
By: /s/ Leslie Boynton
Title: Assistant Vice President
CHEMICAL BANK, as Agent and
as Administrative Agent
By: /s/ Karen Sager
Title: Vice President
<PAGE>
Annex I
to Short Term Supplement
CERTAIN DEFINITIONS
The following terms shall have the respective meanings set forth
below:
"Accrual Period" shall have the meaning specified in the Short
Term RPA.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit A to the Short Term RPA, by which a Short Term Bank Series
Certificateholder becomes a party to the Short Term Supplement and the
Short Term RPA.
"Additional Interest" shall have the meaning specified in Section
5.2(b) of the Short Term Supplement.
"Administrative Agent" shall have the meaning assigned in the
preamble to the Short Term Supplement.
"Agent" shall have the meaning assigned in the preamble to the
Short Term Supplement.
"Aggregate Bank Invested Amount" shall mean, as of any date, the
sum of the Bank Invested Amounts of all Short Term Bank Series
Certificateholders on such date.
"Aggregate Commitment" shall mean the "Short Term Aggregate
Commitment," as defined in the Short Term RPA.
"Aggregate Invested Amount" shall have the meaning assigned to it
in the Short Term RPA.
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of (a) the Short Term Bank Series
Allocation Percentage with respect to such Collection Period and (b)
the Defaulted Amount with respect to such Collection Period.
"Allocable Miscellaneous Payments" shall mean, with respect to
any Distribution Date, the product of (a) the Short Term Bank Series
Allocation Percentage for the related Collection Period and (b)
Miscellaneous Payments with respect to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of (a) the Short Term Bank Series
Allocation Percentage for the related Collection Period and (b) the
aggregate amount of Collections of Non-Principal Receivables relating
to such Deposit Date.
"Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of (a) the Short Term Bank Series Allocation
Percentage for the related Collection Period and (b) the aggregate
amount of Collections in respect of Principal Receivables relating to
such Deposit Date.
"Available Bank Principal Collections" with respect to any
Distribution Date shall mean the sum of (a) Bank Principal Collections
for such Distribution Date, (b) Allocable Miscellaneous Payments with
respect to such Distribution Date, (c) Short Term Bank Series
Allocable Excess Principal Collections, if any, on deposit in the
Collection Account for such Distribution Date, and (d) on the
Termination Date, any funds in the Reserve Account after giving effect
to Section 5.7 of the Short Term Supplement.
"Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of (a) the Available Seller's Non-Principal
Collections for such Deposit Date and (b) the Available Seller's
Principal Collections for such Deposit Date; provided, however, that
the Available Seller's Collections shall be zero for any Collection
Period with respect to which the Available Subordinated Amount is zero
on the Determination Date immediately following the end of such
Collection Period.
"Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for
such Collection Period by (b) Allocable Non-Principal Collections for
such Deposit Date.
"Available Seller's Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for
such Collection Period by (b) Allocable Principal Collections for such
Deposit Date.
"Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Initial Subordinated Amount and the
Incremental Subordinated Amount with respect to such Determination
Date. The Available Subordinated Amount for any subsequent
Determination Date shall mean an amount equal to (a) the Available
Subordinated Amount for the preceding Determination Date, minus (b)
the Incremental Subordinated Amount for such preceding Determination
Date, minus (c) the amount of Available Seller's Principal
Collections, if any, applied pursuant to subsection 5.7(b) or
5.7(d)(i) of the Short Term Supplement with respect to the preceding
Distribution Date, minus (d) the amount of reduction, if any, in the
Available Subordinated Amount, pursuant to subsection 5.7(b) or 5.7(c)
of the Short Term Supplement with respect to the preceding
Distribution Date, plus (e) the Incremental Subordinated Amount, if
any, for such Determination Date; provided, however, that (i) the
Available Subordinated Amount may be increased on each Increase Date
by the Seller to the Required Available Subordinated Amount by notice
to the Trustee on or before such Increase Date, (ii) the Available
Subordinated Amount shall be decreased pursuant to subsection 3.3 of
the Short Term Supplement by the Seller to the Required Available
Subordinated Amount by notice to the Trustee on or before the related
Distribution Date or Series Issuance Date, as the case may be, and
(iii) the Available Subordinated Amount may be increased on any
Determination Date by the Seller, in its sole discretion, by notice to
the Trustee on or before any such Determination Date; and provided,
further, that, on any date, the Available Subordinated Amount shall
not exceed an amount equal to the sum of (i) the product of (A) 10.40%
and (B) the Aggregate Bank Invested Amount on such date divided by the
Bank Percentage and (ii) the Incremental Subordinated Amount, if any,
with respect to the preceding Determination Date.
"Bank Invested Amount" shall mean, with respect to any Short Term
Bank Series Certificateholder and as of any date, an amount equal to
(a) such Short Term Bank Series Certificateholder's Bank Invested
Amount on the immediately preceding date (or, with respect to the day
as of which such Short Term Bank Series Certificateholder becomes a
party to this Short Term Supplement, whether by executing an Addendum,
a Commitment Transfer Supplement or otherwise, (i) the product of such
Short Term Bank Series Certificateholder's Commitment Percentage and
the Initial Aggregate Bank Invested Amount or (ii) the portion of the
transferor's Bank Invested Amount being purchased, in the case of a
Purchasing Bank), plus (b) the amount of any increases in such Short
Term Bank Series Certificateholder's Bank Invested Amount pursuant to
Section 3.2 of the Short Term Supplement made on such date, minus (c)
the amount of any distributions to such Short Term Bank Series
Certificateholder pursuant to subsections 5.6(b) or 5.6(c) of the
Short Term Supplement on such date, minus (d) the product of (i) such
Short Term Bank Series Certificateholder's Commitment Percentage and
(ii) the excess, if any, of the aggregate amount of Investor
Charge-Offs over the aggregate amount of Investor Charge-Offs
reimbursed prior to such date.
"Bank Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) the Floating
Allocation Percentage for the related Collection Period and (ii)
Allocable Non-Principal Collections deposited in the Collection
Account for the related Collection Period.
"Bank Percentage" shall mean 90.55%.
"Bank Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to the Revolving Period, or the
Principal Allocation Percentage, with respect to an Early Amortization
Period, and (ii) Allocable Principal Collections deposited in the
Collection Account for the related Collection Period (or any partial
Collection Period which occurs as the first Collection Period during
an Early Amortization Period) and (b) the amount, if any, of
Collections of Non-Principal Receivables, funds in the Reserve
Account, Investment Proceeds and Available Seller's Principal
Collections to be distributed pursuant to Section 5.6(a)(iii),
5.6(a)(iv), 5.7(b) or (d) or 5.9(b) of the Short Term Supplement on
such Distribution Date.
"Base Rate" shall have the meaning assigned in the Short Term
RPA.
"Business Day" shall have the meaning assigned in the Short Term
RPA.
"CARCO" shall mean Chrysler Auto Receivables Company, a Delaware
corporation.
"CCC" shall mean Chrysler Credit Corporation, a Delaware
corporation.
"Certificateholders Monthly Servicing Fee" shall have the meaning
specified in Section 4.1 of the Short Term Supplement.
"CFC Revolving Credit Agreement" shall the meaning assigned in
the Short Term RPA.
"Change in Law" shall have the meaning specified in Section 8.5
of the Short Term Supplement.
"Collection Period" shall have the meaning assigned in the
Wholesale PSA.
"Commitment" shall have the meaning assigned in the Short Term
RPA.
"Commitment Percentage" shall have the meaning assigned in the
Short Term RPA.
"Commitment Termination Event" shall have the meaning assigned in
the Short Term RPA.
"Commitment Transfer Supplement" shall mean an "Assignment and
Acceptance" as defined in the Short Term RPA.
"Daily Base Rate Interest Expense" shall mean, for any day in any
Accrual Period, the product of (a) the portion of the Aggregate Bank
Invested Amount not allocated to the LIBO Tranche on such day divided
by 365 (or 366, as the case may be) and (b) the Base Rate in effect on
such day.
"Daily Report" shall mean a report prepared by the Servicer on
each Business Day for the period specified therein, in substantially
the form of Exhibit C to the Short Term Supplement or in such other
form as may be approved by the Administrative Agent and the Servicer.
"Dealer Rate" shall mean, as of any date, the rate at which
interest on Principal Receivables is being collected from Dealers on
such date.
"Decrease" shall have the meaning assigned in Section 3.3 of the
Short Term Supplement.
"Default Rate" shall have the meaning assigned in the Short Term
RPA.
"Deficiency Amount" shall have the meaning specified in Section
5.5 of the Short Term Supplement.
"Distribution Date" shall mean, with respect to the Short Term
Bank Series, the fifteenth day of each month or, if such day is not a
Working Day, the next succeeding Working Day.
"Distribution Date Statement" shall mean a report prepared by the
Servicer on each Determination Date for the immediately preceding
Collection Period, in substantially the form of Exhibit B to the Short
Term Supplement or in such other form as may be approved by the
Administrative Agent and the Servicer.
"Early Amortization Event" shall mean, with respect to the Short
Term Bank Series, an Early Amortization Event specified in Section
9.01 of the Wholesale PSA or in the Section 7.1 of the Short Term
Supplement.
"Early Amortization Period" shall mean, as used in the Short Term
Supplement, an Early Amortization Period (as defined in the Wholesale
PSA) with respect to the Short Term Bank Series.
"Effective Date" shall have the meaning specified in Section
13.1.
"Eurodollar Margin" shall have the meaning assigned in the Short
Term RPA.
"Excess Principal Collections" means the sum, with respect to any
Collection Period and with respect to all Series of Investor
Certificates issued pursuant to the Wholesale PSA, of the difference
between (i) Principal Collections allocated to the Investor
Certificates of such Series and (ii) distributions of Principal
Collections to the holders of such Investor Certificates, in each case
as calculated on the Distribution Date with respect to such Collection
Period.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less
than 0% nor more than 100%) equal to (a) 100% minus, when used with
respect to Non-Principal Receivables and Defaulted Receivables and
Principal Receivables during the Revolving Period, the sum of (i) the
Floating Allocation Percentage with respect to such Collection Period
and (ii) the percentage equivalent of a fraction, the numerator of
which is the Available Subordinated Amount as of the Determination
Date occurring in such Collection Period (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date), and
the denominator of which is the product of (i) the Pool Balance as of
the last day of the immediately preceding Collection Period and (ii)
the Short Term Bank Series Allocation Percentage with respect to the
Collection Period in respect of which the Excess Seller's Percentage
is being calculated and (b) 100% minus, when used with respect to
Principal Receivables during an Early Amortization Period, the sum of
(i) the Principal Allocation Percentage with respect to such
Collection Period and (ii) the percentage determined pursuant to
clause (a) (ii) above for such Collection Period.
"Excess Servicing" shall mean, with respect to any Distribution
Date, the amount, if any, specified pursuant to Section 5.6(a)(vi) of
the Short Term Supplement with respect to such Distribution Date.
"Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the
Aggregate Bank Invested Amount as of the last day of the immediately
preceding Collection Period and the denominator of which is the
product of (a) the Pool Balance as of the last day of the immediately
preceding Collection Period and (b) the Short Term Bank Series
Allocation Percentage with respect to the Collection Period in respect
of which the Floating Allocation Percentage is being calculated.
"Funding Rate" shall mean, as of any date, the rate at which the
Aggregate Bank Invested Amount shall bear interest, i.e., either the
LIBO Rate plus the Eurodollar Margin or the Base Rate, plus, if CCC is
not the Servicer, the Servicing Fee Rate.
"Increase" shall have the meaning assigned in subsection 3.2(a)
of the Short Term Supplement.
"Increase Amount" shall mean, with respect to any Increase Date,
the amount of the Increase in the Invested Amount on such date.
"Increase Date" shall have the meaning assigned in subsection
3.2(a) of the Short Term Supplement.
"Increased Costs" shall have the meaning assigned in Section 8.4
of the Short Term Supplement.
"Incremental Subordinated Amount" shall mean, with respect to any
Determination Date, the result obtained by multiplying (a) a fraction,
the numerator of which is the sum of the Aggregate Bank Invested
Amount with respect to the immediately preceding Collection Period and
the Available Subordinated Amount for such Determination Date
(calculated without adding the Incremental Subordinated Amount for
such Distribution Date as described in clause (f) of the definition
thereof), and the denominator of which is the Pool Balance on the last
day of such Collection Period by (b) the Trust Incremental
Subordinated Amount.
"Initial Aggregate Bank Invested Amount" shall mean $0.
"Initial Short Term Bank Series Certificateholder" shall have the
meaning assigned in the preamble of the Short Term Supplement.
"Initial Invested Amount" shall mean, with respect to the Short
Term Bank Series, (I) with respect to any Collection Period relating
to the Revolving Period, an amount equal to the sum of (i) the Initial
Aggregate Bank Invested Amount plus (ii) the aggregate amount of
Increases pursuant to Section 3.2 of the Short Term Supplement made
during or prior to such Collection Period minus (iii) the aggregate
amount of distributions pursuant to Section 5.6(b) or 5.6(c) of the
Short Term Supplement made or to be made on the Distribution Date
occurring in such Collection Period or made on prior Distribution
Dates and (II) as of any date during an Early Amortization Period, the
Initial Invested Amount as of the last day of the Revolving Period.
"Initial Reserve Account Deposit Amount" shall mean zero.
"Initial Subordinated Amount" shall mean $0.
"Interest Coverage Shortfall" shall mean, for any Distribution
Date, the excess of (a) the sum of (i) Monthly Interest for such
Distribution Date plus any Monthly Interest accrued but not paid with
respect to prior Distribution Dates, plus the amount of Additional
Interest for such Distribution Date and any Additional Interest
previously due but not distributed to the Short Term Bank Series
Certificateholders on any prior Distribution Date and (ii) the
Certificateholders Monthly Servicing Fee for such Distribution Date
over (b) the sum of any Pre-Accrual Period Deposit applied pursuant to
Section 5.6, Bank Non-Principal Collections, Available Seller's
Non-Principal Collections and Investment Proceeds for such
Distribution Date.
"Interest Shortfall" shall have the meaning specified in Section
5.2 of the Short Term Supplement.
"Invested Amount" shall mean, when used with respect to the Short
Term Bank Series and with respect to any date, an amount equal to the
Aggregate Bank Invested Amount.
"Investment Proceeds" shall have the meaning specified in Section
5.4 of the Short Term Supplement.
"Investor Charge-Offs" shall have the meaning specified in
Section 5.8 of the Short Term Supplement.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Allocable
Defaulted Amount for the related Collection Period and (b) the
Floating Allocation Percentage for the related Collection Period.
"LIBO Rate" shall have the meaning assigned in the Short Term
RPA.
"LIBO Tranche" shall mean the portion of the Aggregate Bank
Invested Amount for which Monthly Interest is calculated by reference
to the LIBO Rate.
"Monthly Base Rate Interest" shall have the meaning specified in
Section 5.2 of the Short Term Supplement.
"Monthly Certificateholders' Statement" shall mean a report
prepared by the Servicer with respect to each Distribution Date for
the immediately preceding Collection Period, during the Revolving
Period, in substantially the form of Exhibit D-1 to the Short Term
Supplement and, during an Early Amortization Period, in substantially
the form of Exhibit D-2 to the Short Term Supplement.
"Monthly Interest" shall have the meaning specified in Section
5.2 of the Short Term Supplement.
"Monthly Payment Rate" shall mean, for any Collection Period, the
percentage equivalent of a fraction the numerator of which is
Principal Collections for such Collection Period and the denominator
of which is the average daily Pool Balance for such Collection Period.
"Monthly Principal" shall have the meaning specified in Section
5.3 of the Short Term Supplement.
"Monthly Servicing Fee" shall have the meaning specified in
Section 4.1 of the Short Term Supplement.
"Non-Extending Short Term Bank Series Certificateholder" shall
mean a Short Term Bank Series Certificateholder which is a
"Non-Extending Bank" under the Short Term RPA.
"Pre-Accrual Period Deposit" shall have the meaning assigned in
subsection 3.2(b) of the Short Term Supplement.
"Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the
Aggregate Bank Invested Amount as of the last day of the Revolving
Period and the denominator of which is the product of (a) the Pool
Balance as of the last day of the immediately preceding Collection
Period and (b) the Short Term Bank Series Allocation Percentage with
respect to the Collection Period in respect of which the Principal
Allocation Percentage is being calculated; provided, however, that
with respect to that portion of any Collection Period that falls after
the date on which any Early Amortization Event occurs (other than (i)
an Early Amortization Event which has resulted in an Early
Amortization Period which has ended as described in clause (c) thereof
or (ii) an Early Amortization Event which has resulted in an Early
Amortization Period which has ended and which has been followed by a
recommenced Revolving Period pursuant to the last proviso in the
definition of Revolving Period), the Principal Allocation Percentage
shall be reset using the Pool Balance as of the close of business on
the date on which such Early Amortization Event shall have occurred
and Principal Collections shall be allocated for such portion of such
Collection Period using such reset Principal Allocation Percentage.
"Principal Shortfall" shall mean, with respect to the Short Term
Bank Series and any Distribution Date, an amount equal to the excess,
if any, of (i) (x) for any Distribution Date with respect to the
Revolving Period, the Decrease, if any, with respect to such
Distribution Date or (y) for any Distribution Date with respect to an
Early Amortization Period, the Aggregate Bank Invested Amount, over
(ii) Available Bank Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Excess Principal
Collections).
"Purchasing Bank" shall have the meaning specified in the Short
Term RPA.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date, the sum
of (i) the Aggregate Bank Invested Amount on such Distribution Date,
(ii) accrued and unpaid interest on the unpaid balance of the Short
Term Bank Series Certificates (calculated on the same basis as is
Monthly Interest under Section 5.2) through the day preceding such
Distribution Date, and (iii) the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest previously
due but not distributed to the Short Term Bank Series
Certificateholders on a prior Distribution Date.
"Reference Banks" shall have the meaning specified in the Short
Term RPA.
"Required Available Subordinated Amount" shall mean, on any date,
the sum of (i) the product of (A) the Required Subordinated Percentage
and (B) the Aggregate Bank Invested Amount on such date divided by the
Bank Percentage and (ii) the Incremental Subordinated Amount, if any,
with respect to the preceding Determination Date.
"Required Short Term Bank Series Certificateholders" shall mean
"Required Purchasers", as defined in the Short Term RPA.
"Required Participation Percentage" shall mean, with respect to
the Short Term Bank Series, 104%; provided, however, that the Seller
may, upon 10 days' prior notice to the Trustee, the Administrative
Agent, each Rating Agency and any Enhancement Provider, reduce the
Required Participation Percentage with respect to all outstanding
Series to a percentage which shall not be less than 100%, provided
that no Rating Agency shall have notified the Seller or the Servicer
that any such reduction will result in a reduction or withdrawal of
the rating of any outstanding Series or Class with respect to which it
is a Rating Agency.
"Required Reserve Percentage" shall mean 0.55%.
"Required Subordinated Percentage" shall mean 9.45%.
"Required Subordination Draw Amount" shall have the meaning
specified in Section 5.5 of the Short Term Supplement.
"Reserve Account" shall have the meaning specified in Section 5.4
of the Short Term Supplement.
"Reserve Account Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which (i) the Reserve
Account Required Amount for such Distribution Date exceeds (ii) the
amount of funds in the Reserve Account after giving effect to any
withdrawals therefrom on such Distribution Date.
"Reserve Account Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Required
Reserve Percentage and (b) the Aggregate Bank Invested Amount on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) divided by the Bank Percentage.
"Reserve Account Trigger Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) 0.4% and (b)
the Aggregate Bank Invested Amount on such Distribution Date (after
giving effect to any change therein on such Distribution Date) divided
by the Bank Percentage.
"Retail Seller" shall have the meaning assigned in the Short Term
RPA.
"Revolving Period" shall mean the period beginning at the close
of business on the Effective Date and ending on the earlier of (a) the
last day of the Collection Period ending in the calendar month in
which the Short Term Commitment Termination Date occurs and (b) the
close of business on the day an Early Amortization Period commences;
provided, however, that, if any Early Amortization Period ends as
described in clause (c) of the definition thereof, the Revolving
Period will recommence as of the close of business on the day such
Early Amortization Period ends and provided, further, that (i) if any
Early Amortization Period has resulted from the occurrence of an Early
Amortization Event described in Section 7.1(e) or 7.1(g) of the Short
Term Supplement, (ii) no other Early Amortization Event shall have
occurred and the scheduled termination of the Revolving Period
pursuant to clause (a) above shall not have occurred, (iii) the
Aggregate Bank Invested Amount shall have been reduced to zero and
(iv) the Dealer Rate shall be greater than the Funding Rate, the
Revolving Period shall recommence as of the close of business on the
day the conditions set forth in clauses (i), (ii), (iii) and (iv)
above shall have been satisfied.
"Section 8 Costs" shall mean Increased Costs, any reemployment
costs due pursuant to Section 8.1 of the Short Term Supplement, any
amounts due pursuant to Section 8.5 of the Short Term Supplement and
any additional amounts payable pursuant to Section 8.6 of the Short
Term Supplement.
"Seller" shall mean U.S. Auto Receivables Company, a Delaware
corporation.
"Seller's Collections" shall mean, with respect to any Collection
Period, the sum of (a) the Seller's Percentage of Allocable
Non-Principal Collections for the related Collection Period plus (b)
the Seller's Percentage of Allocable Principal Collections for the
related Collection Period.
"Seller's Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used with respect to Non-Principal
Receivables and Defaulted Receivables and Principal Receivables during
the Revolving Period, and (b) the Principal Allocation Percentage,
when used with respect to Principal Receivables during an Early
Amortization Period.
"Servicer" shall initially mean CCC, in its capacity as servicer
under the Wholesale PSA and after any Service Transfer, the Successor
Servicer.
"Servicing Fee Rate" shall mean, with respect to the Short Term
Bank Series, 1.0%.
"Short Term Bank Series" shall mean the Series of Investor
Certificates, the terms of which are specified in the Short Term
Supplement.
"Short Term Bank Series Allocable Excess Principal Collections"
shall mean, with respect to any Distribution Date, the Principal
Shortfall with respect to the Short Term Bank Series for such
Distribution Date; provided, however, that if the aggregate amount of
Excess Principal Collections for all Series for such Distribution Date
is less than the aggregate amount of "Principal Shortfalls" (as
defined in the Wholesale PSA) for such Distribution Date, then Short
Term Bank Series Allocable Excess Principal Collections shall equal
the product of (x) Excess Principal Collections for all Series for
such Distribution Date and (y) a fraction, the numerator of which is
the Principal Shortfall with respect to the Short Term Bank Series for
such Distribution Date and the denominator of which is the aggregate
amount of "Principal Shortfalls" for all Series on such Distribution
Date.
"Short Term Bank Series Allocation Percentage" shall mean the
Series Allocation Percentage with respect to the Short Term Bank
Series.
"Short Term Bank Series Certificateholders" shall mean the
Holders of Short Term Bank Series Certificates.
"Short Term Bank Series Certificateholders' Interest" shall mean
that portion of the Certificateholders' Interest evidenced by the
Short Term Bank Series Certificates.
"Short Term Bank Series Certificates" shall mean any one of the
certificates executed by the Seller and authenticated by the Trustee,
substantially in the form of Exhibit A to the Short Term Supplement.
"Short Term Commitment" shall have the meaning assigned in the
Short Term RPA.
"Short Term Commitment Termination Date" shall have the meaning
assigned in the Short Term RPA.
"Short Term RPA" shall have the meaning set forth in the
introduction to the Short Term Supplement.
"Short Term Supplement" shall mean the Short Term Bank
Supplement, dated as of May 23, 1994 among the Seller, the Servicer,
the Trustee, the Short Term Bank Series Certificateholders, the Agent
and the Administrative Agent, as amended, supplemented or otherwise
modified from time to time.
"Taxes" shall have the meaning assigned in subsection 8.6(a) of
the Short Term Supplement.
"Termination Date" shall mean the date which is thirty-six months
after the last day of the Revolving Period.
"Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant
to Section 12.02(c) of the Wholesale PSA with respect to the Short
Term Bank Series.
"Wholesale Short Term Bank Series Certificate Sublimit" shall
mean the "Wholesale Senior Certificate Sublimit", as defined in the
Short Term RPA.
"Wholesale PSA" shall mean the Pooling and Servicing Agreement
dated as of May 31, 1991, as assigned by CARCO to the Seller on August
8, 1991, among the Seller, the Servicer and the Trustee, as assigned
and as amended and supplemented from time to time.
Exhibit 10-H
CONFORMED COPY
LONG TERM
RECEIVABLES PURCHASE AGREEMENT
_______________
CHRYSLER FINANCIAL CORPORATION
CHRYSLER CREDIT CORPORATION
U.S. AUTO RECEIVABLES COMPANY
AMERICAN AUTO RECEIVABLES COMPANY
_______________
CHEMICAL BANK,
as Agent
and
as Administrative Agent
_______________
Dated as of May 23, 1994
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . 1
SECTION 2. AMOUNT AND TERMS OF LONG TERM COMMITMENTS. . . . . . . . . . 2
2.1 Long Term Commitments . . . . . . . . . . . . . . . . . . . . 2
2.2 Related Documents . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Procedure for Purchase. . . . . . . . . . . . . . . . . . . . 2
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Termination or Reduction of Long Term Commitments . . . . . . 4
2.6 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . 4
2.8 Addition of Retail Sellers. . . . . . . . . . . . . . . . . . 5
2.9 Additional Commitments. . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 5
3.1 Corporate Existence; Compliance with Law. . . . . . . . . . . 5
3.2 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 No Material Litigation. . . . . . . . . . . . . . . . . . . . 6
3.5 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Investment Company Act; Other Regulations . . . . . . . . . . 6
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 7
4.1 Conditions to Effectiveness of This Long Term RPA . . . . . . 7
4.2 Notice of Effective Date. . . . . . . . . . . . . . . . . . . 8
4.3 Conditions to Each Purchase . . . . . . . . . . . . . . . . . 8
4.4 Conditions to Addition of Retail Seller . . . . . . . . . . . 9
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Ownership of Retail Sellers and Wholesale Seller. . . . . . . 9
5.4 Maintenance of Separate Existence . . . . . . . . . . . . . . 9
SECTION 6. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. COMMITMENT TERMINATION EVENTS. . . . . . . . . . . . . . . . 11
SECTION 8. THE AGENT AND ADMINISTRATIVE AGENT . . . . . . . . . . . . . 12
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . 13
8.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . 13
8.4 Reliance by Agent and Administrative Agent. . . . . . . . . . 13
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . 14
8.6 Non-Reliance on Agent, Administrative Agent and Other
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 15
8.8 Agent in Its Individual Capacity. . . . . . . . . . . . . . . 15
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . 15
8.10 Successor Administrative Agent. . . . . . . . . . . . . . . . 16
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 16
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . 18
9.4 Survival of Representations and Warranties. . . . . . . . . . 18
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . 18
9.6 Successors and Assigns; Participations; Purchasing
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.7 Clearing Accounts . . . . . . . . . . . . . . . . . . . . . . 22
9.8 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . 23
9.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 24
9.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 24
9.11 Integration . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 24
9.13 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . 24
9.14 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . 25
ANNEX
1 Definitions
SCHEDULE
I Long Term Commitments
EXHIBITS
A Addendum
B Long Term Retail PSA
C Long Term Wholesale Series Supplement
D Effective Date Opinion
E Assignment and Acceptance
F Form of New Bank Supplement
G Form of Long Term Commitment Increase Supplement
<PAGE>
LONG TERM RECEIVABLES PURCHASE AGREEMENT, dated as of May 23,
1994, among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation ("CFC"
or the "Company"), CHRYSLER CREDIT CORPORATION, a Delaware corporation
("CCC"), U.S. AUTO RECEIVABLES COMPANY, a Delaware corporation, in its
capacity as originator of the Wholesale Master Trust referred to below and
seller of receivables under the Wholesale PSA referred to below (in such
capacity, the "Wholesale Seller"), AMERICAN AUTO RECEIVABLES COMPANY, a
Delaware corporation, and the other special purpose subsidiaries of CFC
from time to time parties hereto in their capacities as sellers of
undivided interests in Retail Pooled Property represented by Retail Senior
Certificates (each, in such capacity, a "Retail Seller"), the several
commercial banks from time to time parties to this Long Term RPA (the
"Banks") and CHEMICAL BANK, a New York banking corporation, as agent for
the Banks hereunder (in such capacity, the "Agent") and as administrative
agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, CFC, CCC, the Wholesale Seller and the Retail Seller
have requested that the Banks agree to purchase undivided participating
interests in Retail Pooled Property and in Wholesale Trust Assets (each, as
hereinafter defined);
WHEREAS, subject to the terms and conditions hereof, the Banks
are willing to make such purchases;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The capitalized terms used herein which are
defined in, or by reference in, Annex 1 hereto shall have the meanings
specified therein.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Long Term RPA shall have the
defined meanings when used in the Related Documents or any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in the Related Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to
the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Long Term RPA shall refer to this Long
Term RPA as a whole and not to any particular provision of this Long Term
RPA, and Section, subsection, Schedule and Exhibit references are to this
Long Term RPA unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LONG TERM COMMITMENTS
2.1 Long Term Commitments. Subject to the terms and conditions
hereof, during the Long Term Commitment Period each Bank severally agrees
to purchase from the Retail Sellers (each such purchase, a "Retail
Purchase") undivided participating interests in Retail Pooled Property and
to purchase from the Wholesale Seller (each such purchase, a "Wholesale
Purchase") undivided participating interests in Wholesale Trust Assets in
amounts such that at any one time such Bank's Commitment Percentage of the
Aggregate Invested Amount shall not exceed the amount of such Bank's Long
Term Commitment, provided that the Wholesale Aggregate Senior Invested
Amount shall not, after giving effect to any proposed Wholesale Purchase,
exceed the Wholesale Senior Certificate Sublimit.
2.2 Related Documents. (a) Retail Purchases shall be made
pursuant to the terms and conditions of the Long Term Retail PSA, and each
Bank's undivided participating interest in the Retail Pooled Property shall
be evidenced by a Retail Senior Certificate issued to such Bank pursuant to
the Long Term Retail PSA.
(b) Wholesale Purchases shall be made pursuant to the terms and
conditions of the Long Term Wholesale Series Supplement, and each Bank's
undivided participating interest in the Wholesale Trust Assets shall be
evidenced by a Wholesale Senior Certificate issued to such Bank pursuant to
the Long Term Wholesale Series Supplement.
2.3 Procedure for Purchase. The Sellers may utilize the Long
Term Commitments during the Long Term Commitment Period on any Distribution
Date or any other Business Day, provided that the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Purchase Date, if all or any part of
the requested Purchase is to initially bear interest at a rate based on the
LIBO Rate or (b) one Business Day prior to the requested Purchase Date,
otherwise), specifying (i) the amount to be purchased, (ii) the requested
Purchase Date, (iii) whether the Purchase is to be a Retail Purchase, a
Wholesale Purchase or a combination thereof, (iv) if the Purchase is to be
entirely or partly a Wholesale Purchase and is made on a Wholesale
Distribution Date, the respective amounts of such Wholesale Purchase which
shall initially bear interest at a rate based on the LIBO Rate and at a
rate based on the Base Rate and (v) if any amount of such Purchase shall
bear interest based on the LIBO Rate, the date of the succeeding
Distribution Date; it being understood that (A) any Wholesale Purchase made
on a day other than a Wholesale Distribution Date shall bear interest based
on the Base Rate until the following Wholesale Distribution Date and
thereafter shall bear interest based on the LIBO Rate or the Base Rate, as
selected pursuant to the Long Term Wholesale Series Supplement, and (B) any
Retail Purchase made on a day other than a Retail Distribution Date shall
bear interest based on the Base Rate until the following Retail
Distribution Date and thereafter shall bear interest based on the LIBO
Rate. On each Purchase Date the Purchases under the Long Term Commitments
shall be in an aggregate amount equal to at least $100,000,000. Upon
receipt of any such notice from the Company, the Administrative Agent shall
promptly notify each Bank thereof. Each Bank shall (subject to subsection
9.7(b)) deposit in its Clearing Account an amount in immediately available
funds equal to the amount of its pro rata share of each Purchase prior to
11:00 A.M., New York City time, on the Purchase Date requested by the
Company. The Agent shall, pursuant to subsection 9.7(a), cause such amount
to be withdrawn from each such Clearing Account and shall make the
aggregate amount so withdrawn available to the Company for the benefit of
the Sellers by depositing the proceeds thereof in the account of the
Company with the Agent.
2.4 Fees.
(a) CCC agrees to pay to the Agent, for the ratable account of
the Banks, a facility fee for each day from and including the Effective
Date to but excluding the later of (i) the last day of the Long Term
Commitment Period and (ii) the date on which the Aggregate Invested Amount
shall have been reduced to zero (such later date, the "Final Fee Payment
Date"). Such fee shall be payable quarterly in arrears on (A) the first
Business Day of each January, April, July and October (for the three-month
period (or portion thereof) ended on the last day of the immediately
preceding month) and (B) on the Final Fee Payment Date (for the period
ended on such date for which no payment has been received pursuant to
clause (A) above) and shall be computed for each day during such period at
a rate per annum equal to 0.1875 of 1% of the Long Term Aggregate
Commitment Amount in effect on such day (or, if the Long Term Commitments
shall have been terminated, on the Aggregate Invested Amount on such day).
(b) Facility fees shall be calculated on the basis of a 365- or
366-day year, as the case may be, for actual days elapsed. Facility fees
that are not paid when due shall bear interest, payable on demand, from the
date when due until paid in full (both before and after judgment) at the
Default Rate.
(c) CCC agrees to pay the Administrative Agent a fee of $2000
per month with respect to each calendar month during which the Aggregate
Invested Amount exceeds zero at any time occurring during the period from
the first day of the calendar month following the calendar month in which
the Effective Date occurs until the Aggregate Invested Amount is zero and
the Long Term Commitments have terminated, payable in arrears on the last
Business Day of each such month.
(d) If any Bank becomes an "affected Purchaser" under Section
11.3(f)(i) of the Long Term Retail PSA or an "affected Bank Series
Certificateholder" under Section 8.5(i) of the Long Term Wholesale Series
Supplement following any "Change in Law" (as defined therein), CCC shall
thereafter increase that portion of the facility fee payable to such
affected Bank under paragraph (a) of this subsection 2.4 to a level, which,
in the opinion of such affected Bank, will adequately compensate such
affected Bank for the costs referred to in such agreements. The Company
may from time to time reduce the compensation to be received pursuant to
this paragraph (d) by any affected Bank as a result of any Change in Law,
to the average compensation (the "Average Compensation") the Company has
agreed, as provided above, to pay the affected Banks as a result of such
Change in Law (such average compensation to be measured by a percentage of
the aggregate Long Term Commitments of such affected Banks).
2.5 Termination or Reduction of Long Term Commitments. The CFC
Parties shall have the right, upon not less than five Business Days' notice
to the Agent, to terminate the Long Term Commitments or, from time to time,
to reduce the amount of Long Term Commitments. Any such reduction shall be
in an amount equal to $100,000,000 or a whole multiple of $1,000,000 in
excess thereof and shall reduce permanently the Long Term Commitments then
in effect.
2.6 Interest. (a) Each Retail Senior Certificate shall bear
interest as set forth in the Long Term Retail PSA.
(b) Each Wholesale Senior Certificate shall bear interest as set
forth in the Long Term Wholesale Series Supplement.
2.7 Pro Rata Treatment and Payments. (a) Each Purchase
hereunder, each payment by CCC on account of any facility fee hereunder and
any reduction of the Long Term Commitments of the Banks shall be made pro
rata according to the respective Commitment Percentages of the Banks. All
payments (including prepayments) by the Sellers on the Certificates and
with respect to fees shall be made without setoff or counterclaim to the
Agent for the account of the Banks at the office of the Agent referred to
in subsection 9.2 in Dollars and in immediately available funds. The Agent
shall promptly distribute such payments to each Bank entitled to receive a
portion thereof by causing such Bank's portion of such payment to be
deposited in such Bank's Clearing Account.
(b) Unless the Agent shall have been notified in writing by any
Bank prior to a Purchase Date that such Bank will not make the amount that
would constitute its Commitment Percentage of the Purchase on such date
available to the Agent, the Agent may assume that such Bank has made such
amount available to the Agent on such Purchase Date, and the Agent may, in
reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is made available to the Agent on a
date after such Purchase Date, such Bank shall pay to the Agent on demand
an amount equal to the product of (i) the daily average Effective Federal
Funds Rate during such period, times (ii) the amount of such Bank's
Commitment Percentage of such Purchase, times (iii) a fraction the
numerator of which is the number of days that elapse from and including
such Purchase Date to the date on which such Bank's Commitment Percentage
of such Purchase shall have become immediately available to the Agent and
the denominator of which is 360. A certificate of the Agent submitted to
any Bank with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Bank's Commitment
Percentage of such Purchase is not in fact made available to the Agent by
such Bank within three Business Days of such Purchase Date, the Agent shall
be entitled to recover such amount with interest thereon at the Base Rate
on demand, from the Company.
2.8 Addition of Retail Sellers. Subject to the terms and
conditions hereof, from time to time a special purpose subsidiary of CFC
may become an additional Retail Seller party hereto by executing an
Additional Seller Supplement hereto and to the Long Term Retail PSA. From
and after the Retail Addition Date with respect to each additional Retail
Seller through but excluding the Retail Addition Date with respect to any
successive additional Retail Seller, all Retail Purchases shall be made
with the Retail Seller which last became party hereto and all other Retail
Sellers shall be party hereto and to the Long Term Retail PSA solely with
respect to Retail Pooled Property in which they previously sold
participating interests.
2.9 Additional Commitments. The Company may, with the consent of
the Agent (which shall not be unreasonably withheld), (a) add any
additional Commercial Bank as a Bank pursuant to a New Bank Supplement,
substantially in the form of Exhibit F, duly executed and delivered by the
Company, the Agent and such Commercial Bank, whereupon such Commercial Bank
(herein called a "New Bank") shall become a Bank for all purposes and to
the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Long Term RPA and the Related Documents,
Schedule I hereto shall be deemed to be amended to add the name and Long
Term Commitment of such New Bank and the Long Term Aggregate Commitment
Amount shall be increased by the amount of such New Bank's Long Term
Commitment, effective as of the date on which any such New Bank becomes a
Bank pursuant to the provisions of this subsection 2.9(a), or (b) enable an
existing Bank to increase its Long Term Commitment pursuant to a Long Term
Commitment Increase Supplement, substantially in the form of Exhibit G,
duly executed and delivered by the Company, the Agent and such Bank,
whereupon such Bank shall be bound by and entitled to the benefits of this
Long Term RPA and the Related Documents with respect to the full amount of
its Long Term Commitment as so increased, Schedule I hereto shall be deemed
to be amended to add the increased Long Term Commitment of such Bank, and
the Long Term Aggregate Commitment Amount shall be increased by the amount
of such Bank's additional Long Term Commitment, effective as of the date on
which any such Bank increases its Long Term Commitment pursuant to the
provisions of this subsection 2.9(b). The CFC Parties shall promptly
execute and deliver appropriate Retail Senior Certificates and Wholesale
Series Certificates to each New Bank and, upon surrender of its old
Certificates, to each Bank increasing its Long Term Commitment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Long Term RPA and to make
the Purchases the Company hereby represents and warrants to the Agent and
each Bank that:
3.1 Corporate Existence; Compliance with Law. Each CFC Party
(a) is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification except where the failure so to qualify could not, in the
aggregate have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
3.2 Corporate Power; Authorization; Enforceable Obligations.
Each CFC Party has the corporate power and authority, and the legal right,
to make, deliver and perform this Long Term RPA and the Related Documents
and has taken all necessary corporate action to authorize the Purchases on
the terms and conditions of this Long Term RPA and the Related Documents
and to authorize the execution, delivery and performance of this Long Term
RPA and the Related Documents. No consent or authorization of, filing with
or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Purchases hereunder or with the
execution, delivery, performance, validity or enforceability of this Long
Term RPA or the Related Documents except such consents, authorizations or
filings as have been obtained or made. This Long Term RPA has been, and
each Related Document will be, duly executed and delivered on behalf of
each CFC Party party thereto. This Long Term RPA constitutes, and each
Related Document when executed and delivered will constitute, a legal,
valid and binding obligation of each CFC Party party thereto enforceable
against such CFC Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.3 No Legal Bar. The execution, delivery and performance of
this Long Term RPA and the Related Documents, the Purchases hereunder and
the use of the proceeds thereof will not violate the certificate or
articles of incorporation, by-laws, other organizational or governing
documents, any Requirement of Law or any Contractual Obligation of any CFC
Party.
3.4 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company
or any CFC Party or against any of its or their respective properties or
revenues (a) with respect to this Long Term RPA or the Related Documents or
any of the transactions contemplated hereby, or (b) which could have a
Material Adverse Effect.
3.5 No Default. No Commitment Termination Event has occurred
and is continuing.
3.6 Investment Company Act; Other Regulations. No CFC Party is
an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of This Long Term RPA. This
Long Term RPA shall become effective on the date (the "Effective Date")
that the Agent shall have received the following:
(a) Agreement. (i) This Long Term RPA, executed and delivered
by a duly authorized officer of each CFC Party party hereto and (ii)
from each of the Persons listed on Schedule I, an executed Addendum.
(b) Long Term Retail PSA. (i) The Long Term Retail PSA,
executed and delivered by a duly authorized officer of each CFC Party
party thereto and (ii) a certificate of a Responsible Officer of the
Company that the conditions to the effectiveness of the Long Term
Retail PSA set forth therein have been satisfied.
(c) Long Term Wholesale Series Supplement. (i) The Long Term
Wholesale Series Supplement, executed and delivered by a duly
authorized officer of each CFC Party party thereto and (ii) a
certificate of a Responsible Officer of the Company that the
conditions to the effectiveness of the Long Term Wholesale Series
Supplement set forth therein have been satisfied.
(d) Corporate Proceedings of the Company. A copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of each CFC Party authorizing the execution,
delivery and performance of this Long Term RPA and the other Related
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of such CFC Party, which certificate shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(e) Corporate Documents. True and complete copies of the
articles or certificate of incorporation and by-laws of each CFC
Party, certified as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such CFC Party.
(f) No Violation. A certificate of a Responsible Officer of the
Company that the consummation of the transactions contemplated hereby
shall not contravene, violate or conflict with, as to any CFC Party,
any Requirement of Law or the certificate or articles of
incorporation, by-laws or other organizational or governing documents
of such Person.
(g) Consents, Licenses and Approvals. A certificate of a
Responsible Officer of the Company (i) attaching copies of all
consents, authorizations and filings referred to in subsection 3.2,
and (ii) stating that such consents, licenses and filings are in full
force and effect.
(h) Legal Opinions. The executed legal opinion of Allan L.
Ronquillo, Esq., general counsel of the Company, substantially in the
form of Exhibit D.
(i) Existing Long Term Standby RPA. Satisfactory evidence that
the Existing Long Term Standby RPA shall have been terminated pursuant
to an irrevocable notice of termination of commitments, that any
amounts owing thereunder by the Company (including, without
limitation, accrued unpaid commitment fees through the Effective Date)
shall have been (or shall upon the occurrence of the Effective Date
be) paid in full and that the "Aggregate Invested Amount" thereunder
as of the Effective Date shall be equal to zero. Without affecting
any terms of the Existing Long Term Standby RPA which expressly
survive the termination of the Existing Long Term Standby RPA, each
Bank party to the Existing Long Term Standby RPA hereby waives any
requirement of advance notice of such termination contained in the
Existing Long Term Standby RPA and hereby agrees that the Existing
Long Term Standby RPA and the commitments thereunder (subject to
receipt of any other required consents of any other Person) shall
terminate simultaneously with the satisfaction by the Company of the
conditions to effectiveness set forth in this subsection 4.1.
4.2 Notice of Effective Date. Upon satisfaction of the
conditions set forth in subsection 4.1, the Agent shall deliver to each CFC
Party and Bank a notice stating that such conditions have been satisfied
and setting forth the Effective Date.
4.3 Conditions to Each Purchase. The agreement of each Bank to
make any Purchase requested to be made by it on any date (including,
without limitation, its initial Purchase) is subject to the satisfaction of
the conditions precedent set forth in the Long Term Retail PSA, with
respect to Retail Purchases, and in the Long Term Wholesale Series
Supplement with respect to Wholesale Purchases and the following conditions
with respect to all Purchases:
(a) no Commitment Termination Event shall have occurred and
be continuing;
(b) the representations and warranties set forth in Section
3 shall be true and correct in all material respects on and as of
the related Purchase Date;
(c) neither the Company nor CCC shall be in default in the
payment of interest on any Indebtedness of, or assumed by, such
Person when due, which default shall have continued for a period
of 10 days, or in payment of the principal of any such evidence
of Indebtedness when due;
(d) no default shall have occurred and be continuing under
any instrument securing or providing for the issuance of
Indebtedness of the Company or CCC, which default shall have
continued unremedied for a period to permit acceleration of the
maturity of such Indebtedness;
(e) receipt by the Administrative Agent on the date of such
Purchase of a certificate of a Responsible Officer stating that the
conditions set forth in this Section 4.3 have been satisfied.
4.4 Conditions to Addition of Retail Seller. A special purpose
subsidiary shall become an additional Retail Seller on the date (with
respect to such Retail Seller, the "Retail Addition Date") that the Agent
shall have received a certificate of a Responsible Officer of the Servicer
stating that all conditions precedent to the addition of such Seller as a
party to the Long Term Retail PSA (including execution of a supplement
making such Person a party hereto) have been satisfied.
SECTION 5. COVENANTS
The Company hereby agrees that, so long as the Long Term
Commitments remain in effect, any Certificate remains outstanding or any
other amount is owing to any Bank or the Agent hereunder, the Company shall
and shall cause each of the other CFC Parties to:
5.1 Notices. Promptly give notice to the Agent and each Bank of
the occurrence of any Commitment Termination Event and any Default or Event
of Default under and as defined in the CFC Revolving Credit Agreement.
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred
to therein and stating what action, if any, the Company proposes to take
with respect thereto.
5.2 Merger. The Company and CCC will not merge or consolidate
with or into any other Person, except that
(i) the Company may merge or consolidate with or into any
other Person, provided that (A) the Company shall be the
continuing or surviving corporation, and (B) immediately after
such merger or consolidation, the Company shall be able to
fulfill the conditions set forth in subsection 4.3; and
(ii) CCC may merge or consolidate (A) with or into the
Company (provided that the Company shall be the continuing or
surviving corporation), (B) with or into any one or more of its
wholly-owned Subsidiaries (provided that a wholly-owned
Subsidiary of CFC shall be the continuing or surviving
corporation) and (C) with or into any other Person, if CCC shall
be the continuing or surviving corporation and shall continue to
be a Subsidiary of the Company and immediately after such merger
or consolidation, the Company shall be able to fulfill the
conditions set forth in subsection 4.3.
5.3 Ownership of Retail Sellers and Wholesale Seller. The
Company shall maintain ownership of all of the issued and outstanding
shares of each class of capital stock of each Retail Seller and the
Wholesale Seller.
5.4 Maintenance of Separate Existence. Each Seller hereby
agrees that, so long as the Long Term Commitments remain in effect, any
Certificate remains outstanding or any other amount is owing to any Bank or
the Agent hereunder, such Seller shall do all things necessary to maintain
its corporate existence separate and apart from CCC, the Company and other
Affiliates of the Seller, including, without limitation, (i) practicing and
adhering to corporate formalities, such as maintaining appropriate
corporate books and records; (ii) maintaining all of its deposit and other
bank accounts and all of its assets separate from those of any other
Person; (iii) maintaining all of its financial records separate and apart
from those of any other Person; (iv) maintaining its own separate telephone
number, stationery and business forms; (v) accounting for and managing all
of its liabilities separately from those of any of its Affiliates; (vi)
refraining from filing or otherwise initiating or supporting the filing of
a motion in any bankruptcy or other insolvency proceeding involving the
Seller, CCC, the Company, or any other Affiliate of Seller, to
substantively consolidate the Seller with CCC, the Company or any other
Affiliate of Seller; (vii) conducting transactions with its Affiliates only
on an arm's length basis; (viii) refraining from having its obligations
guaranteed by any of its Affiliates and (ix) conducting all of its business
(whether written or oral) solely in its own name.
SECTION 6. GUARANTEE
6.1 Guarantee. (a) The Company hereby unconditionally and
irrevocably covenants and agrees that it will cause CCC duly and punctually
to perform and observe all of the terms, conditions, covenants, agreements
and indemnities of CCC under this Long Term RPA and the Related Documents
strictly in accordance with the terms hereof and thereof and that if for
any reason whatsoever CCC shall fail to so perform and observe such terms,
conditions, covenants, agreements and indemnities, the Company will duly
and punctually perform and observe the same.
(b) The liabilities and obligations of the Company under this
subsection 6.1 shall be absolute and unconditional under all circumstances
and shall be performed by the Company regardless of (i) whether the Banks
shall have taken any steps to collect from CCC any of the amounts payable
by CCC to the Banks under this Long Term RPA or the Related Documents or
shall have otherwise exercised any of their rights or remedies under this
Long Term RPA against CCC, (ii) the validity, legality or enforceability of
this Long Term RPA or of any of the Related Documents, or the disaffirmance
of any thereof in any insolvency, bankruptcy or reorganization proceedings
relating to CCC, (iii) any law, regulation or decree now or hereafter in
effect which might in any manner affect any of the terms or provisions of
this Long Term RPA or any Related Document or any of the rights of the
Banks as against CCC or which might cause or permit to be invoked any
alteration in the time, amount, manner or payment or performance of this
Long Term RPA or any Related Document, (iv) the merger or consolidation of
CCC into or with any corporation or any sale or transfer by CCC of all or
any part of its property, or (v) any other circumstances whatsoever (with
or without a notice to or knowledge of the Company) which may or might in
any manner or to any extent vary the risk of the Company, or might
otherwise constitute a legal or equitable discharge of a surety or
guarantor; it being the purpose and intent of the Company that the
liabilities and obligations of the Company under this subsection 6.1 shall
be absolute and unconditional under any and all circumstances, and shall
not be discharged except by payment and performance as in this Long Term
RPA provided.
(c) Without in any way affecting or impairing the liabilities
and obligations of the Company under this subsection 6.1, the Banks may at
any time and from time to time in their discretion, without the consent of,
or notice to the Company, (i) extend or change the time, manner, place or
terms of payment of any or all of the amounts payable by CCC to the Banks
under this Long Term RPA or the Related Documents or amend, supplement,
waive, extend or otherwise modify any of the terms of this Long Term RPA or
the Related Documents or (ii) settle or compromise any of the amounts
payable by CCC to the Banks under this Long Term RPA or the Related
Documents or subordinate the same to the claims of others.
(d) The provisions of this subsection 6.1 shall continue to be
effective or be reinstated, as the case may be, if at any time payment of
any of the amounts payable by CCC to the Banks under this Long Term RPA or
the Related Documents is rescinded or must otherwise be restored or
returned by the Banks upon the insolvency, bankruptcy or reorganization of
CCC, or otherwise, all as though such payment had not been made. The
Company hereby waives (i) notice of the occurrence of any default
hereunder, (ii) any requirement of diligence or promptness on the part of
the Banks in making demand, commencing suit or exercising any other right
or remedy under this Long Term RPA or the Related Documents, or otherwise,
and (iii) any right to require the Banks to exercise any right or remedy
against CCC prior to enforcing any of its rights against the Company under
this subsection 6.1.
(e) The Company covenants and agrees that so long as any of the
amounts payable by CCC to the Banks under this Long Term RPA or any Related
Document remains unpaid, the Company will maintain ownership of not less
than 80% of the issued and outstanding shares of each class of capital
stock of CCC that is entitled to vote generally for the election of
directors; provided that nothing in this subsection 6.1 shall prevent the
merger or consolidation of the Company and CCC in accordance with
subsection 5.2 hereof.
SECTION 7. COMMITMENT TERMINATION EVENTS
If any of the following events shall occur and be continuing:
(a) (i) any Wholesale Non-Portfolio Early Amortization Event or
(ii) any Retail Non-Portfolio Termination Event shall occur; or any
CFC Party shall fail to pay any other amount payable hereunder, within
five days after any such other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made by the Company herein or
in any other Related Document or which is contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with this Long Term RPA shall prove to
have been incorrect in any material respect on or as of the date made;
or
(c) Any CFC Party shall default in the observance or performance
of any other agreement contained in this Long Term RPA (other than as
provided in paragraphs (a) through (b) of this Section), and such
default shall continue unremedied for a period of 30 days; or
(d) (i) The Company or any of the other CFC Parties shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
the Company or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced
against the Company or any of the other CFC Parties any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of 60 days; or (iii) there shall be commenced
against the Company or any of the other CFC Parties any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Company or any of the other CFC Parties shall take any
action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Company or any of the other CFC Parties shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event, (A) if such event is a Commitment Termination
Event specified in clause (i) or (ii) of paragraph (d) above, automatically
the Long Term Commitments shall immediately terminate without notice of any
kind, which is hereby waived by the CFC Parties and (B) if such event is
any other Commitment Termination Event, so long as such Commitment
Termination Event shall be continuing, with the consent of the Required
Banks, the Agent may, or upon the request of the Required Banks, the Agent
shall, by notice to the Company declare the Long Term Commitments to be
terminated forthwith, whereupon the Long Term Commitments shall immediately
terminate.
SECTION 8. THE AGENT AND ADMINISTRATIVE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Chemical Bank as the Agent and as Administrative Agent of such
Bank under this Long Term RPA and the Related Documents, and each such Bank
irrevocably authorizes Chemical Bank, as the Agent and as Administrative
Agent for such Bank, to take such action on its behalf under the provisions
of this Long Term RPA and the Related Documents and to exercise such powers
and perform such duties as are expressly delegated to the Agent or the
Administrative Agent, as the case may be, by the terms of this Long Term
RPA and the Related Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Long Term RPA, neither the Agent nor the
Administrative Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Long Term RPA or any
Related Document or otherwise exist against the Agent or the Administrative
Agent.
8.2 Delegation of Duties. Each of the Agent and the
Administrative Agent may execute any of its duties under this Long Term RPA
and the Related Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the Agent nor the Administrative Agent shall be
responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent, the
Administrative Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Long Term RPA or any Related Document (except
for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by any CFC Party or any
officer thereof contained in this Long Term RPA or any Related Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent or the Administrative Agent under
or in connection with, this Long Term RPA or any Related Document or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Long Term RPA or any Related Document or for any
failure of any CFC Party to perform its obligations hereunder or
thereunder. Neither the Agent nor the Administrative Agent shall be under
any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of,
this Long Term RPA or any Related Document, or to inspect the properties,
books or records of any CFC Party.
8.4 Reliance by Agent and Administrative Agent. The Agent and
the Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any CFC Party),
independent accountants and other experts selected by the Agent or the
Administrative Agent. The Agent and the Administrative Agent shall be
fully justified in failing or refusing to take any action under this Long
Term RPA or any Related Document unless it shall first receive such advice
or concurrence of the Required Banks, or, if required under this Long Term
RPA, all the Banks, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent and the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Long Term RPA and the Related Documents in accordance with a request
of the Required Banks, or, if required under this Long Term RPA, all the
Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks and all future holders of the
Certificates.
8.5 Notice of Default. Neither the Agent nor the Administrative
Agent shall be deemed to have knowledge or notice of the occurrence of any
Commitment Termination Event hereunder unless the Agent or the
Administrative Agent, as the case may be, has received notice from a Bank
or a CFC Party referring to this Long Term RPA, describing such Commitment
Termination Event and stating that such notice is a "notice of default".
In the event that the Agent or the Administrative Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall
take such action with respect to such Commitment Termination Event as shall
be reasonably directed by the Required Banks, or, if required under this
Long Term RPA, all the Banks; provided that unless and until the Agent
shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Commitment Termination Event as it shall deem advisable in
the best interests of the Banks.
8.6 Non-Reliance on Agent, Administrative Agent and Other Banks.
Each Bank expressly acknowledges that neither the Agent, the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Agent or the Administrative Agent hereinafter
taken, including any review of the affairs of the CFC Parties, shall be
deemed to constitute any representation or warranty by the Agent or the
Administrative Agent to any Bank. Each Bank represents to the Agent and
the Administrative Agent that it has, independently and without reliance
upon the Agent, the Administrative Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the CFC Parties, the
Wholesale Master Trust, the Retail Pooled Property and the Wholesale Trust
Assets and made its own decision to make its Purchases hereunder and enter
into this Long Term RPA and the other Related Documents to which it is a
party. Each Bank also represents that it will, independently and without
reliance upon the Agent, the Administrative Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Long Term RPA and the Related
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the CFC Parties, the Wholesale Master
Trust, the Retail Pooled Property and the Wholesale Trust Assets. Except
for notices, reports and other documents expressly required to be furnished
to the Banks by the Agent or the Administrative Agent hereunder, neither
the Agent nor the Administrative Agent shall have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the CFC Parties, the Wholesale
Master Trust, the Retail Pooled Property and the Wholesale Trust Assets
which may come into the possession of the Agent or the Administrative Agent
or any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify each of the
Agent and the Administrative Agent in their respective capacities as such
(to the extent not reimbursed by the CFC Parties and without limiting the
obligation of the CFC Parties to do so), ratably according to the
respective amounts of their respective Commitment Percentages in effect on
the date on which indemnification is sought under this subsection 8.7 (or,
if indemnification is sought after the date upon which the Long Term
Commitments shall have terminated, ratably in accordance with such
Commitment Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following
the payment of the Certificates) be imposed on, incurred by or asserted
against the Agent or the Administrative Agent, as the case may be, in any
way relating to or arising out of this Long Term RPA, any of the Related
Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Agent or the Administrative Agent, as the case may be, under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's or the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Certificates and all other
amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the CFC Parties as though the Agent were not the
Agent hereunder and under the Related Documents. With respect to any
interest in Retail Pooled Property or Wholesale Trust Assets the Agent may
from time to time hold, the Agent shall have the same rights and powers
under this Long Term RPA and the Related Documents as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent under this
Long Term RPA and the Related Documents, then the Required Banks shall
appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Company, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the
term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Long Term RPA or any
holders of the Certificates. After any retiring Agent's resignation as
Agent, the provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under
this Long Term RPA and the Related Documents.
8.10 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Agent. If
the Administrative Agent shall resign as Administrative Agent under this
Long Term RPA and the Related Documents, then the Agent shall appoint a
successor administrative agent for the Banks, which successor agent shall
be approved by the Company, whereupon such successor agent shall succeed to
the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any
of the parties to this Long Term RPA or any holders of the Certificates.
After any retiring Administrative Agent's resignation as Administrative
Agent, the provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Long Term RPA and the Related Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Long Term RPA, any
Related Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Agent and
the CFC Parties may, from time to time, enter into written amendments,
supplements or modifications hereto and to the Related Documents for the
purpose of adding any provisions to this Long Term RPA or the Related
Documents or changing in any manner the rights of the Banks or of the CFC
Parties hereunder or thereunder or waiving, on such terms and conditions as
the Agent may specify in such instrument, any of the requirements of this
Long Term RPA or the Related Documents or any Commitment Termination Event
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (a) reduce the amount or extend
the maturity of any Certificate or any installment thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any fee
payable to any Bank hereunder, or change the amount of any Bank's Long Term
Commitment, in each case without the consent of each Bank directly affected
thereby, or (b) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Banks or
waive any of the provisions of subsection 4.3 or change the definition of
Long Term Commitment Termination Date or reduce the percentages set forth
in "Required Subordinated Percentage" or "Required Reserve Percentage" in
the Long Term Wholesale Series Supplement or reduce the percentages set
forth in "Subordinated Percentage" or change the definition of "Minimum
Reserve Account Balance" or "Applicable Senior Percentage" in the Long Term
Retail PSA or amend Section 5.6 of the Long Term Retail PSA or amend
Sections 5.5 through 5.9 of the Long Term Wholesale Series Supplement, in
each case without the written consent of all the Banks, or (c) amend,
modify or waive any provision of Section 8 without the written consent of
the then Agent and Administrative Agent or (d) amend the Long Term
Wholesale Series Supplement without the satisfaction of the Rating Agency
Condition (as defined in the Wholesale PSA), if so required by the
Wholesale PSA. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding
upon the CFC Parties, the Banks, the Agent, the Administrative Agent and
all future holders of the Certificates. In the case of any waiver, the CFC
Parties, the Banks, the Agent and the Administrative Agent shall be
restored to their former position and rights hereunder and under the
Related Documents, and any Commitment Termination Event waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Commitment Termination Event, or impair any right
consequent thereon. Any amendment hereof or of the Related Documents can
be effected without the Administrative Agent being a party thereto.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy,
telegraph or telex, and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, certified
or registered mail, or by courier, in the case of telecopy notice, when
received, or, in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of telex notice, when sent, answerback
received, addressed as follows in the case of the CFC Parties, the Agent
and the Administrative Agent, and as set forth on its Addendum, or to such
other address as may be hereafter notified by the respective parties hereto
and any future holders of the Certificates:
CFC: Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: (810) 948-3801
CCC: Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: (810) 948-3801
The Wholesale
Seller: U. S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: 810-948-3801
The initial American Auto Receivables Company
Retail Seller: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Treasurer
Telex: 230663
Answerback: CHRYFINCL TRMI
Telecopy: 810-948-3801
The Agent Chemical Bank
and Administrative 270 Park Avenue
Agent: New York, New York 10017
Attention: John S. Cannon
Telephone: 212-270-4872
Telecopy: 212-270-1469
provided that any notice, request or demand to or upon the Agent or the
Banks pursuant to subsection 2.3 shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Long Term RPA.
9.5 Payment of Expenses and Taxes. The Company agrees:
(a) to pay or reimburse the Agent and the Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment,
supplement or modification to, this Long Term RPA, the Related Documents
and any other documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the fees and disbursements of
Simpson Thacher & Bartlett, special counsel to the Agent and the
Administrative Agent,
(b) to pay or reimburse each Bank, the Administrative Agent and
the Agent for all its costs and expenses (other than legal fees and
disbursements) incurred in connection with the enforcement or preservation
of any rights under this Long Term RPA, the Related Documents and any such
other documents and the reasonable fees and disbursements of one firm of
special counsel to the Agent, the Administrative Agent and to the several
Banks,
(c) to pay, indemnify, and hold each Bank, the Administrative
Agent and the Agent harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes (excluding, with respect to any Bank,
net income and franchise taxes imposed with respect to net income), if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Long Term RPA,
the Related Documents and any such other documents, and
(d) to pay, indemnify, and hold each Bank, the Administrative
Agent and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (other than legal fees and
disbursements) of any kind or nature whatsoever (and, with respect to any
proceeding or related proceedings, the reasonable fees and disbursements of
one firm of special counsel in connection with such proceeding(s)) with
respect to the execution, delivery, enforcement, performance and
administration of this Long Term RPA, the Related Documents and any such
other documents (all the foregoing, collectively, the "indemnified
liabilities"), provided, that the Company shall have no obligation
hereunder to the Agent, the Administrative Agent or any Bank with respect
to indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent, the Administrative Agent or any such Bank or (ii)
the ordinary course administration of this Long Term RPA, the Related
Documents or such other documents by the Agent, the Administrative Agent or
any such Bank.
(e) The agreements in this subsection 9.5 shall survive payment
of the Certificates and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations; Purchasing Banks.
(a) This Long Term RPA shall be binding upon and inure to the benefit of
the CFC Parties, the Banks, the Agent, the Administrative Agent, all future
holders of the Certificates, and their respective successors and assigns,
except that no CFC Party may assign or transfer any of its rights or
obligations under this Long Term RPA without the prior written consent of
the Required Banks (other than in connection with the addition of an
additional Retail Seller pursuant to the terms hereof).
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
a Commercial Bank ("Participants") participating interests in any
Certificate held by such Bank, the Long Term Commitment of such Bank or any
other interest of such Bank hereunder. In the event of any such sale by a
Bank of participating interests to a Participant, such Bank's obligations
under this Long Term RPA to the other parties to this Long Term RPA shall
remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such
Certificate for all purposes under this Long Term RPA and the Company and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Long Term
RPA. No Participant shall have any rights under any Certificate (the
Participant's rights against such Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
Participant thereto) and all amounts payable with respect to the
Certificates shall be determined as if such Bank had not sold such
participations provided that (i) the terms of any participation agreement
or certificate relating to any such participation shall prohibit any
subparticipations by such participant; (ii) any such participation
agreement or certificate shall permit the Bank granting such participations
the right to consent to waivers, amendments or supplements to this Long
Term RPA and the Related Documents without the consent of such participant
except in the case of (a) waivers of any Commitment Termination Event
described in Section 7(a), and (b) any amendment or modification reducing
the amount or extending the maturity of any Certificate or any installment
thereof, or reducing the rate or extending the time of payment of interest
thereon, or reducing any fee payable to such Bank hereunder, in each case
to the extent such waiver, amendment or supplement directly affects such
participant and (iii) a participating interest of at least $5,000,000 shall
be sold pursuant to any such participation (unless, at the Company's
discretion, a lesser amount is mutually agreed upon between the Company and
such Bank).
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
any Bank, and, with the consent of the Company and the Agent (which in each
case shall not be unreasonably withheld or delayed) to one or more
additional Commercial Banks ("Purchasing Banks") all or a portion of its
rights and obligations under this Long Term RPA, the Related Documents and
the Certificates, pursuant to an Assignment and Acceptance, executed by
such Purchasing Bank, such transferor Bank and the Agent (and, in the case
of a Purchasing Bank that is not then a Bank, by the Company), and
delivered to the Agent for its acceptance and recording in the Register,
provided that (i) prior to the termination of the Long Term Commitments
(whether on the Long Term Commitment Termination Date or otherwise), any
such sale shall include a proportionate share of each of such transferor
Bank's Long Term Commitment, interests in Retail Pooled Property and
interests in Wholesale Trust Assets and, after any such termination, any
such sale may be of any combination of interests in Retail Pooled Property
and interests in Wholesale Trusts Assets, (ii) in the event of an
assignment of less than all of such Bank's obligations, (x) the principal
amount of such Bank's Long Term Commitment so sold (or, if no Long Term
Commitment is outstanding, the principal amount of interests in Retail
Pooled Property and Wholesale Trust Assets so sold) shall be in an
aggregate amount of $6,000,000 or more and (y) after giving effect to any
such assignment, the transferor Bank and the Purchasing Bank (in each case
together with any Bank which is an affiliate of such transferor Bank or
such Purchasing Bank, respectively) shall each have obligations hereunder
and under the Related Documents aggregating not less than $6,000,000
(unless, in each case, at the Company's discretion, a lesser amount is
agreed upon between the Company and such transferor Bank or Purchasing
Bank, respectively), and (iii) no assignment hereunder shall be effective
unless and until the Agent shall be given written notice of the Clearing
Account of the Purchasing Bank; provided, further, however, that no consent
by the Company shall be required in the case of assignments to a Commercial
Bank controlled by, controlling or under common control with an assignor
Bank or pursuant to a merger or consolidation of such Bank with another
entity on a similar transaction involving such Bank. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Purchasing
Bank thereunder shall be a party hereto and the Related Documents and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder with a Long Term Commitment as set forth
therein, and (y) the transferor Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Long Term RPA (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of a transferor Bank's
rights and obligations under this Long Term RPA and the Related Documents,
such transferor Bank shall cease to be a party hereto). Such Assignment
and Acceptance shall be deemed to amend this Long Term RPA to the extent,
and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under this Long Term RPA
and the Related Documents. On or prior to the effective date determined
pursuant to such Assignment and Acceptance, each Seller, at its own
expense, shall execute and deliver to the Agent in exchange for the
surrendered Retail Senior Certificate and Wholesale Senior Certificate a
new Retail Senior Certificate and Wholesale Senior Certificate issued in
the name of such Purchasing Bank pursuant to the Long Term Retail PSA and
the Long Term Wholesale Series Supplement and, if the transferor Bank has a
retained Long Term Commitment hereunder, new Retail Senior Certificate and
Wholesale Senior Certificate issued in the name of the transferor Bank.
(d) The Agent shall maintain at its address referred to in
subsection 9.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names, addresses and
Clearing Accounts of the Banks and the Long Term Commitment of, and
principal amount of the interests in Retail Pooled Property and Wholesale
Trust Assets sold to, each Bank from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the CFC
Parties, the Agent, the Administrative Agent and the Banks may treat each
Person whose name is recorded in the Register as the owner of the interests
in Retail Pooled Property and Wholesale Trust Assets recorded therein for
all purposes of this Long Term RPA. The Register shall be available for
inspection by the CFC Parties or any Bank at any reasonable time and from
time to time upon reasonable prior notice. The Agent shall give prompt
written notice to the Company of the making of any entry in the Register or
any change in any such entry.
(e) Upon its receipt of an Assignment and Acceptance executed by
a transferor Bank and a Purchasing Bank (and, in the case of a Purchasing
Bank that is not then a Bank or an affiliate thereof, by the Company and
the Agent), together with payment to the Agent of a registration and
processing fee of $2,500 (or such lesser amount as may be agreed to by the
Agent), the Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Banks and the Company.
(f) Each CFC Party authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning such CFC Party and its affiliates which has been delivered to
such Bank by or on behalf of such CFC Party pursuant to this Long Term RPA
or which has been delivered to such Bank by or on behalf of the Company in
connection with such Bank's credit evaluation of such CFC Party and its
affiliates prior to becoming a party to this Long Term RPA.
(g) If, pursuant to this subsection 9.6, any interest in this
Long Term RPA or any Certificate is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United States
or any State thereof, the transferor Bank shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to represent to
the transferor Bank (for the benefit of the transferor Bank, the Agent and
the CFC Parties) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the CFC Parties or the transferor
Bank with respect to any payments to be made to such Transferee in respect
of the Certificates, (ii) to furnish to the transferor Bank (and, in the
case of any Purchasing Bank registered in the Register, the Agent and the
CFC Parties) either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit of the
transferor Bank, the Agent and the CFC Parties) to provide the transferor
Bank (and, in the case of any Purchasing Bank registered in the Register,
the Agent and the CFC Parties) a new Form 4224 or Form 1001 upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard
to such withholding tax exemption.
9.7 Clearing Accounts. (a) Each Bank irrevocably authorizes
the Agent and the Administrative Agent to cause such Bank's Clearing
Account to be debited as contemplated in subsection 2.3 and to cause to be
created an overdraft in such account if the balance in such Bank's Clearing
Account on a particular date is less than the amount of the Purchase to be
made by such Bank on such day. In addition each Bank irrevocably
authorizes the Agent and the Administrative Agent to cause such Bank's
Clearing Account to be credited, as contemplated in subsection 2.7(a), with
its ratable share of payments received by the Agent from the Sellers. The
Clearing Account of each Bank shall be maintained at its own expense and
free of charge to the Agent, the Administrative Agent and the Company.
(b) The Agent may at any time in its sole discretion, upon
notice to the Company and the Banks, discontinue the use of ACH procedures
in connection with Purchases made pursuant hereto, and the Banks shall
thereafter fund each Purchase required to be made by them hereunder by
making available the amount thereof to the Agent for the account of the
Sellers at the office of the Agent set forth in subsection 9.2 in funds
immediately available to the Agent.
9.8 Adjustments; Set-off.
(a) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of its investments in Retail Pooled Property or
Wholesale Trust Assets, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 7(d), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's
investments in Retail Pooled Property or Wholesale Trust Assets, or
interest thereon, such benefitted Bank shall purchase for cash from the
other Banks such portion of each such other Bank's investments in Retail
Pooled Property or Wholesale Trust Assets, or shall provide such other
Banks with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Bank to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Banks; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Each CFC Party
agrees that each Bank so purchasing a portion of another Bank's investments
in Retail Pooled Property or Wholesale Trust Assets may exercise all rights
of payment (including, without limitation, rights of set-off) with respect
to such portion as fully as if such Bank were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Banks provided
by law, each Bank shall have the right, without prior notice to any CFC
Party, any such notice being expressly waived by each CFC Party to the
extent permitted by applicable law, upon any amount becoming due and
payable by such CFC Party hereunder or under the Related Documents (whether
at the stated maturity, by acceleration or otherwise) to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Bank or any branch or agency thereof to
or for the credit or the account of such CFC Party, provided, however, that
no Bank which maintains any bank account for the benefit of the Wholesale
Master Trust or the Wholesale Trustee shall exercise any right of set-off
or counterclaim or similar right with respect to amounts on deposit in such
bank account. Each Bank agrees promptly to notify the Company and the
Agent after any such set-off and application made by such Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
9.9 Counterparts. This Long Term RPA may be executed by one or
more of the parties to this Long Term RPA on any number of separate
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this
Long Term RPA signed by all the parties shall be lodged with the Company
and the Agent.
9.10 Severability. Any provision of this Long Term RPA which 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.
9.11 Integration. This Long Term RPA represents the agreement
of the CFC Parties, the Agent, the Administrative Agent and the Banks with
respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank
relative to subject matter hereof not expressly set forth or referred to
herein or in the Related Documents.
9.12 GOVERNING LAW. THIS LONG TERM RPA AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS LONG TERM RPA SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
9.13 Submission To Jurisdiction; Waivers. Each CFC Party hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Long Term RPA and the Related Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
9.14 Acknowledgements. Each CFC Party hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Long Term RPA and the Related Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship to such Person, and the relationship between Agent and
Banks, on one hand, and such Person, on the other hand, is solely that
of debtor and creditor; and
(c) no joint venture exists among the Banks or among the CFC
Parties and the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Long Term
RPA to be duly executed and delivered in New York, New York by their proper
and duly authorized officers as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION
By /s/ D.M. Cantwell
Title: Vice President - Corporate
Finance and Development
CHRYSLER CREDIT CORPORATION
By /s/ D.A. Robison
Title: Vice President
and Treasurer
U.S. AUTO RECEIVABLES COMPANY
By /s/ John J. Shea
Title: Assistant Treasurer
AMERICAN AUTO RECEIVABLES COMPANY
By /s/ John J. Shea
Title: Assistant Treasurer
CHEMICAL BANK,
as Agent and as Administrative Agent
By /s/ Karen Sager
Title: Vice President
<PAGE>
ANNEX 1
to Long Term RPA
CERTAIN DEFINITIONS
The following terms shall have the following meanings:
"ACH": an Automated Clearing House.
"Accrual Period": (i) with respect to any Retail Distribution
Date, the period from and including the preceding Retail Distribution Date
(or, with respect to the initial Retail Distribution Date, the Effective
Date) to but excluding such Retail Distribution Date, or (ii) with respect
to any Wholesale Distribution Date, the period from and including the
preceding Wholesale Distribution Date (or, with respect to the initial
Wholesale Distribution Date, the Effective Date) to but excluding such
Wholesale Distribution Date.
"Active Retail Seller": the Retail Seller which became party to
the Long Term RPA last in time.
"Addendum": an instrument, substantially in the form of
Exhibit A to the Long Term RPA, by which a Bank becomes a party to the Long
Term RPA, the Long Term Retail PSA and the Long Term Wholesale Series
Supplement.
"Additional Seller Supplement": an instrument, substantially in
the form of Exhibit G to the Long Term Retail PSA, by which a Retail Seller
becomes a party to the Long Term RPA and the Long Term Retail PSA.
"Administrative Agent": Chemical Bank, a New York banking
corporation, in its capacity as administrative agent for the Banks under
the Long Term RPA, or any successor.
"Affiliate": of any corporation, shall mean any Person that,
directly or indirectly, controls or is controlled by or is under common
control with such corporation. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agent": Chemical Bank, a New York banking corporation, in its
capacity as agent for the Banks under the Long Term RPA, or any successor.
"Aggregate Invested Amount": at any time of determination, the
sum of the Retail Senior Amount at such time and the Wholesale Aggregate
Senior Invested Amount at such time.
"Applicable Invested Amount": with respect to any Reference
Bank, (i) with respect to a determination of the LIBO Rate for purposes of
the Long Term Retail PSA, such Reference Bank's Commitment Percentage of
the Retail Senior Amount and (ii) with respect to a determination of the
LIBO Rate for purposes of the Long Term Wholesale Series Supplement, the
"Bank Invested Amount" of such Reference Bank under and as defined in the
Long Term Wholesale Series Supplement.
"Assessment Rate": for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by
the Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Agent to the Federal Deposit
Insurance Corporation (or any successor) for insurance by such Corporation
(or any successor) of time deposits made in dollars at the Agent's domestic
offices.
"Assignment and Acceptance": an instrument, substantially in the
form of Exhibit E to the Long Term RPA, pursuant to which a Purchasing Bank
acquires all or a portion of another Bank's Long Term Commitment and
Certificates.
"Banks": as defined in the preamble to the Long Term RPA.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Effective Federal Funds Rate in effect on such day plus 1/2
of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by Chemical as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly
announced. "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any day,
the secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day shall not be a Business
Day, the next preceding Business Day) by the Federal Reserve Board through
the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Federal Reserve
Board, be published in Federal Reserve Statistical Release H.15(519) during
the week following such day), or, if such rate shall not be so reported for
such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day shall not be a Business Day,
on the next preceding Business Day) by the Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it. If for any reason the Agent shall have determined (which
determination shall be conclusive absent clearly demonstrable error) that
it is unable to ascertain the Base CD Rate or the Effective Federal Funds
Rate or both for any reason, including the inability or failure of the
Agent to obtain sufficient quotations in accordance with the terms thereof,
the Base Rate shall be determined without regard to clause (b) or (c), or
both, of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in
the Base Rate due to a change in the Prime Rate, the Three-Month Secondary
CD Rate or the Effective Federal Funds Rate shall be effective on the
effective date of such change in the Prime Rate, the Three-Month Secondary
CD Rate or the Effective Federal Funds Rate, respectively.
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by
law to close, except that, when used in connection with a Purchase with
respect to which the LIBO Rate is determined based upon the Telerate screen
in accordance with the definition of LIBO Rate, "Business Day" shall mean
any Business Day on which dealings in foreign currencies and exchange
between banks may be carried on in London, England and New York, New York.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation.
"CARCO": Chrysler Auto Receivables Company, a Delaware
corporation.
"Certificates": collectively, the Retail Senior Certificates and
the Wholesale Senior Certificates.
"CCC": Chrysler Credit Corporation, a Delaware corporation or
any successor.
"CFC": Chrysler Financial Corporation, a Michigan corporation.
"CFC Party": each of CFC, CCC, the Retail Sellers and the
Wholesale Seller.
"CFC Revolving Credit Agreement": the Revolving Credit
Agreement, dated as of May 23, 1994, among CFC, the banks parties thereto,
the Co-Agents parties thereto, Chemical Securities Inc., as arranger, and
Chemical Bank, as agent, as amended, supplemented, modified, renewed or
replaced from time to time.
"Chemical": Chemical Bank, a New York banking corporation or any
successor.
"Chrysler": Chrysler Corporation, a Delaware corporation.
"Clearing Account": shall mean, as to any Bank, the bank account
designated in its Addendum, or such other bank account as such Bank shall
designate in writing to the Agent from time to time, provided that such
other bank account shall be maintained at the office of an ACH member.
"Commercial Bank": shall mean any Person (a) licensed to engage
in commercial banking business and (b) which on the date it becomes a Bank
hereunder (i) is entitled to receive payments under this Agreement and the
Related Documents without deduction or withholding of any United States
federal income taxes and (ii) is entitled to an exemption from, or is not
subject to, United States backup withholding tax.
"Commitment Percentage": as to any Bank at any time, the
percentage of the Long Term Aggregate Commitment Amount then constituted by
such Bank's Long Term Commitment.
"Commitment Termination Event": any of the events specified in
Section 7 of the Long Term RPA, provided that any requirement for the
giving of notice, the lapse of time, or both, or any other condition, has
been satisfied.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default Rate": the Base Rate plus 2%.
"Distribution Dates": the collective reference to the Retail
Distribution Date and the Wholesale Distribution Date.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Effective Date": as defined in subsection 4.1 of the Long Term RPA.
"Effective Federal Funds Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions between
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average quotations for the day of such transactions
received by the Agent from three Federal funds brokers of recognized
standing selected by it.
"Eurodollar Margin": if Utilization is less than or equal to
33-1/3%, .4375 of 1% per annum, or if Utilization is greater than 33-1/3%,
.5625 of 1% per annum.
"Existing Standby Long Term RPA": the Amended and Restated
Standby Receivables Purchase Agreement, dated as of September 15, 1993,
among CFC, CCC, the Wholesale Seller, the Retail Sellers, the banks party
thereto, Chemical Bank, as agent, and Chemical Bank Agency Services
Corporation, as administrative agent, as in effect immediately prior to the
Effective Date of the Long Term RPA.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Indebtedness": of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under leases which appear as
capital leases on a consolidated balance sheet of such Person prepared in
accordance with GAAP and (c) all obligations of such Person in respect of
acceptances issued or created for the account of such Person.
"LIBO Rate": with respect to any Accrual Period, the rate per
annum determined on the basis of the rate for deposits in Dollars for a
period equal to such Accrual Period commencing on the first day of such
Accrual Period appearing on Page 3750 of the Telerate screen as of 11:00
A.M., London time, two Business Days prior to the beginning of such Accrual
Period. In the event that such rate does not appear on Page 3750 of the
Telerate Service (or otherwise on such service), the "LIBO Rate" shall be
determined by reference to such other publicly available service for
displaying eurodollar rates as may be agreed upon by the Agent and CFC or,
in the absence of such agreement, the "LIBO Rate" shall instead be the rate
per annum equal to the average (rounded upwards, if necessary, to the
nearest 1/100th of 1%) of the respective rates notified to the Agent by
each of the Reference Banks as the rate at which such Reference Bank is
offered Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Accrual Period, in the
interbank eurodollar market where the relevant eurodollar and foreign
currency and exchange operations are then being conducted for delivery on
the first day of such Accrual Period for the number of days comprised
therein and in an amount equal to the amount of the Applicable Invested
Amount of such Reference Bank to be outstanding during such Accrual Period.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or other security
agreement of any kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement, and any financing
lease having substantially the same economic effect as any of the
foregoing).
"Long Term Aggregate Commitment Amount": $1,000,000,000, which
amount may be changed from time to time pursuant to subsection 2.5 or 2.9
of the Long Term RPA.
"Long Term Commitment": as to any Bank, the obligation of such
Bank to purchase undivided participating interests in Retail Pooled
Property and Wholesale Trust Assets hereunder in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Bank's name on Schedule I to the Long Term RPA in the column
designated "Long Term Commitments".
"Long Term Commitment Period": the period from and including the
Effective Date to but not including the Long Term Commitment Termination
Date or such earlier date on which the Long Term Commitments shall
terminate as provided in the Long Term RPA.
"Long Term Commitment Termination Date": May 22, 1998, or if
such day is not a Business Day, the next preceding Business Day.
"Long Term Retail PSA": the Long Term Participation and
Servicing Agreement, dated as of May 23, 1994, among the Retail Sellers,
CCC, the Banks, the Agent and the Administrative Agent, substantially in
the form of Exhibit B to the Long Term RPA, as the same may be amended,
supplemented or otherwise modified from time to time.
"Long Term RPA": the Long Term Receivables Purchase Agreement,
dated as of May 23, 1994, among CFC, CCC, the Wholesale Seller, the Retail
Sellers, the Banks, the Agent and the Administrative Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"Long Term Wholesale Series Supplement": the Long Term Bank
Supplement to the Wholesale PSA, dated as of May 23, 1994, among the
Wholesale Seller, the Wholesale Trustee, CCC, the Banks, the Agent and the
Administrative Agent, substantially in the form of Exhibit C to the Long
Term RPA, as the same may be amended, supplemented or otherwise modified
from time to time.
"Material Adverse Effect": a material adverse effect on (a) the
ability of any CFC Party to perform its obligations under the Long Term RPA
or the Related Documents or (b) the validity or enforceability of the Long
Term RPA or any of the Related Documents.
"Participant": as defined in subsection 9.6(b) of the Long Term RPA.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Purchase Date": any Business Day specified in a notice pursuant
to subsection 2.3 of the Long Term RPA as a date on which a Seller requests
the Banks to make a Purchase under the Long Term RPA.
"Purchases": the collective reference to Retail Purchases and
Wholesale Purchases.
"Purchasing Banks": as defined in subsection 9.6(c) of the Long
Term RPA.
"Reference Banks": shall mean Chemical, Swiss Bank Corporation,
New York Branch, NBD Bank, N.A. and The Royal Bank of Canada.
"Related Documents": the Long Term Retail PSA, the Long Term
Wholesale Series Supplement, the Retail Certificates, the Wholesale
Certificates, the Retail Purchase Agreement, the Wholesale PSA, the
Receivables Purchase Agreement, referred to in the Wholesale PSA, each
"Assignment" (as defined in the Long Term Retail PSA), and each "Interest
Rate Cap Agreement" (as defined in the Long Term Retail PSA).
"Required Banks": at any time, Banks the Commitment Percentages
of which aggregate at least 51% or, if the Long Term Commitments have
terminated, Banks holding Certificates representing at least 51% of the
Aggregate Invested Amount.
"Requirement of Law": as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Responsible Officer": at any particular time, the Chairman of
the Board, the President, the chief financial officer, the Vice
President-Corporate Finance and Development, the Treasurer or the
Controller of the Company.
"Retail Addition Date": as defined in subsection 4.4 of the Long
Term RPA.
"Retail Certificates": the Retail Senior Certificates and the
"Subordinated Certificate" issued pursuant to the Long Term Retail PSA.
"Retail Distribution Date": "Distribution Date", as defined in
the Long Term Retail PSA.
"Retail Non-Portfolio Termination Event": any of the following
events:
(a) failure on the part of any Retail Seller or CFC,
as applicable, to make any payment or deposit required by the
terms of the Long Term Retail PSA or any Retail Purchase
Agreement within two Business Days after any such payment or
deposit is required to be made in accordance with the terms thereof;
(b) any Retail Seller shall default in the observance
or performance of any agreement contained in Section 7.1(b)(i) of
the Long Term Retail PSA;
(c) any Retail Seller or CFC shall default in the
observance or performance of any other agreement, covenant or
term contained in the Long Term Retail PSA or any Retail Purchase
Agreement, and such default shall continue unremedied for a
period of 30 days after receipt by the Active Retail Seller of
notice of such default from the Agent;
(d) any representation or warranty made by CFC in any
Retail Purchase Agreement or any Retail Seller in the Long Term
Retail PSA shall prove to have been incorrect in any material
respect on or as of the date made or deemed made, and shall
continue to be incorrect in any material respect 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 by the
Agent to the Active Retail Seller; provided, however, a Retail
Non-Portfolio Termination Event shall not be deemed to have
occurred if such representation or warranty relates to a
"Contract" conveyed under the Long Term Retail PSA and the Retail
Sellers have repurchased such Contract during such period in
accordance with the provisions of the Long Term Retail PSA; or
(e) a Retail Service Default.
"Retail Pooled Property": "Pooled Property", as defined in the
Long Term Retail PSA.
"Retail Portfolio Termination Event": any of the following events:
(a) the Retail Senior Amount is greater than zero and
the amount on deposit in the "Reserve Account" maintained under
and pursuant to the Long Term Retail PSA equals zero;
(b) on any Retail Distribution Date, the percentage
equivalent of the decimal obtained by dividing (i) Realized
Losses with respect to all retail automobile installment sale
contracts of CFC and its subsidiaries (including contracts sold
subject to limited recourse provisions) during the three calendar
months ended prior to such Retail Distribution Date by (ii) total
collections plus Realized Losses, in each case with respect to
all such contracts during such three month period, exceeds 4.5%;
or
(c) any "Event of Default" under and as defined in the
CFC Revolving Credit Agreement has occurred and is continuing.
"Retail Purchase": as defined in subsection 2.1 of the Long Term
RPA.
"Retail Purchase Agreement": a "Purchase Agreement", as defined
in the Long Term Retail PSA.
"Retail Seller": as defined in the preamble to the Long Term RPA.
"Retail Senior Amount": the "Senior Amount", as defined in the
Long Term Retail PSA.
"Retail Senior Certificates": "Senior Certificates", as defined
in the Long Term Retail PSA.
"Retail Servicer": CCC, in its capacity as servicer under the
Long Term Retail PSA and any successor as servicer thereunder.
"Retail Service Default": a "Service Default", as defined in the
Long Term Retail PSA.
"Seller": each of the Wholesale Seller and the Retail Sellers.
"Servicer": shall have the meaning assigned in the Long Term
Retail PSA.
"Statutory Reserves": a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum applicable reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Federal Reserve Board
and any other banking authority to which the Agent is subject with respect
to the Base CD Rate (as such term is used in the definition of "Base
Rate"), for new negotiable nonpersonal time deposits in Dollars of over
$100,000 with maturities approximately equal to three months. Statutory
Reserves shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned.
"Transferee": as defined in subsection 9.6(f) of the Long Term RPA.
"Utilization": as of the last day of any Accrual Period, the
percentage equivalent of a fraction (i) the numerator of which is the
average daily Long Term Aggregate Invested Amount during such Accrual
Period and (ii) the denominator of which is the average daily Long Term
Aggregate Commitment Amount during such Accrual Period. If for any reason
there is any Long Term Aggregate Invested Amount after the termination of
the Long Term Commitments, the Utilization for each day on or after the
date of such termination shall be deemed to be greater than 33-1/3% (or, in
the case of any such termination occurring on the Long Term Commitment
Termination Date, the actual Utilization on such date immediately prior to
giving effect to such termination).
"Wholesale Aggregate Senior Invested Amount": the "Aggregate
Bank Invested Amount", as defined in the Long Term Wholesale Series
Supplement.
"Wholesale Certificates": the Wholesale Senior Certificates
issued pursuant to the Long Term Wholesale Series Supplement.
"Wholesale Distribution Date": a "Distribution Date", as defined
in the Long Term Wholesale Series Supplement.
"Wholesale Early Amortization Event": an "Early Amortization
Event", as defined in the Long Term Wholesale Series Supplement.
"Wholesale Master Trust": CARCO Auto Loan Master Trust,
established pursuant to the Wholesale PSA.
"Wholesale Non-Portfolio Early Amortization Event": a Wholesale
Early Amortization Event of the type described in Section 9.01 of the
Wholesale PSA or clause (c) or (f) of Section 7.1 of the Long Term
Wholesale Series Supplement.
"Wholesale Portfolio Early Amortization Event": a Wholesale
Early Amortization Event other than a Wholesale Non-Portfolio Early
Amortization Event.
"Wholesale PSA": the Pooling and Servicing Agreement, dated as
of May 31, 1991, as assigned by CARCO to the Wholesale Seller on August 8,
1991, among the Wholesale Seller, CCC, as Servicer, and the Wholesale
Trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"Wholesale Purchase": as defined in subsection 2.1 of the Long
Term RPA.
"Wholesale Seller": as defined in the preamble to the Long Term
RPA.
"Wholesale Senior Certificate Sublimit": the lesser of (a)
66-2/3% of the Long Term Aggregate Commitment Amount and (b) $666,666,667.
"Wholesale Senior Certificates": the "Bank Series Certificates",
as defined in the Long Term Wholesale Series Supplement.
"Wholesale Servicer": CCC, in its capacity as servicer under the
Wholesale PSA, and any successor as servicer thereunder.
"Wholesale Trust Assets": "Trust Assets", as defined in the
Wholesale PSA.
"Wholesale Trustee": Manufacturers and Traders Trust Company and
its successors as Trustee under the Wholesale PSA.
Exhibit 10-I
CONFORMED COPY
LONG TERM
PARTICIPATION AND SERVICING AGREEMENT
among
AMERICAN AUTO RECEIVABLES COMPANY
CHRYSLER CREDIT CORPORATION,
THE PURCHASERS NAMED HEREIN,
CHEMICAL BANK,
as Agent
and
as Administrative Agent
dated as of May 23, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Usage of Terms . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3 Calculations . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.4 References . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Purchase and Sale of Certificates; Pooled Property
SECTION 2.1 Agreement to Purchase Receivables. . . . . . . . . . . . 2
SECTION 2.2 Conveyance of Fixed Value Payments . . . . . . . . . . . 3
SECTION 2.3 Addition of Sellers. . . . . . . . . . . . . . . . . . . 3
SECTION 2.4 Warranties as to Each Receivable . . . . . . . . . . . . 3
SECTION 2.5 Warranties as to the Receivables in the Aggregate and
Actions of the Seller. . . . . . . . . . . . . . . . . 7
SECTION 2.6 Repurchase Upon Breach . . . . . . . . . . . . . . . . . 8
SECTION 2.7 Custody of Receivable Files. . . . . . . . . . . . . . . 8
SECTION 2.8 Duties of Servicer as Custodian. . . . . . . . . . . . . 9
SECTION 2.9 Instructions; Authority to Act . . . . . . . . . . . . . 10
SECTION 2.10 Custodian's Indemnification. . . . . . . . . . . . . . . 10
SECTION 2.11 Effective Period and Termination . . . . . . . . . . . . 10
ARTICLE III
Conditions Precedent
SECTION 3.1 Conditions Precedent to the Effectiveness of this
Long Term Retail PSA . . . . . . . . . . . . . . . . . 11
SECTION 3.2 Conditions Precedent to Addition of a Seller . . . . . . 12
SECTION 3.3 Conditions Precedent to Transfer of Receivables. . . . . 14
ARTICLE IV
Administration and Servicing of the Pooled Property
SECTION 4.1 Duties of Servicer; Delegations. . . . . . . . . . . . . 16
SECTION 4.2 Collection and Allocation of Receivable Payments . . . . 17
SECTION 4.3 Realization Upon Receivables . . . . . . . . . . . . . . 18
SECTION 4.4 Physical Damage Insurance. . . . . . . . . . . . . . . . 18
SECTION 4.5 Maintenance of Security Interests in Financed
Vehicles . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.6 Covenants of Servicer. . . . . . . . . . . . . . . . . . 18
SECTION 4.7 Purchase by Servicer Upon Breach . . . . . . . . . . . . 19
SECTION 4.8 Servicing Compensation; Servicer Expenses. . . . . . . . 19
SECTION 4.9 Servicer's Certificate . . . . . . . . . . . . . . . . . 20
SECTION 4.10 Quarterly and Annual Statements as to Compliance;
Notice of Service Default. . . . . . . . . . . . . . . 20
SECTION 4.11 Independent Certified Public Accountant's Reports. . . . 21
SECTION 4.12 Access to Certain Documentation and Information
Regarding Receivables; Required Purchaser's
Right to Request an Audit. . . . . . . . . . . . . . . 21
SECTION 4.13 Annual Opinion of Counsel. . . . . . . . . . . . . . . . 22
ARTICLE V
Distributions
SECTION 5.1 Establishment of Bank Accounts . . . . . . . . . . . . . 22
SECTION 5.2 Collections. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.3 Application of Collections . . . . . . . . . . . . . . . 24
SECTION 5.4 Advances . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.5 Additional Deposits. . . . . . . . . . . . . . . . . . . 26
SECTION 5.6 Distributions. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.7 Subordination; Reserve Account . . . . . . . . . . . . . 28
SECTION 5.8 Interest Rate Cap Agreements . . . . . . . . . . . . . . 30
ARTICLE VI
The Certificates; Transfers of Purchase Commitments
SECTION 6.1 The Certificates . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.2 Mutilated, Destroyed, Lost or Stolen Certificates. . . . 30
SECTION 6.3 Transfer and Exchange of Certificates. . . . . . . . . . 31
SECTION 6.4 Persons Deemed Owners. . . . . . . . . . . . . . . . . . 31
ARTICLE VII
The Seller
SECTION 7.1 Representations, Warranties and Covenants of the
Sellers. . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.2 Liability of Seller; Indemnities . . . . . . . . . . . . 34
SECTION 7.3 Limitation on Liability of Seller and Others . . . . . . 35
ARTICLE VIII
The Servicer; CCC
SECTION 8.1 Representations and Warranties of Servicer . . . . . . . 35
SECTION 8.2 Liability of Servicer; Indemnities . . . . . . . . . . . 37
SECTION 8.3 Limitation on Liability of Servicer and Others . . . . . 38
SECTION 8.4 Resignations . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX
Service Defaults
SECTION 9.1 Service Defaults . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.2 Administrative Agent to Act; Appointment of
Successor Servicer . . . . . . . . . . . . . . . . . . 41
SECTION 9.3 Effect of Servicing Transfer . . . . . . . . . . . . . . 41
SECTION 9.4 Notification to Certificateholders . . . . . . . . . . . 42
ARTICLE X
Termination
SECTION 10.1 Termination of this Long Term Retail PSA . . . . . . . . 42
SECTION 10.2 Repurchases of Pooled Property . . . . . . . . . . . . . 43
SECTION 10.3 Sale of Pooled Property. . . . . . . . . . . . . . . . . 43
ARTICLE XI
Miscellaneous
SECTION 11.1 Protection of Rights in Pooled Property. . . . . . . . . 44
SECTION 11.2 Limitation on Rights of Certificateholders . . . . . . . 46
SECTION 11.3 Increased Costs. . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.4 Payment of Expenses; Indemnity . . . . . . . . . . . . . 51
SECTION 11.5 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.7 Severability of Provisions . . . . . . . . . . . . . . . 51
SECTION 11.8 Intention of Parties . . . . . . . . . . . . . . . . . . 51
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.10 Survival of Representations and Warranties . . . . . . . 52
SECTION 11.11 No Petition. . . . . . . . . . . . . . . . . . . . . . . 52
ANNEXS
Annex 1 Schedule of Definitions
SCHEDULES
Schedule I Standard Receivables
Schedule II Fixed Value Receivables
Schedule III Location of Receivable Files
Schedule IV Lien Search and UCC Filing Jurisdiction
Schedule V Consents
EXHIBITS
Exhibit A Form of Senior Certificate
Exhibit B Form of Subordinated Certificate
Exhibit C Form of Servicer's Certificate
Exhibit D Form of Purchase Agreement
Exhibit E-1 Form of Closing Opinion
Exhibit E-2 Form of True Sale and Non-Substantive Consolidation
Opinions
Exhibit F Form of Assignment
Exhibit G Form of Additional Seller Supplement
Exhibit H Form of Senior Certificate Supplement
Exhibit I Form of Schedule of Anticipated Collections
Exhibit J Form of Seller Subordinated Note
<PAGE>
THIS LONG TERM PARTICIPATION AND SERVICING AGREEMENT dated as of
May 23, 1994 among CHRYSLER CREDIT CORPORATION, a Delaware corporation
("CCC"), the banks and other financial institutions parties hereto from
time to time (the "Purchasers"), AMERICAN AUTO RECEIVABLES COMPANY, a
Delaware corporation (the "Initial Seller"), each special purpose
subsidiary of CFC from time to time party hereto in its capacity as seller
of undivided interests in Receivables represented by Senior Certificates
(each, including the Initial Seller, in such capacity, a "Seller") and
CHEMICAL BANK, a New York banking corporation ("Chemical"), as agent for
the Purchasers (in such capacity, the "Agent"), and as administrative agent
for the Purchasers and the Seller as the holder of the Subordinated
Certificate referred to below (in such capacity, the "Administrative
Agent").
In consideration of the premises and of the mutual agreements
herein contained, and other good and valuable consideration, the receipt of
which is acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Definitions. Except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings specified in the Schedule
of Definitions annexed hereto as Annex 1.
SECTION 1.2 Usage of Terms. With respect to all terms used in
this Long Term Retail PSA, the singular includes the plural and the plural
the singular; words importing any gender include the other genders;
references to "writing" include printing, typing, lithography, and other
means of reproducing words in a visible form; references to agreements and
other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and
not prohibited by this Long Term Retail PSA; references to Persons include
their permitted successors and assigns; and the terms "include" or
"including" mean "include without limitation" or "including without
limitation."
SECTION 1.3 Calculations. All calculations of the amount of
interest accrued on the Certificates during any Collection Period shall be
made, in the case of interest accruing at the LIBO Rate, on the basis of a
360-day year for the actual days elapsed and, in the case of interest
accruing at the Base Rate, on the basis of a 365/6 day year for the actual
days elapsed. Interest on the Certificates distributable on a Distribution
Date shall accrue for the Accrual Period to which such Distribution Date
relates.
SECTION 1.4 References. All references to the Record Date prior
to the first Record Date following the initial Purchase shall be to the
initial Transfer Date. All references to the last day of a Collection
Period shall refer to the close of business on such day. All references
herein to the close of business shall mean the close of business, New York
City time. The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Long Term Retail PSA shall refer to this
Long Term Retail PSA as a whole and not to any particular provision of this
Long Term Retail PSA, and Section, Schedule and Exhibit references are to
this Long Term Retail PSA unless otherwise specified.
ARTICLE II
Purchase and Sale of Certificates; Pooled Property
SECTION 2.1 Agreement to Purchase Receivables. (a) Subject to
the terms and conditions set forth herein, on any date prior to the Retail
Commitment Termination Date, each Purchaser severally agrees to purchase on
each Transfer Date (each such purchase, a "Purchase") for a purchase price
equal to the product of such Purchaser's Commitment Percentage and the
Purchase Price of the Receivables being transferred on such date, an
undivided participating interest in the following, and the Active Seller
does hereby agree to sell, transfer, assign, set over and otherwise convey
to the Purchasers an undivided participating interest in the following on
the related Transfer Date (subject to the obligations herein):
(i) all right, title and interest of the Seller in and to the
Receivables Group, and all moneys due thereon, after the related
Cutoff Date, in the case of Precomputed Receivables, and all moneys
received thereon, after the related Cutoff Date, in the case of Simple
Interest Receivables;
(ii) the interest of the Seller in the security interests granted
by Obligors in the Financed Vehicles included in the Receivables Group
and any other interest of the Seller in such Financed Vehicles;
(iii) the interest of the Seller in any proceeds with respect to
the Receivables Group from claims on any physical damage, credit life
or disability insurance policies covering Financed Vehicles or
Obligors;
(iv) the interest of the Seller in any proceeds with respect to
the Receivables Group from recourse to the 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) on the initial Transfer Date with respect to such Seller,
all right, title and interest of such Seller in and to the Purchase
Agreement, including the right of the Seller to cause CFC to
repurchase Standard Receivables or Fixed Value Receivables from the
Seller under certain circumstances;
(vi) on the initial Transfer Date with respect to such Seller,
all right, title and interest of such Seller in all funds on deposit
from time to time in the Trust Accounts, including the Reserve Account
Deposit, and in all investments and proceeds thereof (including all
income thereon); and
(vii) the proceeds of any and all of the foregoing.
(b) The Purchasers shall not make any Purchase on any Transfer
Date if:
(i) the related Purchase Price is less than $50,000,000; or
(ii) after giving effect to the Purchase, the Aggregate Invested
Amount would exceed the Long Term Aggregate Commitment (determined as
of the date notice of such Purchase is given).
SECTION 2.2 Conveyance of Fixed Value Payments. Promptly
following the transfer to the Purchasers of the Receivables Group on each
Transfer Date, each Purchaser shall, severally and without further action,
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 such Purchaser 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
5.3(b).
SECTION 2.3 Addition of Sellers. Subject to the terms and
conditions hereof, from time to time a special purpose subsidiary of CFC
may become an additional Seller party hereto by executing an Additional
Seller Supplement hereto and a supplement to the Long Term RPA. From and
after the Seller Addition Date with respect to each additional Seller
through but excluding the next succeeding Seller Addition Date, all
Purchases shall be made with the Active Seller.
SECTION 2.4 Warranties as to Each Receivable. On each Transfer
Date, the Active Seller hereby makes the following warranties as to each
Receivable and the Related Property transferred on such date, on which the
Agent, the Administrative Agent and each Purchaser shall rely in accepting
such Receivable and such Related Property transferred on such date.
(a) Individual Characteristics of the Receivables. Each
Receivable and, where applicable, the related Contract (i) has been
originated in the United States of America by a Dealer in a retail
sale of a Financed Vehicle in the ordinary course of such Dealer's
business, has been fully and properly executed by the parties thereto,
has been validly assigned to CCC by such Dealer and by CCC to CFC and
has been purchased by, and validly assigned to, the Active Seller from
CFC and has been validly sold, transferred and assigned by the Active
Seller to the Purchasers in accordance with its terms and the terms of
the Purchase Agreement and this Long Term Retail PSA, (ii) is secured
by a perfected, valid, subsisting and enforceable first priority
security interest in favor of CCC in the related Financed Vehicle,
which security interest is assignable, and has been so assigned, by
CCC to CFC, by CFC to the Active Seller and by the Active Seller to
the Administrative Agent for the benefit of the Purchasers,
(iii) contains customary and enforceable provisions such that the
rights and remedies of the holder of such security interest are
adequate for realization against the collateral of the benefits of the
security, (iv) provides for level monthly payments which fully
amortize the Amount Financed over the original term (except for the
last payment of any Fixed Value Receivable) and provides for interest
at the related APR set forth in such related Contract and (v) has a
next Scheduled Payment not more than one month after the related
Cutoff Date.
(b) Schedule of Contracts; Calculations. The information set
forth in the supplements to Schedules I and II setting forth the
Standard Receivables and Fixed Value Receivables transferred by the
Active Seller on such date is true and correct as of the close of
business on the related Cutoff Date. The Principal Balance of each
Receivable has been accurately and correctly calculated.
(c) Compliance with Law. Each Contract with respect to any
Receivable and the sale of the related Financed Vehicle complied at
the time it was originated or made, and complies as of the date such
warranty is made, in all material respects with all requirements of
applicable federal, state, and local laws, and regulations thereunder,
including usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the Magnuson-Moss Warranty Act, Federal Reserve
Board Regulations B, AA and Z, state adaptations of the National
Consumer Act and of the Uniform Consumer Act and of the Uniform
Consumer Credit Code, and any other consumer credit, equal opportunity
and disclosure laws.
(d) Binding Obligation. Each Contract with respect to any
Receivable constitutes the genuine, legal, valid, and binding payment
obligation in writing of the Obligor, enforceable in accordance with
its terms.
(e) Contracts in Force. No Contract with respect to any
Receivable has been satisfied, subordinated, or rescinded, and the
Financed Vehicle has not been released from the Lien granted by such
Contract in whole or in part.
(f) No Amendment or Waiver. No provision of any Contract with
respect to any Receivable has been amended, waived, altered or
modified in any respect, except pursuant to a document, instrument or
written notation included in the Receivable File and no such amendment
or waiver causes such Contract not to conform to the other warranties
contained in this Section.
(g) No Defenses. No Contract with respect to any Receivable is
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and the operation of any of the terms
of such Contract, or the exercise of any right thereunder, will not
render such Contract unenforceable in whole or in part or subject to
any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto.
(h) No Liens. There are no liens or claims, including liens for
work, labor or materials relating to, or the storage of, the Financed
Vehicle, that are liens prior or equal to, the Lien granted by the
Contract with respect to any Receivable.
(i) No Default. Except for delinquent payments of not more than
90 days on any Contract, (i) no default, breach, violation, or event
permitting acceleration under the terms of a Contract with respect to
any Receivable exists, (ii) no continuing condition that with notice
or lapse of time, or both, would constitute a default, breach,
violation, or event permitting acceleration under the terms of a
Contract with respect to any Receivable has arisen and (iii) the
Active Seller has not waived any of the foregoing.
(j) Insurance. As of the execution of the Contract with respect
to any Receivable, a physical damage insurance policy covering the
Financed Vehicle securing such Receivable was in full force and
effect, in accordance with the Servicer's customary servicing
procedures.
(k) Valid Transfer. No Receivable has been sold, assigned,
pledged or otherwise conveyed by the Active Seller to any Person other
than the Purchasers pursuant hereto, and, immediately prior to the
transfer and assignment herein contemplated, the Active Seller had
good title to each Receivable free and clear of any Lien or other
right or interest of any other Person, was the sole owner thereof and
had full right and power to transfer and assign such Receivable to the
Purchasers. This Long Term Retail PSA constitutes a valid sale,
transfer and assignment to the Purchasers of all right, title and
interest of the Active Seller in and to the Receivables and all
proceeds (as defined in the UCC in effect in the State of New York)
thereof (other than the right, title and interest thereof which will
be retained by the Active Seller and evidenced by the Subordinated
Certificate), free and clear of any Lien or other right or interest of
any other Person.
(l) Lawful Assignment. No Receivable has been originated in or
is subject to the laws of any jurisdiction under which the sale,
transfer and assignment of such Receivable hereunder, or pursuant to
any issuance or transfer of the Senior Certificates, is unlawful,
void, or voidable.
(m) All Filings Made. All filings, including UCC filings,
necessary in any jurisdiction to give the Administrative Agent for the
benefit of the Purchasers a first priority perfected ownership
interest in each Receivable and the Related Property have been made
and Schedule IV sets forth the only locations where UCC filings are to
be made to give such a first priority perfected ownership interest.
(n) Valid Security Interest. On such Transfer Date, there shall
exist a valid, subsisting and enforceable first priority perfected
security interest in the Financed Vehicle securing the Receivable
related to such Financed Vehicle (subject to any statutory lien
arising by operation of law after such date which is prior to such
security interest) and, at such time as enforcement of such security
interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in the Financed
Vehicle in favor of the Administrative Agent for the benefit of the
Purchasers (subject to any statutory lien arising by operation of law
after such date which is prior to such interest).
(o) Capacity of Parties. All parties to each Contract with
respect to any Receivable had capacity to execute such Contract.
(p) Obligations; No Impairment. Each of the Active Seller, CCC,
CFC and the Dealer party to a Contract with respect to any Receivable
has duly fulfilled all obligations on its part to be fulfilled under,
or in connection with, such Contract and has done nothing to impair
the rights of the Agent, the Administrative Agent or any Purchaser in
such Contract or the proceeds thereof.
(q) No Fraud or Misrepresentation. No Contract with respect to
any Receivable was originated by a Dealer and sold by such Dealer to
CCC, by CCC to CFC, and by CFC to the Active Seller with any conduct
constituting fraud or misrepresentation on the part of such Person.
(r) Possession; One Original. For each Contract with respect to
any Receivable, there is only one original executed Contract, which on
such date will, together with the related Receivable File, be conveyed
hereunder by the Active Seller to the Purchasers and, pursuant to this
Long Term Retail PSA, will be held by the Servicer as bailee of the
Administrative Agent and the Purchasers. No other custodial
agreements are in effect other than as contemplated by the Purchase
Agreement.
(s) Bulk Transfer Laws. The transfer, assignment and conveyance
of each Receivable and the related Receivable File by the Active
Seller pursuant to this Long Term Retail PSA is not subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
SECTION 2.5 Warranties as to the Receivables in the Aggregate
and Actions of the Seller. On each Transfer Date, the Active Seller
warrants that:
(a) Aggregate Principal Balance. The aggregate Principal
Balance of the Receivables Group transferred on such date is
accurately set forth in the related Assignment. The information set
forth in the Schedule of Anticipated Collections with respect to the
Receivables Group transferred on such date is true and accurate as of
the close of business on the related Cutoff Date.
(b) Additional Characteristics of the Receivables. The
Contracts with respect to any Receivable being transferred on such
date have the following characteristics: (i) each Contract had an
original maturity of not more than 73 months and a remaining maturity
of not more than 65 months; (ii) the final scheduled payment date on
each Contract is no later than the Scheduled Maturity Date; (iii) each
Contract had a remaining gross balance of not less than $1,000; (iv)
no Contract was more than 90 days past due as of the related Cutoff
Date; (v) no Financed Vehicle had been repossessed, without
reinstatement of the related Contract, as of the related Cutoff Date;
(vi) no Obligor on any Contract was the subject of a bankruptcy
proceeding as of the related Cutoff Date; (vii) the Obligor on each
Contract is not the United States of America or any State or any
agency, department or instrumentality of any of the foregoing; (viii)
each Contract is covered by insurance in accordance with CCC's
customary servicing procedures; and (ix) with respect to the
Receivables Group transferred on such date, the aggregate Principal
Balance of the Receivables with respect to such Receivables Group
which are financed at CCC's used vehicle rate is not more than 50% of
the aggregate Principal Balance of all the Receivables with respect to
such Receivables Group.
(c) Selection Criteria. The Receivables purchased from CFC were
selected from among the receivables in CFC's portfolio that met the
criteria set forth in Sections 2.4 and 2.5(b) utilizing selection
procedures that were not adverse to the Purchasers.
(d) Computer Tape. The Computer Tape as prepared by the
Servicer and made available by the Seller on such date was complete
and accurate as of the related Cutoff Date and includes a description
of the same Receivables that are described in the supplements to
Schedules I and II, as delivered by the Active Seller by such date.
(e) Marking Records. By such Transfer Date, the Active Seller
has caused the Servicer to mark clearly and unambiguously the portions
of any electronic ledger relating to the Receivables transferred on
such date to show that such Receivables constitute part of the Pooled
Property and are owned by the Certificateholders in accordance with
the terms of this Long Term Retail PSA.
(f) Receivable File. Each document or instrument described in
paragraphs (a) through (d) of Section 2.7 as part of a Receivable File
is contained in each such Receivable File on such date.
(g) No Assignment. The Active Seller has not taken any action
to convey any right to any Person that would result in such Person
having a right to payments received under the Insurance Policies or
payments due in respect of the Receivables transferred on such date.
SECTION 2.6 Repurchase Upon Breach. Each Seller and the
Servicer shall inform each such other Person and each of the Agent and the
Administrative Agent promptly in writing upon the discovery of any breach
by such Seller of the warranties made by such Seller pursuant to Sections
2.4 or 2.5 and the Administrative Agent shall promptly transmit a copy of
such writing to the Purchasers. Unless the breach shall have been cured by
the second Determination Date immediately succeeding the date on which such
Seller becomes aware of, or is informed in writing of, such breach, such
Seller shall repurchase any Receivable materially and adversely affected by
any such breach as of such Determination Date; provided that in the event
of a breach with respect to any Receivable of a warranty made by such
Seller pursuant to Sections 2.4(h), 2.4(k) or 2.4(n), such Seller shall
repurchase such Receivable on the next succeeding Determination Date, but
only to the extent that it has become aware of or been informed in writing
of such breach by such time. In consideration of the repurchase of a
Receivable hereunder, the related Seller shall remit the Repurchase Amount
of such Receivable, no later than the close of business on the date
determined according to the preceding sentence and in the manner specified
in Section 5.5. Except with respect to the representation and warranty set
forth in Section 2.4(c), the sole remedy of the Agent, the Administrative
Agent or any Purchaser with respect to a breach of the warranties made by
any Seller pursuant to Sections 2.4 or 2.5 shall be to require such Seller
to repurchase Receivables pursuant to this Section 2.6.
SECTION 2.7 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs,
the Administrative Agent, the Agent and each Certificateholder, upon such
Person's execution and delivery of this Long Term Retail PSA, revocably
appoints the Servicer as agent, and the Servicer as agent for each such
Person accepts such appointment, to act as custodian on behalf of each such
Person of the following documents or instruments with respect to the
Receivables transferred on any Transfer Date (collectively, a "Receivable
File"), which will as of such Transfer Date be constructively delivered to
the Administrative Agent on behalf of the Certificateholders:
(a) the original Contracts in respect of the Standard
Receivables and Fixed Value Receivables transferred on such date;
(b) the original credit applications, in respect of such
Receivables, fully executed by the respective Obligors;
(c) the original certificates of title or such documents that
CCC or CFC shall keep on file, in accordance with its customary
procedures, evidencing the security interest of CFC in the Financed
Vehicles which secure such Receivables; and
(d) any and all other documents that CCC or the Active Seller
shall keep on file, in accordance with its customary procedures,
relating to the Standard Receivables or Fixed Value Receivables, the
Obligors or the Financed Vehicles.
Neither the Agent nor the Administrative Agent shall be obligated
to review any Receivable File to determine that each item referred to in
this Section 2.7 is contained therein.
SECTION 2.8 Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer, in its capacity as custodian, shall hold the Receivable Files
on behalf of the Administrative Agent for the benefit of all present and
future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable as
shall enable the Servicer, the Agent and the Administrative Agent to comply
with the terms and provisions of this Long Term Retail PSA applicable to
it. In performing its duties as custodian hereunder, 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 Long Term Retail PSA
and of the related accounts, records and computer systems, in such a manner
as shall enable the Administrative Agent to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the
Administrative Agent any failure on its part to hold the Receivable Files
and maintain its accounts, records and computer systems as herein provided
and 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 Administrative Agent or the Agent 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
III to this Long Term Retail PSA or at such other office as shall be
specified to the Administrative Agent and the Agent by written notice,
which notice shall state any change in such location and shall be received
on or prior to the date on which such location is changed. The Servicer
shall make available to the Administrative Agent and the Agent 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 as the
Administrative Agent or the Agent shall instruct.
(c) Release of Documents. Upon written instructions from the
Administrative Agent, the Servicer shall release any Receivable File to the
Administrative Agent or its respective agents or designees at such place or
places as the Administrative Agent may designate, as soon thereafter as is
practicable.
(d) Title to Receivables. The Servicer agrees that, in respect
of any Receivable held by the Servicer as custodian hereunder, the Servicer
will not at any time have or in any way attempt to assert any interest in
such Receivable or the related Receivable File, except that the Servicer
may assert an interest in such Receivable solely for the purpose of
collecting or enforcing the Receivable for the benefit of the
Administrative Agent and the Certificateholders. The entire equitable
interest in such Receivable and the related Receivable File shall at all
times be vested in the Certificateholders.
SECTION 2.9 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 an
assistant vice president or vice president of the Administrative Agent.
SECTION 2.10 Custodian's Indemnification. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Agent, the
Administrative Agent and each Purchaser from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever (including, without limitation, fees and
expenses of counsel and expenses of litigation) that may be imposed on,
incurred, or asserted against such Person as the result of any act or
omission by the Servicer relating to the maintenance and custody of the
Receivable Files; provided that the Servicer shall not be liable to any
Person hereunder to the extent, but only the extent, that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
result from the willful misfeasance, bad faith, or gross negligence of such
Person.
SECTION 2.11 Effective Period and Termination. The Servicer's
appointment as custodian shall be deemed to be effective as of the initial
Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section 2.11. If CCC shall resign as Servicer under
Section 8.4 or if all of the rights and obligations of CCC, as Servicer,
shall have been terminated under Section 9.1, the appointment of the
Servicer as custodian hereunder shall be deemed terminated by the
Administrative Agent and the Certificateholders on the effective date of
such resignation or termination pursuant to Sections 8.4 or 9.1,
respectively. As soon as practicable after any such termination, the
Servicer shall deliver or cause to be delivered the Receivable Files to the
Administrative Agent or its agent or designee at such place or places as
the Administrative Agent shall designate.
ARTICLE III
Conditions Precedent
SECTION 3.1 Conditions Precedent to the Effectiveness of this
Long Term Retail PSA. This Long Term Retail PSA shall become effective on
the date (the "Effective Date") that the Agent shall have received the
following:
(a) (i) This Long Term Retail PSA, duly executed and delivered
by the Initial Seller, the Servicer, the Administrative Agent and the
Agent and (ii) from each of the Persons listed on Schedule I to the
Long Term RPA, an executed Addendum;
(b) (i) For each Purchaser, a Senior Certificate conforming to
the requirements hereof and (ii) for the Initial Seller, a
Subordinated Certificate, in each case duly executed by the Initial
Seller;
(c) A copy of the Purchase Agreement between CFC and the Initial
Seller, duly executed and delivered by CFC and the Initial Seller;
(d) Copies of any certificates and opinions of counsel, in each
case also addressed to the Agent, the Administrative Agent and the
Purchasers, delivered under the Purchase Agreement;
(e) A certificate of a Responsible Officer of the Initial Seller
stating that the Purchase Agreement is in full force and effect and
all conditions precedent set forth therein have been satisfied (other
than any condition requiring that this Long Term Retail PSA be in full
force and effect);
(f) A certificate of the Secretary or an Assistant Secretary of
each of the Initial Seller, CFC and the Servicer certifying the names
and true signatures of the officers authorized on its behalf to sign
this Long Term Retail PSA, the Certificates (in the case of the
Initial Seller) and the other documents to be delivered by such Person
hereunder;
(g) A certificate of a Responsible Officer of the Initial Seller
stating that (i) duly executed proper UCC financing statements (Form
UCC-1), naming the Initial Seller as the seller with respect to the
Pooled Property and the Administrative Agent as the buyer with respect
thereto, have been properly filed in the appropriate filing offices in
the jurisdictions listed on Schedule IV or (ii) other similar
instruments or documents as may be necessary or in the opinion of the
Agent and its counsel desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests
in the Pooled Property have been so filed;
(h) A certificate of a Responsible Officer of CFC stating that
(i) duly executed proper UCC financing statements (Form UCC-1), naming
(A) each Dealer as the seller and CCC as the buyer, (B) CCC as the
seller and CFC as the buyer and (C) CFC as the seller and the Initial
Seller as the buyer, in each case with respect to the Receivables and
the other Transferred Property transferred (or to be transferred)
under and as defined in the Purchase Agreement, have been properly
filed in the appropriate filing offices in the jurisdictions listed on
Schedule 3 thereto or (ii) other similar instruments or documents as
may be necessary or in the opinion of the Agent desirable under the
UCC of all appropriate jurisdictions or any comparable law to perfect
the ownership interests in the Receivables and such other Transferred
Property have been so filed; and
(i) Results of a recent Lien, tax and judgment search from (1)
the jurisdictions listed on Schedule IV conducted by counsel to the
Initial Seller with respect to the Pooled Property and (2) the
jurisdictions listed on Schedule 3 to the Purchase Agreement conducted
by counsel to CFC with respect to the Transferred Property, each of
which shall reveal no Liens or other encumbrances on the Pooled
Property or the Transferred Property, as the case may be.
(j) Opinions of counsel to CFC, the Initial Seller and the
Servicer, addressed to the Agent, the Administrative Agent and each
Purchaser and substantially in the appropriate forms of Exhibits E-1
and E-2 hereto and as to such other matters as the Agent or the
Purchasers may reasonably request.
(k) An opinion of counsel to CFC and CCC, addressed to the
Agent, the Administrative Agent and each Purchaser, in a form that is
reasonably satisfactory to the Agent, as to the true sale nature of
the transfer of motor vehicle retail installment sales contracts and
the other property transferred under the Amended and Restated
Inter-Company Agreement dated as of January 1, 1984 (the "CFC-CCC
Agreement") among CFC, CCC and Chrysler Credit SBL Corporation.
(l) A certificate of a Responsible Officer of CFC and CCC
stating that the transfer of motor vehicle retail installment sales
contracts and the other property transferred under the CFC-CCC
Agreement (i) have been appropriately recorded on the books and
records of each of CCC and CFC and (ii) have been made in accordance
with the terms and conditions of the CFC-CCC Agreement.
SECTION 3.2 Conditions Precedent to Addition of a Seller. A
special purpose subsidiary of CFC shall become the Active Seller on the
date (with respect to such Active Seller, the "Seller Addition Date") that
the Agent shall have received the following:
(a) An Additional Seller Supplement, duly executed and delivered
by the Servicer, such Active Seller, the previous Sellers, the Agent
and the Administrative Agent;
(b) A Senior Certificate Supplement to each Senior Certificate,
duly executed and delivered by such Active Seller;
(c) A copy of a supplement to the Purchase Agreement,
substantially in the form of Exhibit B thereto, duly executed and
delivered by CFC and such Active Seller;
(d) A copy of the resolutions adopted by the Board of Directors
of each of CFC, CCC, such Active Seller and the previous Sellers
authorizing the execution and delivery of the Additional Seller
Supplement (and, in the case of such Active Seller, each Senior
Certificate Supplement) and any other documents to be delivered by
such Person hereunder, the performance of this Long Term Retail PSA as
supplemented by the Additional Seller Supplement and the transactions
contemplated hereby, including, in the case of such Active Seller, the
transfer of a first priority perfected ownership interest, in favor of
the Administrative Agent for the benefit of the Purchasers, in the
Receivables Group transferred on such date, certified by the Secretary
or Assistant Secretary of such Person;
(e) An updated Schedule IV and a certificate of such Active
Seller that (i) duly executed proper UCC financing statements (Form
UCC-1), naming such Active Seller as the seller with respect to the
Pooled Property and the Administrative Agent as the buyer with respect
thereto, have been properly filed in the appropriate filing offices in
all appropriate jurisdictions listed on Schedule IV or (ii) other
similar instruments or documents as may be necessary or in the opinion
of the Agent and its counsel desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the
ownership interests in the Pooled Property have been so filed;
(f) A certificate of CFC that (i) duly executed proper UCC
financing statements (Form UCC-1), naming (A) each Dealer as the
seller and CCC as the buyer, (B) CCC as the seller and CFC as the
buyer and (C) CFC as the seller and such Active Seller as the buyer,
in each case with respect to the Receivables and the other Transferred
Property transferred under and as defined in the Purchase Agreement as
supplemented, have been properly filed in the appropriate filing
offices in the jurisdictions listed on Schedule 3 thereto or (ii)
other similar instruments or documents as may be necessary or in the
opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests
in the Receivables and such other Transferred Property have been so
filed;
(g) Results of a recent Lien, tax and judgment search from (1)
the jurisdictions in which UCC financing statements are filed pursuant
to clause (e) above conducted by counsel to such Active Seller with
respect to the Pooled Property and (2) the jurisdictions listed on
Schedule 3 to the Purchase Agreement conducted by counsel to CFC with
respect to the Transferred Property, each of which shall reveal no
Liens or other encumbrances on the Pooled Property or the Transferred
Property, as the case may be;
(h) From each of such Active Seller, the Servicer and CFC, an
Officer's Certificate of such Person certifying that the
representations and warranties made by such Person in this Long Term
Retail PSA and any other agreements delivered by such Person in
connection herewith are true and correct on and as of such Seller
Addition Date as though made on and as of such date;
(i) Opinions of counsel to CFC, such Active Seller and the
Servicer, addressed to the Agent, the Administrative Agent and each
Purchaser and substantially in the appropriate forms of Exhibits E-1
and E-2 hereto and as to such other matters as the Agent or the
Purchasers may reasonably request.
SECTION 3.3 Conditions Precedent to Transfer of Receivables.
The agreement of the Purchasers to make a Purchase on any Transfer Date
(including, without limitation, the initial Transfer Date) is subject to
the condition that the Agent shall have received the following on or prior
to such Transfer Date:
(a) An Addition Notice;
(b) A written assignment, duly executed and delivered by the
Active Seller, in substantially the form of Exhibit F (the
"Assignment"), which shall include supplements to Schedules I or II,
as applicable, listing the Receivables transferred on such date;
(c) A certificate of a Responsible Officer of the Active Seller
stating that pursuant to Section 5.2, the Active Seller has deposited
in the Collection Account all collections in respect of the
Receivables transferred on such date;
(d) A certificate of a Responsible Officer of the Seller stating
that as of such Transfer Date, neither CFC nor the Active Seller is
insolvent nor will either of them be made insolvent by such transfer
nor is any of them aware of any pending insolvency;
(e) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has taken actions required to maintain
the first priority perfected ownership interest of the Purchasers in
the Pooled Property;
(f) A certificate of a Responsible Officer of the Active Seller
stating that no selection procedures believed by the Active Seller to
be adverse to the interests of the Purchasers have been utilized in
selecting the Receivables transferred on such date;
(g) A certificate of a Responsible Officer of the Active Seller
stating that no Receivables transferred on such date consist of
Standard Receivables or Fixed Value Receivables originated in the
State of Pennsylvania, unless the Agent shall have received a
favorable Opinion of Counsel, in form and substance satisfactory to
the Agent with respect to the application of the Pennsylvania Motor
Vehicle Sale Finance Act to such Receivables and such other related
matters as may be appropriate in connection therewith;
(h) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has caused the Servicer to mark the
electronic ledger in accordance with Section 2.5(e);
(i) From each of the Active Seller and the Servicer an Officer's
Certificate that the following statements with respect to such Person
are true and correct:
(i) The representations and warranties made by such Person
in this Long Term Retail PSA and any other agreements delivered
by such Person in connection herewith are true and correct on and
as of such Transfer Date as though made on and as of such date,
and
(ii) The information set forth in each document delivered by
or on behalf of such Person describing the Receivables Group
transferred on such date, including, without limitation, the
information set forth on the Schedule of Anticipated Collections
with respect to such Receivables Group, is true and correct,
which Schedule shall be attached to such certificate;
(j) A certificate of a Responsible Officer of the Active Seller
stating that the Active Seller has deposited into the Reserve Account,
in immediately available funds, the difference, if any, between the
Minimum Reserve Account Balance (after giving effect to the
Receivables transferred on such date) and the Specified Reserve
Account Balance;
(k) Payment of any fees required to be paid to the Agent, the
Administrative Agent or the Purchasers on such Transfer Date;
(l) A certificate of a Responsible Officer of the Active Seller
stating that (i) the Long Term RPA is in full force and effect and all
conditions precedent set forth therein with respect to such Purchase
have been satisfied (other than any condition requiring that the
conditions precedent set forth in this Long Term Retail PSA be
satisfied) and (ii) the Purchase Agreement is in full force and effect
and all conditions precedent set forth therein with respect to such
Purchase have been satisfied (other than any condition requiring that
the conditions precedent set forth in this Long Term Retail PSA be
satisfied);
(m) If the APR Increment of the Receivables Group transferred on
such Transfer Date is greater than zero, a certificate of a
Responsible Officer of the Active Seller stating that the Active
Seller has deposited the Yield Deposit with respect to such
Receivables Group in the Yield Account; and
(n) A copy of the Interest Rate Cap Agreement transferred as
part of the Pooled Property on such date, which Interest Rate Cap
Agreement (i) shall have an amortizing notional amount equal to the
product of (X) one minus the Subordinated Percentage times (Y) the
amortizing Principal Balance of the Receivables transferred on such
date, as set forth on the Schedule of Anticipated Collections
delivered on such date and (ii) shall have a cap strike price at or
below (A) if the Active Seller shall have made a Yield Deposit in the
Yield Account on such Transfer Date, the Adjusted Weighted Average APR
of the Receivables transferred on such Transfer Date or (B) otherwise,
the weighted average APR of the Receivables transferred on such
Transfer Date.
ARTICLE IV
Administration and Servicing of the Pooled Property
SECTION 4.1 Duties of Servicer; Delegations. (a) The Seller,
the Administrative Agent, the Agent and each Purchaser hereby revocably
appoints CCC as Servicer for the Receivables and the Related Property and
CCC hereby accepts such appointment. The Servicer, as agent for the
Administrative Agent, the Agent and the Certificateholders, shall manage,
service, administer and make collections on the Receivables (other than
Repurchased 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 Administrative Agent, the Agent and the
Certificateholders and making Advances pursuant to Section 5.4. Subject to
the provisions of Section 4.2, 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
Administrative Agent, the Agent and the Certificateholders 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
Certificateholders (in the case of a Receivable other than a Repurchased
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
Required Purchasers shall, on behalf of the Certificateholders and at the
Servicer's expense, take steps to enforce such Receivable, including
bringing suit in the name of the Servicer, the Seller, the Administrative
Agent, the Agent or the Certificateholders. Each of the Agent, the
Administrative Agent and the Certificateholders 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.
(b) In the event of any delegation of servicing authority or the
appointment of any subservicer by the Servicer, and notwithstanding the
provisions of any agreement permitting such subservicing or delegation, the
Servicer shall remain obligated and liable to the Administrative Agent, the
Agent and the Certificateholders for the servicing and administering of the
Receivables and the Related Property in accordance with the provisions of
this Long Term Retail PSA without diminution of such obligation or
liability by virtue of such subservicing or delegation agreements or
arrangements or by virtue of indemnification from a subservicer, to the
same extent and under the same terms and conditions as if the Servicer
alone were servicing and administering the Receivables and the Related
Property.
SECTION 4.2 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 Long Term Retail PSA, 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 Scheduled Maturity Date, it shall promptly
repurchase the Receivable from the Purchasers in accordance with the terms
of Section 4.7. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the original course of
servicing a Receivable. The Servicer shall not agree to any alteration of
the interest rate on any Receivable or of the amount of any Scheduled
Payment on Precomputed Receivables or the originally scheduled payments on
Simple Interest Receivables.
SECTION 4.3 Realization Upon Receivables. The Servicer, on
behalf of the Administrative Agent and the Certificateholders, shall use
its best efforts, consistent with its customary servicing procedures, to
repossess or otherwise acquire the ownership of the Financed Vehicle
securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. To realize upon such Receivables,
the Servicer shall use such procedures as it follows with respect to all
comparable automotive receivables that it services for itself or others,
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 4.4 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 4.5 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 Administrative Agent and the Purchasers in the
event of the relocation of a Financed Vehicle or for any other reason. If
there has been a Service Default (or the occurrence of an event of the type
described in Section 9.1(a)(vi) or (vii) with respect to the Active Seller
if CCC is the Servicer), upon the request of the Required Purchasers, each
of the Servicer and the Sellers, at their expense, shall promptly and duly
execute and deliver such documents and instruments, and take such other
actions as may be necessary, as evidenced by an Opinion of Counsel
delivered to the Administrative Agent (addressed to the Administrative
Agent, the Agent and each Purchaser), to perfect the Administrative Agent's
interest in the Receivables and the Related Property against all other
Persons, including, without limitation, the delivery of the Receivable
Files to the Administrative Agent, its agent or its designee, the
endorsement and delivery of the Insurance Policies or the notification of
the insurers thereunder, the execution of transfer instruments and the
endorsement to the Administrative Agent and the delivery of the
certificates of title to the Financed Vehicles to the appropriate motor
vehicle department (or other appropriate governmental agency).
SECTION 4.6 Covenants of Servicer. The Servicer shall not (a)
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, (b) impair
the rights of the Certificateholders in such Receivables, (c) increase the
number of scheduled payments due under a Standard Receivable or Fixed Value
Receivable and (d) change in any material respect its current credit and
collection policies (including, without limitation, its policy in respect
of the timing of charging off Receivables as uncollectible) so as to have a
material adverse effect on the Purchasers without the prior written consent
of the Required Purchasers.
SECTION 4.7 Purchase by Servicer Upon Breach. The Active Seller
or the Servicer shall inform each such other Person and each of the Agent
and the Administrative Agent promptly in writing upon the discovery of any
breach by the Servicer of its covenants under Sections 4.2, 4.5 or 4.6, and
the Administrative Agent shall give a copy of such writing to the
Purchasers. Unless the breach shall have been cured by the second
Determination Date immediately succeeding the date on which the Servicer
becomes aware of, or is informed in writing of, such breach, the Servicer
shall purchase any Receivable materially and adversely affected by any such
breach as of such Determination Date; provided that in the event of a
breach with respect to any Receivable of a covenant made by the Servicer
pursuant to Sections 4.6(a) or 4.6(c), the Servicer shall purchase such
Receivable on the next succeeding Determination Date, but only to the
extent that it has become aware of or been informed in writing of such
breach by such time. If the Servicer takes any action pursuant to Section
4.2 that impairs the rights of the Certificateholders in any Receivable or
as otherwise provided in Section 4.2, the Servicer shall purchase such
Receivable. In consideration of the purchase of any such Receivable
pursuant to either of the two preceding sentences, the Servicer shall remit
the Repurchase Amount in the manner specified in Section 5.5. For purposes
of this Section, the Repurchase 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. The sole remedy of the Agent, the Administrative Agent or the
Certificateholders against the Servicer with respect to a breach pursuant
to Sections 4.2, 4.5 or 4.6 shall be to require the Servicer to purchase
Receivables pursuant to this Section.
SECTION 4.8 Servicing Compensation; Servicer Expenses. (a) The
Servicer shall be entitled to a fee (the "Servicing Fee") with respect to
an Accrual Period which shall be an amount equal to the product of 1/12 of
1% and the Pool Balance on the first day of such Accrual Period. The
Servicing Fee shall be payable to the Servicer monthly in arrears on each
Distribution Date, but only to the extent that funds are available therefor
in accordance with Section 5.6. 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 Receivables, collected (from whatever source) on the
Receivables.
(b) The Servicer shall be required to pay all expenses incurred
by or on behalf of it in connection with its activities hereunder
(including (i) fees, disbursements and expenses of the Administrative Agent
and the Agent (including fees and disbursements of counsel to the
Administrative Agent and the Agent), any custodian appointed by the
Administrative Agent and independent accountants), (ii) taxes imposed on
the Servicer and (iii) expenses incurred in connection with distributions
and reports to the Agent, the Administrative Agent and the
Certificateholders) except expenses incurred in connection with realizing
upon Receivables under Section 4.3.
SECTION 4.9 Servicer's Certificate. On each Determination Date,
the Servicer shall deliver to the Administrative Agent (which shall forward
a copy thereof on the related Distribution Date to each Purchaser) an
Officer's Certificate, substantially in the form of Exhibit C hereto (a
"Servicer's Certificate"), containing all information necessary to make the
distributions and deposits pursuant to Sections 5.6 and 5.7 (including, if
required, withdrawals from or deposits to the Payahead Account and Advances
by the Servicer pursuant to Section 5.4) for the Collection Period
preceding the date of such Servicer's Certificate. 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 Schedules I or II). The Administrative Agent
agrees to furnish the Servicer with information available to the
Administrative Agent necessary to complete the Servicer's Certificate with
respect to the Purchasers and amounts on deposit in the Certificate
Account, the Reserve Account and the Yield Account. Delivery of the
Servicer's Certificate shall constitute a representation and warranty by
the Servicer that the information contained therein is accurate in all
material respects on and as of such Determination Date.
SECTION 4.10 Quarterly and Annual Statements as to Compliance;
Notice of Service Default.
(a) Within 60 days of the end of a calendar quarter ending on
March 31st, June 30th and September 30th of any year, so long as the Senior
Amount was greater than zero at any time during such calendar quarter, the
Servicer shall deliver to the Agent, the Administrative Agent and each
Purchaser of record on the Record Date preceding such required delivery
date an Officer's Certificate, dated as of the last day of such calendar
quarter, stating that (i) a review of the activities of the Servicer during
the preceding calendar quarter and of its performance of its obligations
under this Long Term Retail PSA has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, the Servicer
has fulfilled all its obligations under this Long Term Retail PSA
throughout such quarter, or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to such officer
and the nature and status thereof.
(b) On or before April 30th of each year, so long as the Senior
Amount was greater than zero at any time during such year, the Servicer
shall deliver to the Agent, the Administrative Agent and each Purchaser of
record on the Record Date preceding such required delivery date an
Officer's Certificate, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Servicer during the
preceding calendar year and of its performance of its obligations under
this Long Term Retail PSA has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Long Term Retail PSA
throughout such year), or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to such officer
and the nature and status thereof.
(c) Promptly upon having knowledge thereof, but in no event
later than five days thereafter, the Servicer shall deliver to the Agent
and the Administrative Agent, which shall promptly transmit a copy thereof
to each Purchaser of record on the preceding Record Date, written notice in
an Officer's Certificate of any event which constitutes or, with the giving
of notice or lapse of time, or both, would constitute or become, a Service
Default under Section 9.1.
SECTION 4.11 Independent Certified Public Accountant's Reports.
The Servicer shall cause a firm of independent certified public accountants
acceptable to the Agent (who may also render other services to CFC, CCC and
the Sellers) to deliver to the Agent and the Administrative Agent, which
shall promptly transmit a copy thereof to each Purchaser of record on the
preceding Record Date, on or before April 30 of each year, so long as the
Senior Amount was greater than zero at any time during such year, a report
addressed to the Board of Directors of the Servicer and to the Agent, the
Administrative Agent and each such Purchaser with respect to the previous
calendar year 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 Long
Term Retail PSA; and (c) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile and light truck
loans serviced for others that, in the firm's opinion, paragraph four of
such Program requires such firm to report.
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; Required Purchaser's Right to Request an Audit. (a)
The Servicer shall provide to the Certificateholders access to the
Receivable Files in such cases where the Certificateholders 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 respective
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.
(b) The Administrative Agent may, at any time during the
Servicer's normal business hours, and shall, at the written direction of
the Required Purchasers, be allowed to audit, or to cause a third party to
audit, the Receivable Files and any other documents or information related
to the Receivables within the Servicer's possession (including, without
limitation, access to any personnel of the Servicer who has responsibility
with respect to the Receivables), which audit shall be for the expense of
the Servicer.
SECTION 4.13 Annual Opinion of Counsel. The Servicer shall
deliver to the Agent and the Administrative Agent, which shall promptly
transmit a copy thereof to each Purchaser of record on the preceding Record
Date, by April 30 of each year, commencing with April 30, 1995, an Opinion
of Counsel, dated as of such date and addressed to the Agent and the
Administrative Agent and the Purchasers, stating that, in the opinion of
the counsel, either (i) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of such Persons in the Pooled Property
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (ii) no such action is
necessary to preserve and protect such interest.
ARTICLE V
Distributions
SECTION 5.1 Establishment of Bank Accounts. (a) On or prior to
the Effective Date the Administrative Agent shall establish with the Agent
an account into which the Servicer shall deposit collections on account of
the Receivables and the Related Property during each Collection Period (the
"Collection Account"). The Collection Account shall be established and
maintained as a segregated trust account in the corporate trust office of
the Agent in the name of the Administrative Agent on behalf of the
Purchasers. The Administrative Agent shall direct the Agent (or other
Person where the Collection Account is then maintained) to invest funds on
deposit in the Collection Account in Eligible Investments as from time to
time are specified by the Administrative Agent which, in any case, shall
mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Collection Account (including net
investment earnings on Eligible Investments) shall be a part of the Pooled
Property.
(b) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which (i) the Servicer shall
transfer collections on account of the Pooled Property on each Deposit
Date, (ii) the Seller and the Servicer shall transfer collections on
account of the Pooled Property and make deposits in respect of their
obligations hereunder and (iii) the Administrative Agent shall deposit
amounts withdrawn from the Reserve Account or the Yield Account pursuant
hereto (the "Certificate Account"). The Certificate Account shall be
established and maintained as a segregated trust account in the corporate
trust department of the Agent in the name of the Administrative Agent on
behalf of the Purchasers. Funds on deposit in the Certificate Account
shall be invested by the Administrative Agent in Eligible Investments which
mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Certificate Account (including net
investment earnings on Eligible Investments) shall be a part of the Pooled
Property.
(c) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which Reallocated Payments
and Reserve Account Deposits may be deposited (the "Reserve Account"). The
Reserve Account shall be established and maintained as a segregated trust
account in the corporate trust office of the Agent in the name of the
Administrative Agent on behalf of the Purchasers. Funds on deposit in the
Reserve Account shall be invested in Eligible Investments which mature not
later than the next succeeding Deposit Date. All monies deposited in or
credited to the Reserve Account (including net investment earnings on
Eligible Investments) shall be part of the Pooled Property.
(d) On or prior to the Effective Date the Administrative Agent
shall establish with the Agent an account into which a Seller will, if the
APR Increment is greater than zero with respect to any Transfer Date,
deposit a Yield Deposit on such Transfer Date, which deposit will be used
in calculating the Adjusted Weighted Average APR on such date (the "Yield
Account"). The Yield Account shall be established and maintained as a
segregated trust account in the corporate trust office of the Agent in the
name of the Administrative Agent on behalf of the Purchasers. Funds on
deposit in the Yield Account shall be invested in Eligible Investments
which mature not later than the next succeeding Deposit Date. All monies
deposited in or credited to the Yield Account (including net investment
earnings on Eligible Investments) shall be part of the Pooled Property.
(e) On or prior to the Effective Date, the Administrative Agent
shall establish with the Agent an account into which the Servicer shall,
in accordance with Section 5.3(a), deposit all Payaheads received in
respect of Precomputed Receivables (the "Payahead Account"; collectively
with the Collection Account, the Certificate Account, the Reserve Account
and the Yield Account, the "Trust Accounts"). The Payahead Account shall
be established and maintained as a segregated trust account in the
corporate trust office of the Agent in the name of the Administrative Agent
on behalf of the Purchasers. Funds on deposit in the Payahead Account
shall be invested in Eligible Investments which mature not later than the
next succeeding Deposit Date. All monies deposited in or credited to the
Payahead Account (including net investment earnings on Eligible
Investments) shall be part of the Pooled Property. If Chemical Bank ceases
to be the Agent, each of the Trust Accounts shall promptly be established
or maintained as a segregated trust account in the name of the
Administrative Agent on behalf of the Purchasers in the corporate trust
office of one or more Eligible Institutions.
SECTION 5.2 Collections. The Servicer shall as promptly as
practicable deposit into the Collection Account (but in no event later than
two Business Days following the receipt thereof) all payments by or on
behalf of the Obligors with respect to the Receivables (other than
Repurchased Receivables and not including Fixed Value Payments) and all
Liquidation Proceeds, both as collected during any Collection Period,
provided, that, with the prior written consent of the Required Purchasers,
so long as no Service Default is continuing and CCC remains the Servicer
hereunder, the Servicer need not make such daily deposits but may make a
single deposit into the Collection Account in same day funds not later than
12:00 noon, New York City time, on the Business Day immediately preceding
the Distribution Date in a net amount equal to the amount which would have
been on deposit with respect to the immediately preceding Collection Period
in the Collection Account. Prior to 3:00 P.M., New York City time, on each
Deposit Date, the Administrative Agent shall remit all such amounts to the
Certificate Account. 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, the Sellers or CFC.
SECTION 5.3 Application of Collections. (a) All collections
for the Collection Period shall be applied by the Servicer as follows (in
the following order of priority):
(i) Repayments of Advances. With respect to each Receivable
(other than a Repurchased Receivable), payments by or on behalf of the
Obligor shall be applied, in the case of Precomputed Receivables, to
reduce Outstanding Precomputed Advances as described in Section 5.4(a)
and, in the case of Simple Interest Receivables, to reduce Outstanding
Simple Interest Advances to the extent described in Section 5.4(b).
(ii) Payments in Respect of Receivables. 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.
(iii) Excess to Payahead Account. 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 5.4 Advances.
(a) Advances on Precomputed Receivables. 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
Precomputed Receivable which has become a Repurchased Receivable in such
Collection Period) shall be less than the Scheduled Payment with respect to
such Precomputed Receivable, the Servicer shall take the following actions
(in the following order of priority):
(i) the Payahead Balance shall be applied by the Servicer to the
extent of the shortfall and such Payahead Balance shall be reduced
accordingly;
(ii) the Servicer shall advance the amount equal to 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 any of the Obligor, the
Repurchase Amount, Liquidation Proceeds or proceeds of any other
Precomputed Receivables.
Any Precomputed Advance made by the Servicer shall increase Outstanding
Precomputed Advances, which Outstanding Precomputed Advances shall be
reduced by any subsequent payments by or on behalf of the Obligor,
collections of Liquidation Proceeds in respect of Precomputed Receivables
or payments of the Repurchase Amount. If the Servicer shall determine that
an Outstanding Precomputed Advance with respect to any Precomputed
Receivable shall not be recoverable in accordance with the preceding
sentence, the Servicer shall be reimbursed from any collections made on
other Precomputed Receivables which are included in the Pooled Property and
Outstanding Precomputed Advances with respect to such Precomputed
Receivables shall be reduced accordingly.
(b) Advances on Simple Interest Receivables. 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 APRs for the related Collection
Period (assuming the Simple Interest Receivables pay on their respective
due dates) minus the amount of interest actually received on the Simple
Interest Receivables during the related Collection Period (such amount, a
"Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an
amount equal to such negative number shall be paid to the Servicer and the
amount of Outstanding Simple Interest Advances shall be reduced by such
amount. In addition, in the event that a Simple Interest Receivable
becomes a Liquidated Receivable, Liquidation Proceeds with respect to a
Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest
Advances but only to the extent of any Outstanding Simple Interest
Advances. The Servicer shall not make any advance with respect to
principal of Simple Interest Receivables.
SECTION 5.5 Additional Deposits. (a) The Servicer shall
deposit in the Certificate Account the aggregate Advances pursuant to
Section 5.4. To the extent that the Servicer fails to make a Simple
Interest Advance pursuant to Section 5.4(b) on the date required, the
Servicer shall notify the Administrative Agent 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 Certificate Account. The Servicer and the Seller shall deposit or
cause to be deposited in the Certificate Account the aggregate Repurchase
Amount with respect to Repurchased Receivables. The Servicer shall deposit
therein all amounts to be paid under Section 10.2. The Seller shall
deposit therein any amounts paid to it under each Interest Rate Cap
Agreement. The Servicer shall direct the Administrative Agent to make any
Monthly Yield Account Withdrawal and deposit the amount so withdrawn in the
Certificate Account. All deposits pursuant to this Section 5.5(a) shall be
made on the Deposit Date.
(b) On each Distribution Date, the Trustee shall cause to be
transferred from the Payahead Account to the Certificate Account, in
immediately available funds, the aggregate previous Payaheads to be applied
to Scheduled Payments on Precomputed Receivables for the related Collection
Period or prepayments for the related Collection Period, pursuant to
Sections 5.3 and 5.4, in the amounts set forth in the Servicer's
Certificate for such Distribution Date. A single, net transfer may be
made.
SECTION 5.6 Distributions. On each Distribution Date, the
Administrative Agent shall make the following distributions of amounts on
deposit in the Certificate Account with respect to the related Collection
Period, as shown from the Servicer's Certificate delivered on the preceding
Determination Date, in the following order of priority (to the extent of
amounts available therefor):
(a) Shortfall Interest. To each Purchaser, in accordance with
its Purchase Percentage, as a payment of Certificate Interest due on
any prior Distribution Date which was not paid on such prior
Distribution Date as a result of insufficient amounts on deposit in
the Certificate Account from the sources described herein for the
payment therefor at such or any later Distribution Date ("Shortfall
Interest"), plus interest on such Shortfall Interest; any such
Shortfall Interest shall bear interest at the Default Rate and shall
be payable, to the extent of funds available therefor, from (i)
Interest Distribution Amounts for the Collection Period preceding such
Distribution Date, (ii) if necessary after application of amounts
pursuant to clause (i), the Applicable Subordinated Percentage of the
Principal Distribution Amount for such Collection Period, (iii) if
necessary after application of amounts pursuant to clause (ii),
amounts to be transferred from the Reserve Account to the Certificate
Account on such Distribution Date pursuant to Section 5.7(d) and (iv)
if necessary after application of amounts pursuant to clause (iii),
from the Applicable Senior Percentage of the Principal Distribution
Amount for such Collection Period (clauses (i), (ii), (iii) and (iv),
collectively, "Available Amounts"; provided that any determination and
application of Available Amounts shall be made in the order of the
priority established by the foregoing clauses (i), (ii), (iii) and
(iv)); and provided, further, that the calculation of Available
Amounts with respect to each distribution under this Section 5.6
(other than distributions under Sections 5.6(e) and (j)) shall not
include any amounts on account of Realized Losses.
(b) Shortfall Principal. To each Purchaser as payment of all or
that portion of the Applicable Senior Percentage of the Principal
Distribution Amounts due on any prior Distribution Date which was not
paid on such prior Distribution Date as a result of insufficient
amounts of principal collections on deposit in the Certificate Account
at such Distribution Date, payable, to the extent of funds available
therefor, from Available Amounts.
(c) Reimbursement of Advances. To the Servicer, the aggregate
amount of Advances, which, prior to such Distribution Date, have not
been reimbursed pursuant to this Section, payable, to the extent of
funds available therefor, from Available Amounts.
(d) Senior Certificate Interest. To each Purchaser, Certificate
Interest payable on such Purchaser's Purchase Percentage of the Senior
Amount at the Certificate Rate applicable to the Accrual Period to
which such Distribution Date relates, payable, to the extent of funds
available therefor, from Available Amounts.
(e) Senior Certificate Principal. To each Purchaser, in
reduction of the Senior Amount, Certificate Principal to such
Purchaser in an amount equal to the lesser of (a) the product of such
Purchaser's Purchase Percentage and the then outstanding Senior Amount
and (b) the product of (i) such Purchaser's Purchase Percentage and
(ii) the Applicable Senior Percentage of the Principal Distribution
Amount for the Accrual Period preceding such Distribution Date,
payable, to the extent of funds available therefor, from Available
Amounts.
(f) Servicing Fee. To the Servicer as payment of the Servicing
Fee for the Accrual Period to which such Distribution Date relates,
payable, to the extent of funds available therefor, from Available
Amounts.
(g) Reserve Account Deposit. To the Reserve Account to the
extent necessary to cause the Specified Reserve Account Balance to
equal the Minimum Reserve Account Balance, payable, to the extent of
funds available therefor, from Available Amounts.
(h) Increased Costs. To any Senior Certificateholder (or the
Administrative Agent or the Agent pursuant to Section 11.3) which has
submitted a demand for Increased Costs during any preceding Collection
Period pursuant to Section 11.3, payment of (i) interest, payable at a
rate per annum equal to the Default Rate, on Increased Costs due on
any prior Distribution Date which were not paid on such prior
Distribution Date as a result of insufficient amounts being available
for the payment therefor at such Distribution Date and (ii) the amount
of such Increased Costs as so demanded, payable, in each case, from
Available Amounts of the type described in clauses (i) and (ii) of the
definition of such term.
(i) Subordinated Certificate Interest. To the holder of the
Subordinated Certificate as Certificate Interest payable on the
Subordinated Certificate at the Certificate Rate for the related
Accrual Period, from the remaining Interest Distribution Amounts.
(j) Subordinated Certificate Principal. To the Seller as
Certificate Principal payable on and as a reduction of the
Subordinated Certificate for the preceding Accrual Period, payable, to
the extent of funds available therefor, from the Applicable
Subordinated Percentage of the Principal Distribution Amount for the
related Collection Period.
(k) Remaining Amounts to Seller. To the Seller, all remaining
Interest Distribution Amounts and any other amounts remaining in the
Certificate Account.
Distributions to any Purchaser pursuant to any of the foregoing
paragraphs shall be made to such Purchaser pursuant to Section 2.7 of the
Long Term RPA. The Servicer shall, in its sole discretion, allocate among
the Sellers any amounts due and payable to the Sellers hereunder and
neither the Agent nor the Administrative Agent shall have any obligation to
make such allocation. Any distributions to the Servicer or the Sellers
shall be made on a net basis to such Persons, to the extent that the
Servicer or such Seller shall have failed to make a deposit or payment
required hereunder.
SECTION 5.7 Subordination; Reserve Account.
(a) The rights of each of the Sellers to receive distributions
in respect of the Subordinated Certificate and any payments in respect of
any Seller Subordinated Note shall be and hereby are subordinated, and made
junior, to the rights of the Purchasers to receive distributions in respect
of the Senior Certificates. Such subordination shall be effected pursuant
to the priority of payments set forth in Section 5.6.
(b) In order to effect the subordination provided for herein and
to provide for the prompt payment to the Purchasers pursuant to Section
5.6, the Seller as holder of the Subordinated Certificate, on behalf of
itself and its successors and assigns, sells, conveys and transfers to the
Administrative Agent for the benefit of the Purchasers all of the Seller's
right, title and interest in and to the Reserve Account, all amounts on
deposit therein from time to time and all proceeds thereof. Neither the
Seller nor the Servicer shall have any right to withdraw amounts from the
Reserve Account.
(c) If at any time the Specified Reserve Account Balance is less
than the Minimum Reserve Account Balance, then on the first succeeding
Distribution Date thereafter, and on each succeeding Distribution Date
thereafter so long as the Specified Reserve Account Balance is less than
the Minimum Reserve Account Balance, any distributions that would be made
if the Servicer is CCC, to the Servicer pursuant to Section 5.6(c) (such
amounts, "Reallocated Payments") (or such lesser amounts as may be
necessary to cause the Specified Reserve Account Balance to at least equal
the Minimum Reserve Account Balance) shall be deposited by the
Administrative Agent into the Reserve Account, and held as set forth in
Section 5.1 and this Section 5.7.
(d) If on any Determination Date the distributions to be made
from Available Amounts exceed such Available Amounts of the type described
in clauses (i) and (ii) of the definition of such term, as shown from the
Servicer's Certificate for such Determination Date, the Administrative
Agent on the following Distribution Date shall withdraw from the Reserve
Account an amount equal to such excess, if then on deposit in the Reserve
Account (or, if a lesser amount is on deposit, such lesser amount), and
deposit such amount in the Certificate Account.
(e) If the Servicer pursuant to Section 5.4 determines on any
Determination Date that it is required to make an Advance and does not do
so from its own funds, the Servicer shall instruct the Administrative Agent
to withdraw funds from the Reserve Account and deposit them in the
Certificate Account to cover any shortfall. Such payment shall be deemed
to have been made by the Servicer pursuant to Section 5.4 for purposes of
making distributions pursuant to this Long Term Retail PSA, 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.
(f) If on any Deposit Date (after giving effect to distributions
to be made to the Purchasers on the next succeeding Distribution Date), the
sum of the amounts on deposit in the Reserve Account and the Yield Account
equals or exceeds the Senior Amount (plus any other amounts due and payable
to the Purchasers under this Long Term Retail PSA) on such date, the
Administrative Agent shall withdraw such amounts from the Reserve Account
and the Yield Account and deposit such withdrawal in the Certificate
Account to pay to each of the Purchasers, on the related Distribution Date,
an amount equal to such Purchaser's Purchase Percentage of the then
outstanding Senior Amount (plus any such other amounts owing to such
Purchaser hereunder).
(g) If on any date the Senior Amount has been reduced to zero,
any amounts then on deposit in the Reserve Account and the Yield Account,
after giving effect to the distributions made on the Scheduled Maturity
Date, shall be distributed to the Active Seller, on the Business Day
following the Scheduled Maturity Date.
SECTION 5.8 Interest Rate Cap Agreements. If, on any
Distribution Date, the aggregate notional amount under an Interest Rate Cap
Agreement shall exceed the then outstanding aggregate Principal Balance of
the related Receivables Group by an amount which shall be specified in such
Interest Rate Cap Agreement, then the Administrative Agent shall give
notice to each Cap Provider thereunder to reassign such excess of the
aggregate notional amount under such Interest Rate Cap Agreement to the
related Seller on such Distribution Date.
ARTICLE VI
The Certificates; Transfers of Purchase Commitments
SECTION 6.1 The Certificates. The Senior Certificates and the
Subordinated Certificate shall be substantially in the forms of Exhibits A
and B, respectively, with, in the case of each Senior Certificate,
appropriate insertions as to the Purchaser and its Purchase Commitment and
Purchase Percentage. Each Purchaser is hereby authorized to record (a)
with respect to each Purchase, the Transfer Date and its pro rata share of
the Purchase Price and (b) the date and amount of each payment or
prepayment of principal hereunder on the schedule annexed to and
constituting a part of its Senior Certificate and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, provided that the failure so to record the amount of any such pro
rata portion of a Purchase Price or any error in so recording such amount
shall not limit or otherwise affect the obligations of the Sellers
hereunder.
SECTION 6.2 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate shall be surrendered to the Active Seller
or (b) the Active Seller shall receive evidence satisfactory in its
reasonable discretion of the destruction, loss, or theft of any Certificate
and a certificate of an authorized officer of the Holder named in the
Register certifying as to such destruction, loss or theft, the Active
Seller shall execute and deliver to the Holder named in such Certificate
or, in the case of a Senior Certificate, to the Administrative Agent for
delivery to such Holder, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like stated
amount (as indicated from the Register). Any tax or other governmental
charge which may be imposed in connection with the issuance of any new
Certificate under this Section 6.2 shall be for the account of the
Servicer. Any replacement Certificate issued pursuant to this Section 6.2
shall constitute conclusive evidence of the undivided participating
ownership of the Pooled Property, as if originally issued, whether or not
the lost, stolen, or destroyed Certificate shall be found at any time.
SECTION 6.3 Transfer and Exchange of Certificates. (a) The
Administrative Agent shall maintain, or cause to be maintained a register
(the "Register") in which, subject to such reasonable regulations as it may
prescribe, the Administrative Agent shall provide for the recordation of
the names and addresses of, and the Purchase Commitment and Purchase
Percentage of, the Purchasers. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Seller, the Servicer,
CFC, the Agent, the Administrative Agent and each Purchaser may treat each
Person whose name is recorded in the Register as the Holder of the
Certificate recorded therein for all purposes of this Long Term Retail PSA.
The Administrative Agent shall also maintain at such address copies of each
Assignment and Acceptance delivered to it.
(b) Except as otherwise provided in Section 7.1, the
Subordinated Certificate shall be held by the Active Seller, on behalf of
itself and all the other Sellers, and shall not be transferable.
(c) Any Purchaser may sell participations in, or sell all or a
portion of, the rights and obligations of such Purchaser hereunder and
under its Senior Certificate in accordance with the terms of Section 9.6 of
the Long Term RPA.
SECTION 6.4 Persons Deemed Owners. Each of the Agent and the
Administrative Agent may treat the Person in whose name any Certificate
shall be recorded in the Register as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 5.6 and for all
other purposes, and neither the Agent nor the Administrative Agent shall be
bound by any notice to the contrary. The Administrative Agent shall
furnish or cause to be furnished to the Servicer, within fifteen days after
receipt by the Administrative Agent of a request therefor from the
Servicer, in such form as the Servicer may reasonably require, a list of
the names and addresses of the Senior Certificateholders as of the most
recent Record Date.
ARTICLE VII
The Seller
SECTION 7.1 Representations, Warranties and Covenants of the
Sellers. (a) On each Transfer Date, the Active Seller makes the following
representations and warranties in respect of the Purchase made and the
Receivables Group transferred on such Transfer Date, on which the
Administrative Agent, the Agent and each Purchaser relies in executing and
delivering this Long Term Retail PSA and in accepting the Receivables and
the other Pooled Property on such date.
(i) Purchase Agreement Representations and Warranties. The
representations and warranties of such Seller set forth in the
Purchase Agreement are true and correct in all material respects on
and as of such Transfer Date and the Agent, the Administrative Agent
and each Purchaser may rely on such representations and warranties as
if made directly to such Person pursuant to this Long Term Retail PSA.
(ii) Disclosure. No representation or warranty made by such
Seller in this Long Term Retail PSA or in any report, certificate or
any other document furnished in connection herewith contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
(iii) Chief Executive Office; Location of Contract Files. The
chief executive office of such Seller is 27777 Franklin Road,
Southfield, Michigan 48034. The office where all books, records and
documents evidencing the Pooled Property are kept is listed on
Schedule III or such other address as may be specified pursuant to
Section 2.8(b).
(b) Each Seller hereby covenants and agrees that, until the
Scheduled Maturity Date:
(i) No Liens or Transfers. Except for any Purchase, such
Seller shall not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on any of
the Pooled Property whether now existing or hereafter created, or any
interest therein, or on any of the Senior Certificates, and such
Seller shall defend the right, title and interest of the Purchasers
in, to and under the Pooled Property, whether now existing or
hereafter created, against all claims of third parties claiming
through or under such Seller. Such Seller shall not sell to any other
Person the Subordinated Certificate or the Seller's rights to receive
distributions on account thereof, provided that the Seller may pledge
or assign the Subordinated Certificate to any Person.
(ii) Delivery of Collections and Interest Rate Cap Agreement
Payments. In the event that such Seller receives any collections on
account of any of the Pooled Property or any payments under any
Interest Rate Cap Agreement, such Seller agrees to promptly (but in no
event more than two Business Days following receipt or, with respect
to payments under any Interest Rate Cap Agreement, by the
Determination Date following such date of receipt, if earlier) deliver
the same for deposit into the Certificate Account in like form as
received (duly indorsed to the Administrative Agent, if required) and,
until such delivery, hold such property in trust for the
Administrative Agent and the Purchasers.
(iii) Notice of Liens. Such Seller shall notify the
Administrative Agent and the Agent promptly after becoming aware of
any Lien on any Pooled Property other than in connection with any
Purchase.
(iv) Compliance with Law. Such Seller shall comply in all
material respects with all Requirements of Law applicable to the
Seller, its certificate or articles of incorporation and its by-laws.
(v) Activities of the Seller. Such Seller shall not engage in
any business or activity of any kind or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking other than the transactions contemplated and authorized by
this Long Term Retail PSA, the Certificates and the Purchase
Agreement.
(vi) Indebtedness. Such Seller shall not create, incur or assume
any indebtedness or other liability whatsoever or issue any securities
or sell or transfer any property to a trust or other Person which
issues securities or other evidences of ownership in respect thereof,
except for the delivery by such Seller of its Seller Subordinated Note
to CFC, if applicable.
(vii) Guarantees. Such Seller shall not become or remain liable,
directly or contingently, in connection with any indebtedness or other
liability of any other Person, whether by guarantee, endorsement
(other than endorsements of negotiable instruments for deposit or
collection in the ordinary course of business), purchase or agreement
to purchase, agreement to supply or advance funds, or otherwise.
(viii) Investments. Such Seller will not make or suffer to exist
any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of indebtedness,
acquisition of the business or assets, or otherwise) in, any
Affiliate; provided, however, that the Seller shall not be prohibited
under this paragraph (viii) from declaring or paying any dividends in
respect to its common stock in accordance with paragraph (xi) below.
(ix) Merger; Sales. Such Seller will not sell any shares of any
class of its capital stock to any Person, or enter into any
transaction of merger or consolidation, or terminate, liquidate or
dissolve itself (or suffer any termination, liquidation or
dissolution), or acquire or be acquired by any Person, or otherwise
make (or suffer) any material change in the organization of or method
of conducting its business, or, except as expressly contemplated
hereby, convey, sell, lease or otherwise dispose of any of its
property or business.
(x) Agreements; Governance Documents. Such Seller will not
become a party to, or permit any of its properties to be bound by, any
indenture, mortgage, instrument, contract, agreement, lease or other
undertaking, other than this Long Term Retail PSA, the Long Term RPA,
the Certificates, the Purchase Agreement, the CFC Revolving Credit
Agreement, the Short Term Retail PSA, the Short Term RPA and any
document or agreement executed and delivered in connection therewith.
Such Seller will not amend or modify its certificate or articles of
incorporation or its by-laws or cancel, terminate, amend, supplement,
modify or waive any provision of the Purchase Agreement or any
Interest Rate Cap Agreement or request, consent or agree to or suffer
to exist or permit any such cancellation, termination, amendment,
supplement, modification or waiver (each, a "modification") without
the prior written consent of the Agent, the Administrative Agent and
the Required Purchasers; provided, that such Seller may make any such
modification which is solely ministerial and does not adversely affect
the interests of the Purchasers hereunder.
(xi) Dividends. Such Seller shall not declare or pay any
dividend on, or make any other payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares
of its capital stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or
indirectly, whether in cash, property or obligations of such Seller,
except for dividends to CFC the amount of which so declared and paid
does not exceed the amount theretofore actually received by such
Seller as Certificate Interest or Certificate Principal on the
Subordinated Certificate.
(xii) No Sale of Fixed Value Payments. Such Seller shall not
sell, assign or otherwise transfer to any Person any Fixed Value
Payment in respect of the Fixed Value Receivables.
Notwithstanding anything contained herein to the contrary, any Seller may
pledge or assign its interest in the Subordinated Certificate to any
Person.
SECTION 7.2 Liability of Seller; Indemnities.
(a) Each Seller shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by such Seller under
this Long Term Retail PSA and shall have no other obligations or
liabilities hereunder.
(b) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
taxes that may at any time be asserted against such Person with respect to,
and as of the date of, each transfer of the Pooled Property to the
Purchasers or the issuance of the Senior Certificates on the related
Transfer Date, or with respect to the ownership of the Pooled Property
including any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege, or license taxes (but not
including any taxes asserted with respect to ownership of the Senior
Certificates or federal or other income taxes, including franchise taxes
measured by net income, arising out of the transactions contemplated by
this Long Term Retail PSA or transfer taxes arising in connection with the
transfer of the Certificates), and reasonable costs and expenses in
defending against the same.
(c) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
loss, liability or expense incurred by reason of (i) such Seller's willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder or by reason of reckless disregard of the obligations and duties
hereunder, (ii) any action taken, or failed to be taken, by such Seller in
respect of any portion of the Pooled Property or (iii) any breach of the
representation and warranty set forth in Section 2.4(c).
(d) Each Seller shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Purchaser from and against any
loss, liability or expense incurred by reason of the violation by such
Seller of federal or state securities laws in connection with the issuance
and sale of the Certificates.
(e) Indemnification under this Section 7.2 shall include
reasonable fees and expenses of counsel and expenses of litigation and
shall survive termination of this Long Term Retail PSA. If any Seller
shall have made any indemnity payments to any Person indemnified under this
Section 7.2 and such Person thereafter shall collect any of such amounts
from Persons other than such Seller, such Person shall immediately upon
receipt thereof repay such amounts to such Seller, without interest.
(f) Notwithstanding anything herein to the contrary, amounts
required to be paid by any Seller as indemnification under this Section 7.2
shall be limited to amounts received by such Seller on account of the
Subordinated Certificate.
SECTION 7.3 Limitation on Liability of Seller and Others. Each
Seller and any of its directors, officers, employees or agents may rely in
good faith on any document of any kind, believed by any of them to be
genuine and properly executed and submitted by any Person respecting any
matters arising hereunder. No Seller shall be under any obligation under
this Long Term Retail PSA to appear in, prosecute or defend any legal
action that shall be unrelated to its respective obligations under this
Long Term Retail PSA and that in its respective opinions may involve it in
any expense or liability.
ARTICLE VIII
The Servicer; CCC
SECTION 8.1 Representations and Warranties of Servicer. On each
Transfer Date the Servicer makes the following representations and
warranties in respect of the Purchase made and the Receivables Group
transferred on such Transfer Date, on which the Administrative Agent, the
Agent and each Purchaser relies in executing and delivering this Long Term
Retail PSA and in accepting the Receivables and the other Pooled Property
on such date.
(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 power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire, own, sell and service the
Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign 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 power and
authority to execute and deliver this Long Term Retail PSA and to
carry out its terms; and the execution, delivery and performance of
this Long Term Retail PSA have been duly authorized by the Servicer by
all necessary corporate action.
(d) Binding Obligation. This Long Term Retail PSA 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 Long Term Retail PSA and the fulfillment of the
terms hereof shall not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the certificate or articles of
incorporation or by-laws of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it
shall be 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 this Long Term
Retail PSA); nor 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 by any Person
other than a Purchaser, 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 Long Term Retail PSA or the other Related
Documents, (ii) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Long
Term Retail PSA or the other Related Documents or (iii) seeking any
determination or ruling that might have a material adverse effect on
the performance by the Servicer of its obligations under, or the
validity or enforceability of, this Long Term Retail PSA or the other
Related Documents.
(g) Disclosure. No representation or warranty made by the
Servicer in this Long Term Retail PSA or in any report, certificate or
any other document furnished in connection herewith contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
SECTION 8.2 Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer under
this Long Term Retail PSA and the Servicer shall not have any other
obligations or liabilities hereunder.
(b) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder 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 or in respect of
any action taken, or failed to be taken, by the Servicer in respect of any
portion of the Pooled Property.
(c) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder from and against
any taxes that may at any time be asserted against the Agent, the
Administrative Agent or such Certificateholder with respect to the
transactions contemplated hereby, including any sales, gross receipts,
general corporation, tangible or intangible personal property, privilege,
or license taxes (but not including any taxes asserted with respect to the
ownership of the Senior Certificates, federal or other income taxes,
including franchise taxes, measured by net income, arising out of
transactions contemplated by this Long Term Retail PSA or transfer taxes
arising in connection with transfers of the Certificates) and reasonable
costs and expenses in defending against the same.
(d) The Servicer shall indemnify, defend and hold harmless the
Agent, the Administrative Agent and each Certificateholder 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, or incurred by such Person as a result of the
willful misfeasance, negligence, or bad faith of the Servicer in the
performance of its duties under this Long Term Retail PSA.
(e) The Servicer shall indemnify, defend and hold harmless the
Administrative Agent and the Agent from and against all costs, expenses,
losses, claims, damages, and liabilities arising out of or incurred in
connection with the performance by such Person of its duties herein
contained, except to the extent that such costs, expenses, losses, claims,
damages or liabilities for which such Person is seeking indemnity pursuant
hereto are due to its willful misfeasance, gross negligence or bad faith.
(f) Indemnification under this Section shall include reasonable
fees and expenses of counsel and expenses of litigation. The indemnity
obligations of the Servicer hereunder shall survive any termination of the
Servicer pursuant to Section 9.1, but only with respect to obligations
arising prior thereto, and any payment of the amount owing under, or the
Repurchase Amount with respect to, any Contract. If the Servicer shall
have made any indemnity payments to any Person indemnified under this
Section 8.2 and such Person thereafter collects any of such amounts from
others, such Person shall immediately upon receipt thereof repay such
amounts to the Servicer, without interest.
SECTION 8.3 Limitation on Liability of Servicer and Others.
(a) Except as provided in this Long Term Retail PSA, the
Servicer shall be under no 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 Long Term Retail PSA and that in its
opinion may involve it in any expense or liability; provided, however, that
the Servicer may undertake, at its expense, any reasonable action that it
may deem necessary or desirable in respect of this Long Term Retail PSA and
the rights and duties of the parties to this Long Term Retail PSA and the
interests of the Certificateholders under this Long Term Retail PSA.
(b) The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind,
believed by it to be genuine and properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall be
under no obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Long Term Retail PSA
and that in its opinion may involve it in any expense or liability.
SECTION 8.4 Resignations. The Servicer shall not resign from
its obligation and duties under this Long Term Retail PSA except upon a
determination that the performance of its duties is no longer permissible
under applicable law. Any such determination permitting the resignation of
the Servicer shall be evidenced by an Opinion of Counsel to such effect
addressed to the Administrative Agent, the Agent and each Purchaser and
delivered to the Administrative Agent. No such resignation shall become
effective until a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
9.2.
ARTICLE IX
Service Defaults
SECTION 9.1 Service Defaults.
(a) If any one of the following events ("Service Defaults")
shall occur and be continuing:
(i) Any failure by the Servicer (or, for so long as CCC is the
Servicer, the Active Seller) to make or to cause to be made any
required payment or deposit, which shall continue unremedied for a
period of two Business Days following the due date therefor;
(ii) Any failure by the Servicer to deliver to the Administrative
Agent the Servicer's Certificate for any Collection Period required
hereunder within five Business Days from the date on which such
Servicer's Certificate shall be due to be delivered;
(iii) Except for the transfer of the Transferred Property by the
Servicer to CFC, the Servicer shall have assigned, transferred,
pledged or otherwise conveyed such Transferred Property (or any
portion thereof) to any other Person;
(iv) Failure on the part of the Servicer (or, for so long as CCC
is the Servicer, the Active Seller) to duly observe or to perform in
any material respect any other covenants or agreements set forth in
the Certificates or in this Long Term Retail PSA, which failure
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer (or, for so long as the CCC is
the Servicer, the Active Seller) by the Agent, the Administrative
Agent and the Required Purchasers;
(v) If, at any date, there shall exist a material
misrepresentation with respect to any representation or warranty made
by the Servicer hereunder or in the Purchase Agreement (other than a
material misrepresentation in respect of a Repurchased Receivable),
which continues unremedied for a period of 30 days after the date on
which written notice of such misrepresentation, requiring the same to
be remedied, shall have been given to the Servicer (or, for so long as
CCC is the Servicer, the Seller) by the Agent, the Administrative
Agent or the Required Purchasers;
(vi) The entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of
a conservator, receiver, liquidator or trustee for any of the
Servicer, CFC or Chrysler Corporation in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings, or for the winding up or liquidation of its
affairs, and any such decree or order continues unstayed and in effect
for a period of 60 consecutive days;
(vii) The consent by any of the Servicer, CFC or Chrysler
Corporation to the appointment of a conservator, receiver, liquidator
or trustee in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of or
relating to such Person or relating to substantially all of its
property, the admission in writing by such Person of its inability to
pay its debts generally as they become due, the filing by such Person
of a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, the making by such Person of an
assignment for the benefit of its creditors or the voluntary
suspension by such Person of payment of its obligations;
then, and in each and every case and so long as a Service Default shall not
have been remedied, the Administrative Agent, the Agent and the Required
Purchasers by notice then given in writing to the Servicer, may terminate
all of the rights and obligations of the Servicer under this Long Term
Retail PSA. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Long Term Retail
PSA, whether with respect to the Certificates or the Pooled Property or
otherwise, shall pass to and be vested in the Administrative Agent pursuant
to this Section 9.1; and thereupon the Administrative Agent shall be
authorized and empowered to execute and deliver, on behalf of the 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 Receivable Files or the
Insurance Policies, the certificates of title to the Financed Vehicles, or
otherwise. The Servicer shall cooperate with the Administrative Agent or
such successor Servicer in effecting the termination of its
responsibilities and rights as Servicer under this Long Term Retail PSA,
including the transfer to the Administrative Agent or such successor
Servicer for administration of all cash amounts that are at the time held
by the Servicer for deposit, shall have been deposited by the Servicer in
the Certificate Account, or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Administrative Agent or such successor Servicer may require. In addition,
the Servicer shall transfer or cause to be transferred all electronic
records relating to the Receivables to the successor Servicer in such
electronic form as the successor Servicer may reasonably request, and shall
make available or cause to be made available to the successor Servicer such
personnel having knowledge of such electronic records for such period of
time as the successor Servicer shall reasonably require.
(b) If any of the foregoing Service Defaults occur, neither the
Agent nor the Administrative Agent shall have any obligation to notify
Certificateholders or any other Person of such occurrence prior to the
continuance of such event through the end of any cure period specified in
Section 9.1(a).
SECTION 9.2 Administrative Agent to Act; Appointment of
Successor Servicer. Upon the Servicer's resignation pursuant to Section
8.4 or upon the Servicer's receipt of notice of termination as Servicer
pursuant to Section 9.1, the Administrative Agent shall be the successor in
all respects to the Servicer in its capacity as Servicer under this Long
Term Retail PSA, and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions of this Long Term Retail PSA; provided, that, if the
Administrative Agent shall be acting as such successor Servicer, it shall
not be responsible for the payment of any reasonable amounts required to be
paid with respect to the expenses of the Servicer pursuant to the last
sentence of Section 4.8(b) (to the extent that such successor Servicer
would not otherwise be reimbursed for such amounts) which payments, in each
case, shall instead be paid monthly in arrears from Available Amounts
subsequent to distributions under Section 5.6(e) but prior to distributions
under Section 5.6(f). As compensation therefor, the Administrative Agent
shall be entitled to such compensation (whether payable out of the
Certificate Account or otherwise) as the Servicer would have been entitled
to under this Long Term Retail PSA if no such notice of termination or
resignation had been given. Notwithstanding the above, the Administrative
Agent may, if it shall be unwilling or legally unable so to act, appoint,
or petition a court of competent jurisdiction to appoint, an Eligible
Servicer as the successor to the terminated Servicer under this Long Term
Retail PSA. The Administrative Agent and such successor shall take such
action, consistent with this Long Term Retail PSA, as shall be necessary to
effectuate any such succession. No Servicer shall resign or be relieved of
its duties under this Long Term Retail PSA until a newly appointed Servicer
shall have assumed the responsibilities and obligations of the terminated
Servicer under this Long Term Retail PSA. Neither the Administrative Agent
nor any successor Servicer shall have any liability for any failure to
perform servicing obligations hereunder due to the timeliness, accuracy or
completeness of information supplied by any predecessor Servicer.
SECTION 9.3 Effect of Servicing Transfer.
(a) After the transfer of servicing hereunder, the
Administrative Agent or successor Servicer shall notify Obligors to make
directly to the successor Servicer payments that are due under the
Receivables after the effective date of such transfer.
(b) After the transfer of servicing hereunder, the outgoing
Servicer shall have no further obligations with respect to the management,
administration, servicing, custody or collection of the Receivables and the
successor Servicer shall have all of such obligations, except that the
outgoing Servicer shall transmit or cause to be transmitted directly to the
successor Servicer for its own account, promptly on receipt and in the same
form in which received, any amounts held by the outgoing Servicer (properly
endorsed where required for the successor Servicer to collect any such
items) received as payments upon or otherwise in connection with the
Receivables and the outgoing Servicer shall continue to cooperate with the
successor Servicer by providing information and in the enforcement of the
Receivables and the Insurance Policies.
(c) A transfer of servicing hereunder shall not affect the
rights and duties of the parties hereunder (including the obligations and
indemnities of any Seller pursuant to Sections 2.6, 7.1 and 7.2 or, with
respect to obligations and indemnities arising prior to, or concurrently
with, a transfer of servicing hereunder, the outgoing Servicer pursuant to
Sections 4.7, 8.1 or 8.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other Pooled Property. The successor Servicer shall, upon its appointment
pursuant to Section 9.2 and as part of its duties and responsibilities
under this Long Term Retail PSA, promptly take all action it deems
necessary or appropriate so that the outgoing Servicer (in whatever
capacity) is paid or reimbursed all amounts it is entitled to receive under
this Long Term Retail PSA on each Distribution Date subsequent to the date
on which it is terminated as Servicer hereunder.
SECTION 9.4 Notification to Certificateholders. Upon any notice
of a Service Default or upon any termination of, or appointment of a
successor to, the Servicer pursuant to this Article IX, the Administrative
Agent shall give prompt written notice thereof to the Agent and to the
Purchasers of record at the preceding Record Date at their respective
addresses of record.
ARTICLE X
Termination
SECTION 10.1 Termination of this Long Term Retail PSA. (a) The
respective obligations and responsibilities of the Sellers, the Servicer,
the Agent and the Administrative Agent hereunder shall terminate (except as
otherwise expressly provided herein) upon the earliest of: (i) the
Distribution Date immediately succeeding the repurchase by the Sellers of
the Pooled Property pursuant to Section 10.2, (ii) the payment to the
Purchasers of the Senior Amount, interest thereon and any fees required to
be paid to them pursuant to this Long Term Retail PSA or (iii) the
Distribution Date next succeeding the month which is six months after the
maturity or the liquidation of the last Receivable held as part of the
Pooled Property and the disposition of any amounts received upon
liquidation of any property remaining as part of the Pooled Property. The
Servicer shall promptly notify the Administrative Agent and the Agent of
any prospective termination pursuant to this Section 10.1 prior to the
Scheduled Maturity Date and the Administrative Agent, promptly upon its
receipt of such notice, shall notify each Purchaser.
(b) Notice of any termination, specifying the Distribution Date
upon which the Purchasers may surrender the Senior Certificates to the
Administrative Agent for payment of the final distribution and
cancellation, shall be given promptly by letter from the Administrative
Agent to the Agent, the Purchasers and the Sellers mailed not earlier than
the 15th day and not later than the 25th day of the month immediately
preceding the specified Distribution Date, stating the aggregate amount of
any such final payment, that the Record Date otherwise applicable to such
Distribution Date is not applicable, that instead payments will be made
only upon presentation and surrender of the Senior Certificates at the
office of the Administrative Agent therein specified. Upon presentation
and surrender of the Senior Certificates, the Administrative Agent shall
cause to be distributed to Purchasers amounts distributable on such
Distribution Date pursuant to Sections 5.6 and 5.7 and, after payment of
Certificate Principal and Certificate Interest on the Senior Certificates,
any Increased Costs claimed by any Purchaser.
(c) In the event that all of the Purchasers shall not surrender
their Senior Certificates for cancellation within six months after the date
specified in the written notice delivered in accordance with Section
10.1(b), the Administrative Agent shall give a second written notice to the
remaining Purchasers to surrender their Senior Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after the second notice all the Senior Certificates shall
not have been surrendered for cancellation, the Servicer may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Purchasers concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Long Term Retail PSA. Any funds
remaining as part of the Pooled Property (whether in the Trust Accounts or
otherwise) after exhaustion of such remedies shall be distributed by the
Administrative Agent to the Active Seller.
SECTION 10.2 Repurchases of Pooled Property. If on any
Distribution Date the outstanding Senior Amount on such date is equal to or
less than 10% of the largest Senior Amount ever previously outstanding
under this Long Term Retail PSA (after giving effect to distributions to
the Purchasers on such Distribution Date), the Sellers may, at their
option, repurchase the Pooled Property by giving the Administrative Agent
irrevocable notice no later than the first Business Day of the following
calendar month. The Sellers shall pay the aggregate Repurchase Amount for
the Receivables on the Determination Date following the date of its notice.
The payment shall be made in the manner specified in Section 5.5 and shall
be distributed pursuant to Section 5.6. On such Distribution Date after
giving effect to the distribution to the Purchasers required by Section
5.6, the Sellers shall again succeed to and own all interests in and to the
Pooled Property.
SECTION 10.3 Sale of Pooled Property. (a) Mandatory Sale. The
Administrative Agent or the Agent with the consent of the Required
Purchasers may, or the Administrative Agent or the Agent at the direction
of the Required Purchasers shall, sell the Pooled Property to pay the
Purchasers any outstanding Senior Amount and any other amounts payable to
the Purchasers under this Long Term Retail PSA and the Senior Certificates
if (a) an event of the type described in Section 9.1(a)(vi) or (a)(vii)
occurs with respect to any Seller, (b) any Senior Amount is outstanding on
the Scheduled Maturity Date (after giving effect to distributions on such
date) or (c) at any date, the Senior Amount as of such date is not less
than the Pool Balance as of such date.
(b) Optional Sale. The Agent may at any time offer to sell the
Purchasers' interest in all or any portion of the Receivables for cash (i)
if the Senior Amount (plus accrued interest, fees and Increased Costs to
the date of such sale), after giving effect to such sale, will be reduced
to zero and (ii) if after giving effect thereto, no Service Default or
Retail Portfolio Termination Event shall be continuing. Proceeds of such
sale shall be treated as collections in respect of the repurchased
Receivables and applied in accordance with Section 5.6. Following the
receipt of a bona fide offer to purchase the Purchasers' interest in all or
any portion of the Receivables from any Person other than the Active
Seller, the Active Seller shall have a right of first refusal to purchase
such interest for an amount equal to the amount stated in such Person's
offer to purchase. The Sellers will be under no obligation to make such
purchase hereunder.
(c) Terms of Mandatory Sale. Any such sale or sales shall be
for cash or upon such other terms as the Agent or the Administrative Agent
shall, in its sole discretion, deem acceptable. Any of the Sellers, the
Servicer or CFC may purchase any of the Pooled Property for cash in any
such sale; provided that neither the Administrative Agent nor the Agent
shall be under any obligation to, and none of the Sellers, the Servicer or
CFC shall be deemed to have any right to require that the Administrative
Agent or the Agent, offer the Pooled Property to the Sellers, the Servicer
or CFC before soliciting any other offers or engaging in negotiations with
respect to the Pooled Property. The proceeds of any such sale shall be
first, applied against the costs and expenses (including fees and
disbursements of counsel) of the Administrative Agent or the Agent in
consummating such sale, second, applied against distributions required to
be made by paragraphs (a), (b), (d) and (e) of Section 5.6, third, applied
against any Increased Costs for which a demand has been made, fourth,
applied against any distribution required to be made by paragraph (i) of
Section 5.6 and fifth, to the extent of any proceeds remaining, turned over
to the Sellers.
ARTICLE XI
Miscellaneous
SECTION 11.1 Protection of Rights in Pooled Property. (a) The
Servicer 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 Administrative Agent and the Purchasers under
this Long Term Retail PSA in the Pooled Property. The Servicer shall
deliver (or cause to be delivered) to the Administrative Agent file-stamped
copies of, or filing receipts for, any document filed as provided in the
foregoing sentence as soon as available following such filing. In the
event that the Servicer fails to perform its obligations under this
Section, the Administrative Agent or the Agent may do so at the expense of
the Servicer.
(b) Neither the Servicer nor any Seller shall change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed pursuant to
Sections 3.1, 3.2 or 11.1(a) seriously misleading within the meaning of
sect. 9-402(7) of the UCC as in effect from time to time in the State of
Michigan, unless it shall have given each of the Administrative Agent and
the Agent written notice thereof no later than 15 days after such change.
(c) Each Seller and the Servicer shall give the Administrative
Agent and the Agent 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. Each Seller and the Servicer
shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States of
America.
(d) The Servicer shall maintain or cause to be maintained
accounts and records as to each 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 Liquidation Proceeds made and
payments owing (and the nature of each), and (ii) reconciliation between
payments or Liquidation Proceeds on (or with respect to) each Receivable
and the amounts from time to time deposited in the Certificate Account in
respect of such Receivable.
(e) The Servicer shall maintain or cause to be maintained
computer systems so that, from and after the time of sale under this Long
Term Retail PSA of the Receivables to the Certificateholders, the
Servicer's computer records (including archives) that shall refer to a
Receivable indicate clearly that such Receivable is owned by the
Certificateholders. Indication of the Certificateholders' undivided
participating ownership of a Receivable shall be deleted from or modified
on any such computer systems when, and only when, the Receivable shall
become a Repurchased Receivable.
(f) If at any time any Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
motor vehicle receivables to any prospective purchaser, lender or other
transferee, such Seller or the Servicer, as the case may be, shall give to
such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the
Certificateholders.
(g) Upon request, the Servicer, at its expense, shall furnish to
the Administrative Agent, within ten Business Days, a list of all
Receivables then held as part of the Pooled Property, together with a
reconciliation of such list to the schedules of such Receivables previously
delivered and to each of the Servicer's Certificates furnished pursuant to
Section 4.9 indicating removal of Receivables from the Pooled Property.
SECTION 11.2 Limitation on Rights of Certificateholders.
Nothing set forth in this Long Term Retail PSA, or contained in the terms
of the Certificates, shall be construed so as to constitute the Holders as
partners or members of an association. No Purchaser shall have any right
by virtue or by availing itself of any provisions of this Long Term Retail
PSA to institute any suit, action, or proceeding in equity or at law upon
or under or with respect to this Long Term Retail PSA, unless such
Purchaser previously shall have given to the Administrative Agent and the
Agent a written notice of default and of the continuance thereof and unless
the Required Purchasers shall have made written request upon the
Administrative Agent to institute such action, suit, or proceeding in its
own name as Administrative Agent under the Long Term Retail PSA and shall
have offered to the Administrative Agent such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Administrative Agent shall have refused to
institute any such action, suit or proceeding; provided that, if the
Administrative Agent has not responded to such request within 60 days after
its receipt of such notice, request and offer, the Administrative Agent
shall be deemed to have refused to institute any such action. No one or
more Purchasers shall have any right in any manner whatsoever by virtue or
by availing itself or themselves of any provisions of this Long Term Retail
PSA to affect, disturb or prejudice the rights of any other Purchasers, or
to obtain or seek to obtain priority over or preference to any other such
Purchaser or to enforce any right, under this Long Term Retail PSA, except
in the manner provided in this Long Term Retail PSA and for the equal,
ratable, and common benefit of all Purchasers. For the protection and
enforcement of the provisions of this Section 11.2, each Purchaser and the
Administrative Agent shall be entitled to such relief as can be given
either at law or in equity.
SECTION 11.3 Increased Costs. The Active Seller agrees that it
shall pay all amounts (such amounts, "Increased Costs") which arise in the
event that any of the following costs or events occur:
(a) Reemployment Costs. The Sellers agree to indemnify each
Purchaser and to hold each Purchaser harmless from any loss or expense,
including, but not limited to, any such loss or expense arising from
interest or fees payable by such Purchaser to lenders of funds obtained by
it to purchase or maintain that portion of its Purchases hereunder with
respect to which Certificate Interest is determined by reference to the
LIBO Rate as a consequence of (i) default by such Seller in the performance
of its obligations hereunder, (ii) the occurrence of a Service Default or
an event which would, with the giving of notice or the passage of time,
constitute a Service Default, (iii) the occurrence of an event referred to
in Section 11.3(b) or 11.3(c), (iv) default by such Seller in selling a
Receivables Group on any Transfer Date after having given notice of such
sale, or (v) any reduction of the Senior Amount prior to the termination of
an Accrual Period for which Certificate Interest is scheduled to be paid to
the Purchasers. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by any Purchaser to such
Seller shall be conclusive absent manifest error. This covenant shall
survive termination of this Long Term Retail PSA.
(b) Inability to Determine LIBO Rate. In the event that (a) the
Agent determines (which determination shall be conclusive and binding upon
the Sellers) that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBO Rate" are not being provided in the
relevant amounts or for the relevant maturities for the purposes of
determining rates of interest for the Purchases hereunder as provided
herein, or (b) the Required Purchasers determine (which determination shall
be conclusive and binding upon the Sellers) and shall notify the Agent that
the rates of interest referred to in the definition of "LIBO Rate" as the
basis upon which the rate of interest for Purchases hereunder is to be
determined do not adequately cover the cost to the Purchasers of making or
maintaining such Purchases, the Agent shall forthwith give telex notice of
such determination, confirmed in writing, to the Active Seller and the
Purchasers, whereupon until the Agent notifies the Active Seller and the
Administrative Agent that the circumstances giving rise to such notice no
longer exist, the Certificate Rate shall thereafter be calculated by
reference to the Base Rate.
(c) Illegality. Notwithstanding any other provision herein, if
any law, regulation, treaty or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any
Purchaser to make or maintain its interest in its Senior Certificate
because Certificate Interest on such Senior Certificate is based on the
LIBO Rate and such Purchaser shall notify the Agent, the Administrative
Agent and the Active Seller, then the portion of the Senior Amount
applicable to such Purchaser shall thereafter bear interest at a rate
determined by reference to the Base Rate. If any such change in the method
of calculating interest occurs on a day which is not the last day of the
Accrual Period, the Active Seller shall pay to the Agent for the account of
such Purchaser the amounts, if any, as may be required pursuant to
subsection 11.3(a).
(d) Additional Costs. In the event that any law, regulation,
treaty or directive or any change therein or in the interpretation or
application thereof or compliance by any Purchaser with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority enacted or made subsequent to the date hereof:
(i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Purchaser; or
(ii) does or shall impose on such Purchaser any other condition;
and the result of any of the foregoing is to increase the cost to such
Purchaser of purchasing or maintaining its portion of the Senior Amount
hereunder (such increase in cost, "Additional Costs") then, in any such
case, the Active Seller shall promptly pay to the Agent for the account of
such Purchaser, upon the written demand of such Purchaser to such Active
Seller (with a copy to the Agent), so long as such Additional Costs are not
otherwise included in the amounts required to be paid to such Purchaser
pursuant to any other paragraph under this Section 11.3, any additional
amounts necessary to compensate such Purchaser for such Additional Costs
which such Purchaser deems to be material as determined by such Purchaser.
If a Purchaser becomes entitled to claim any additional amounts pursuant to
this subsection 11.3(d), it shall promptly notify the Active Seller,
through the Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to
the foregoing sentence submitted by a Purchaser, through the Agent, to the
Active Seller shall be conclusive in the absence of manifest error.
(e) Transfer of Commitments. Upon the occurrence of any of the
events specified in subsections 11.3(c) or 11.3(d), each Purchaser whose
Long Term Commitments are affected by any such event agrees that it will
transfer such Long Term Commitments affected by any such event to another
branch office (or, if such Purchaser so elects, to an Affiliate) of such
Purchaser, provided that such transfer shall be made only if such Purchaser
shall have determined in good faith (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) that,
(a) on the basis of existing circumstances, such transfer will avoid such
events and will not result in any additional costs, liabilities or expenses
to such Purchaser or to the Active Seller and (b) such transfer is
otherwise consistent with the interests of such Purchaser.
(f) Changes in Capital Requirements. (i) In the event that, in
the opinion of counsel for any Purchaser (which may, in the discretion of
such Purchaser, be such Purchaser's internal counsel), compliance with any
law, rule, regulation or guideline, or any change therein or in the
interpretation or application thereof or compliance by any Purchaser with
any request or directive (whether or not having the force of law) from any
central bank or Governmental Authority enacted or made subsequent to the
date hereof shall affect the amount of capital required or expected to be
maintained by such Purchaser or any corporation controlling such Purchaser
and the amount of such capital that is required or expected to be
maintained is increased by or based upon the Long Term Commitment of such
Purchaser under this Long Term Retail PSA or any participation agreement
entered into pursuant to subsection 9.6 of the Long Term RPA, as applicable
(such event, a "Change in Law"), such affected Purchaser shall notify the
Active Seller and the Agent within 90 days after such affected Purchaser
shall first be required to comply with such Change in Law. At the time of
such notification such affected Purchaser shall provide the Active Seller
with a written statement setting forth the amount that would adequately
compensate such affected Purchaser for the costs associated with its
compliance with such Change in Law and setting forth in reasonable detail
the assumptions upon which such affected Purchaser calculated such amount,
and a copy of the opinion of counsel referred to in the preceding sentence.
Such affected Purchaser shall allocate to the Active Seller the costs
associated with such Change in Law in such a way that the proportion of (i)
such costs that are allocated to the Active Seller to (ii) the total of
such costs of such affected Purchaser associated with such Change in Law as
it relates to all commitments of such Purchaser to its customers of similar
creditworthiness as the Active Seller, is substantially the same as the
proportion of (i) the Long Term Commitment of such affected Purchaser under
this Long Term Retail PSA or such participation agreement to (ii) the total
of all commitments by such affected Purchaser to its customers of similar
creditworthiness as the Active Seller.
(ii) Upon the occurrence of any Change in Law, each Purchaser
whose Long Term Commitment hereunder is affected by such Change in Law
shall transfer its Commitment to another branch office (or, if such
Purchaser so elects, to an Affiliate) of such Purchaser, provided that such
transfer shall be made only if such Purchaser shall have determined in good
faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (i) on the basis of existing
circumstances, such transfer will avoid or reduce the additional payments
resulting from such Change in Law and will not result in any additional
costs, liabilities or expenses to such Purchaser (unless the Active Seller
agrees to pay such additional costs, liabilities or expenses of such
Purchaser) and (ii) such transfer is otherwise consistent with the
interests of such Purchaser.
(g) Taxes. (i) In the event that the adoption of any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to the Agent, the Administrative Agent or any
Purchaser under this Long Term Retail PSA, upon notice by such Person to
the Active Seller (with a copy to the Agent) to the effect that (A) as a
result of the adoption of such law, rule, regulation, treaty or directive
or a change therein or in the interpretation thereof, Taxes are being
withheld or deducted from amounts payable to such Person under this Long
Term Retail PSA and (B) such Purchaser has taken all action required to be
taken by it to avoid the imposition of such Taxes pursuant to clause (iii)
below prior to demanding indemnification under this clause (i), the Active
Seller will pay to the Agent for the account of such Person additional
amounts so that such additional amounts, together with amounts otherwise
payable under this Long Term Retail PSA, will yield to such Person, after
deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, the amount stated to be payable under this Long Term
Retail PSA. The term "Taxes" shall mean all net income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
imposed, levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein), excluding,
with respect to any Purchaser, net income and franchise taxes imposed with
respect to net income of any country (or any political subdivision or
taxing authority thereof or therein) where such Person is organized or
where such Person's credit commitments are booked. If the Active Seller
fails to pay any Taxes when due following notification by the Agent, the
Administrative Agent or any Purchaser as provided above, the Active Seller
shall indemnify such Person for any incremental taxes, interest or
penalties that may become payable by any such Person as a result of any
such failure by the Active Seller to make such payment.
(ii) Each Purchaser that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver
to the Active Seller and the Agent (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable
form, as the case may be, and (B) an Internal Revenue Service Form W-8 or
W-9 or successor form. Each such Purchaser also agrees to deliver to the
Active Seller and the Agent two further copies of the said Form 1001 or
4224 and Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Active
Seller, and such extensions or renewals thereof as may reasonably be
requested by the Active Seller or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Purchaser from duly completing and delivering any such
form with respect to it and such Purchaser so advises the Active Seller and
the Agent. Such Purchaser shall certify (X) in the case of Form 1001 or
4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (Y)
in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(iii) No Purchaser may request indemnification for any Taxes
from the Active Seller under clause (i) above to the extent that such Taxes
would have been avoided or reduced by such Purchaser's transfer of its
Commitments affected by such event to another office of such Purchaser (or
to an Affiliate of such Purchaser), by such Purchaser's properly claiming
the benefit of any exemption from or reduction of such Taxes (whether
provided by statute, treaty or otherwise), including, without limitation,
by delivering the forms required by clause (ii) above, or by such
Purchaser's taking any other action which in its judgment is reasonable to
avoid or reduce such Taxes, provided that such Purchaser shall not be
required to (A) take any action which in the reasonable judgment of such
Purchaser could directly or indirectly result in any increased cost or
expense or in any loss of opportunity to such Purchaser unless the Active
Seller shall have provided to such Purchaser indemnity or reimbursement
therefor in form and substance reasonably satisfactory to such Purchaser or
(B) claim or apply any tax credit against such Taxes.
(iv) Within 30 days after the payment by the Active Seller of
any income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
the Agent, the Administrative Agent or any Purchaser under this Long Term
Retail PSA and irrespective of whether such Person is entitled to demand
indemnification in respect thereof under clause (i) above, the Active
Seller will furnish to such Person (with a copy to the Agent), the original
or a certified copy of a receipt evidencing payment thereof.
SECTION 11.4 Payment of Expenses; Indemnity. (a) The Servicer
agrees to pay or reimburse the Administrative Agent and the Agent for all
their reasonable and customary out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, or any waiver of, this Long Term
Retail PSA and any other document executed and delivered in connection
herewith, including, without limitation, the fees and disbursements of
counsel to the Administrative Agent and the Agent.
(b) The Servicer agrees to pay, indemnify, and hold each
Purchaser, the Agent and the Administrative Agent harmless from and against
any and all actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever with respect to the execution, delivery,
performance, administration or enforcement of this Long Term Retail PSA
(the "indemnified liabilities"), except with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of such
Person. The agreements in this subsection shall survive repayment of the
Senior Amount and all other amounts payable hereunder.
SECTION 11.5 GOVERNING LAW. THIS LONG TERM RETAIL PSA SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS LONG TERM
RETAIL PSA SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.
SECTION 11.6 Notices. All demands, notices, and communications
under this Long Term Retail PSA shall be delivered in accordance with
Section 9.2 of the Long Term RPA.
SECTION 11.7 Severability of Provisions. If any one or more of
the covenants, provisions or terms of this Long Term Retail PSA shall be
for any reason whatsoever held invalid, then such covenants, provisions or
terms shall be deemed severable from the remaining covenants, provisions or
terms of this Long Term Retail PSA, and shall in no way affect the validity
or enforceability of the other provisions of this Long Term Retail PSA or
of the Certificates or the rights of the Holders thereof.
SECTION 11.8 Intention of Parties. (a) The execution and
delivery of this Long Term Retail PSA shall constitute an acknowledgement
by the Sellers, the Agent, the Administrative Agent and each
Certificateholder that they do not intend to establish (for Federal tax
purposes) an association taxable as a corporation. The powers granted and
obligations undertaken in this Long Term Retail PSA shall be construed so
as to further such intent.
(b) It is the intent of the Sellers and the Purchasers that, for
federal, state and local income and franchise tax purposes, the Senior
Certificates will be evidence of indebtedness of the Sellers secured by the
Pooled Property. Each Seller, by entering into this Long Term Retail PSA,
and each Purchaser by the acceptance of its Senior Certificate, agrees to
treat the Senior Certificates for federal, state and local income and
franchise tax purposes as indebtedness of the Sellers, except as otherwise
required by law or any tax authorities.
SECTION 11.9 Counterparts. For the purpose of facilitating the
execution of this Long Term Retail PSA and for other purposes, this Long
Term Retail PSA may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same
instrument.
SECTION 11.10 Survival of Representations and Warranties. All
representations and warranties made herein shall survive the execution and
delivery of this Long Term Retail PSA and the Certificates.
SECTION 11.11 No Petition. Each of the Servicer, the Agent, the
Administrative Agent and each Purchaser hereby covenants and agrees that
such Person shall not at any time institute against any Seller any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any Federal or state bankruptcy or
similar law.
IN WITNESS WHEREOF, the parties have caused this Long Term Retail
PSA to be duly executed and delivered in New York, New York by their
respective officers thereunto duly authorized as of the day and year first
above written.
AMERICAN AUTO RECEIVABLES
COMPANY, as the Initial Seller
By: /s/ John J. Shea
Title: Assistant Treasurer
CHRYSLER CREDIT CORPORATION
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
CHEMICAL BANK, as Agent and
as Administrative Agent
By: /s/ Karen Sager
Title: Vice President
<PAGE>
ANNEX 1 to
the Long Term Retail PSA
SCHEDULE OF
DEFINITIONS
The following words and phrases shall have the following
meanings:
"Accrual Period" means, with respect to any Distribution Date, the
period from and including the preceding Distribution Date (or, with respect
to the initial Accrual Period, from the initial Transfer Date) to but
excluding such Distribution Date.
"Active Seller" means the Seller which became party to the Long Term
Retail PSA last in time.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit A to the Long Term RPA by which a Purchaser becomes a party to the
Long Term Retail PSA and the Long Term RPA.
"Addition Notice" means, with respect to the transfer of a Receivables
Group to the Purchasers pursuant to Section 2.1 of the Long Term Retail
PSA, notice, which (i) shall be given not later than 10 days prior to the
related Transfer Date, of the Active Seller's designation of such
Receivables Group to be transferred to the Purchasers and (ii) shall
include (A) the aggregate Principal Balance of such Receivables Group and
(B) the Schedule of Anticipated Collections with respect to such
Receivables Group.
"Additional Seller Supplement" shall mean an instrument, substantially
in the form of Exhibit G to the Long Term Retail PSA, by which a Seller
becomes a party to the Long Term Retail PSA and the Long Term RPA.
"Adjusted Weighted Average APR" shall mean, with respect to the
Receivables Group transferred on any Transfer Date, the sum of (i) the
weighted average APR with respect to such Receivables Group and (ii) the
APR Increment designated by the Active Seller on such Transfer Date.
"Advance" means either a Precomputed Advance or Simple Interest
Advance or both, as applicable.
"Affiliate" shall have the meaning assigned in the Long Term RPA.
"Aggregate Original Pool Balance" means, with respect to each Transfer
Date, the aggregate Principal Balance of the Receivables Group transferred
on each such date.
"Aggregate Invested Amount" shall have the meaning assigned in the
Long Term RPA.
"Amortizing Payment" means with respect to each Fixed Value Receivable
and each Collection Period prior to the date on which the Fixed Value
Payment is due, the amount specified on 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 a Seller or purchase by the
Servicer the Amortizing Payment shall be equal to the aggregate "Amount of
Each Payment" which has not yet been paid for the period through and
including the last payment prior to the date when the Fixed Value Payment
is due less the amount of the unearned finance charges under the related
Contract allocable to such amount in accordance with the Servicer's
customary procedures.
"Amount Financed" means (a) with respect to a Standard Receivable the
amount advanced under the Standard Receivable toward the purchase price of
the Financed Vehicle and any related costs, exclusive of any amount
allocable to the premium of force-placed physical damage insurance covering
the Financed Vehicle and (b) with respect to a Fixed Value Receivable the
"Amount Financed" means 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, 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.
"Applicable Senior Percentage" means (i) prior to the Retail
Commitment Termination Date, the Senior Percentage; (ii) otherwise, 100%.
"Applicable Subordinated Percentage" means 100% minus the Applicable
Senior Percentage.
"APR" of a Receivable means the annual rate of finance charges stated
in the related Contract.
"APR Increment" means, with respect to the Receivables Group
transferred on any Transfer Date, the positive number designated by the
Active Seller on such date, which number represents the positive
difference, if any, between (a) the cap strike price set forth in the
related Interest Rate Cap Agreement entered into by the Active Seller on
such Transfer Date and (b) the weighted average APR for such Receivables
Group as set forth in the Schedule of Anticipated Collections delivered in
respect of such date.
"Assignment" shall have the meaning assigned in Section 3.3 of the
Long Term Retail PSA.
"Assignment and Acceptance" shall have the meaning assigned in the
Long Term RPA.
"Available Amounts" shall have the meaning specified in Section
5.6(a) of the Long Term Retail PSA and shall be determined by the priority
set forth in such definition.
"Base Rate" shall have the meaning assigned in the Long Term RPA.
"Business Day" shall have the meaning assigned in the Long Term RPA.
"Cap Provider" means each counterparty to an Interest Rate Cap
Agreement, the long-term debt of which is rated at least A by S&P or
Moody's.
"CFC" means Chrysler Financial Corporation, a Michigan corporation.
"CFC Revolving Credit Agreement" shall have the meaning assigned in
the Long Term RPA.
"Certificate" shall mean any Senior Certificate or the Subordinated
Certificate.
"Certificate Account" means the account or accounts established and
maintained as such pursuant to Section 5.1 of the Long Term Retail PSA.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered in the Register.
"Certificate Interest" means interest payable in respect of the
Certificates.
"Certificate Principal" means principal payable in respect of the
Certificates.
"Certificate Rate" for each Accrual Period means the rate per annum
equal to the LIBO Rate applicable to such Accrual Period plus the
Eurodollar Margin, calculated on the basis of the actual number of days
elapsed during such Accrual Period divided by 360; provided that if the
Senior Amount is increased on a day other than a Distribution Date,
interest shall accrue on such increase at the Base Rate for the period from
such day to the day prior to the next succeeding Distribution Date and
shall be calculated on the basis of the actual number of days in such
Accrual Period and a 365/6 day year.
"Collection Account" means the account or accounts established and
maintained as such pursuant to Section 5.1 of the Long Term Retail PSA.
"Collection Period" means each calendar month during the term of the
Long Term Retail PSA.
"Commitment Percentage" shall have the meaning assigned in the Long
Term RPA.
"Commitment Termination Event" shall have the meaning assigned in the
Long Term RPA.
"Computer Tape" means the computer tape generated by the Servicer on
behalf of a Seller which provides information relating to the Receivables.
"Contract" means a motor vehicle retail installment sale contract.
"Cutoff Date" means the last day of the calendar month preceding the
calendar month in which the related Transfer Date occurs.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to CCC under an existing
agreement between such dealer and CCC.
"Default Rate" shall have the meaning assigned in the Long Term RPA.
"Deposit Date" means, with respect to any Collection Period, the
Business Day immediately preceding the related Distribution Date.
"Determination Date" means, with respect to any Distribution Date, the
later of the eighth Business Day and the eleventh calendar day of the
calendar month in which such Distribution Date occurs.
"Distribution Date" means, with respect to each Collection Period, the
fifteenth day of the following month, or if the fifteenth day is not a
Business Day, the next following Business Day.
"Effective Date" shall have the meaning assigned in Section 3.1 of the
Long Term Retail PSA.
"Eligible Institution" means any depository institution or trust
company incorporated under the laws of the United States of America or any
state thereof which is subject to supervision and examination by federal or
state banking or depository institution authorities, or any depository
institution or trust company incorporated under the laws of any foreign
jurisdiction which has a branch or agency located in the United States of
America and which depository institution, trust company or branch (i) is
subject to supervision and examination by federal or state banking or
depository institution authorities and (ii) the commercial paper, if any,
of which has a credit rating from Moody's and S&P of at least P-1 and A-1,
respectively, and the long-term unsecured debt obligations of which have a
credit rating from Moody's and S&P of at least A, in each case at the time
of the investment or contractual commitment to invest therein.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (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 S&P and Moody's 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 S&P
and Moody's in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
of S&P and Moody's in the highest investment category granted thereby
(including funds for which the Trustee (as defined in the Long Term
Wholesale Series Supplement referred to in the Long Term RPA) or any
of its Affiliates is investment manager or advisor);
(e) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC;
(f) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above; and
(g) 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 (i) a depository institution
or trust company (acting as principal) described in clause (b) or
(ii) a depository institution or trust company the deposits of which
are insured by FDIC.
"Eligible Servicer" means a Person which, at the time of its
appointment as subservicer or successor Servicer, (i) is servicing a
portfolio of motor vehicle retail installment sales contracts and/or motor
vehicle loans, (ii) is legally qualified, and has the capacity, to service
the Receivables, (iii) has demonstrated the ability to professionally and
competently service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle loans similar to the Contracts in accordance
with high standards of skill and care, and (iv) is qualified and entitled
to use, pursuant to a license or other written agreement, and agrees, to
the extent set forth in such license or written agreement, to maintain the
confidentiality of, the software which such subservicer or successor
Servicer uses in connection with performing its duties and responsibilities
under the Long Term Retail PSA or obtains rights to use, or develops at its
own expense, its own software which is adequate to perform its duties and
responsibilities under the Long Term Retail PSA.
"Eurodollar Margin" shall have the meaning assigned in the Long Term
RPA.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable, as the case may
be.
"Fixed Value Payment" means with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount
of Fixed Value Payment" reduced (i) in the case of a prepayment or
repurchase, by the amount of the unearned finance charges under the related
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 II
(which Schedule may be in the form of microfiche), as such Schedule shall
be supplemented to reflect the transfer of each Receivables Group to the
Purchasers pursuant to Section 2.1 of the Long Term Retail PSA, 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 which
is greater than the scheduled monthly payments and is due after payment of
such scheduled monthly payments and which 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 Fixed Value Payment in accordance with certain
conditions.
"Governmental Authority" shall have the meaning assigned in the Long
Term RPA.
"Increased Costs" shall have the meaning specified in Section 11.3 of
the Long Term Retail PSA.
"Insurance Policies" means all comprehensive and collision, fire and
theft insurance policies maintained by the Obligors with respect to the
Financed Vehicles, any credit and disability insurance maintained by the
Obligors and benefitting CCC.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, in respect of
the preceding Collection Period: (a) that portion of all collections on
Receivables (including, in the case of Precomputed Receivables, amounts
withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account) allocable to interest, (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
Repurchase Amount of each Receivable that became a Repurchased Receivable
during such Collection Period to the extent attributable to accrued
interest on such Receivable, (e) Recoveries for such Collection Period,
(f) Investment Earnings for such Distribution Date, (g) amounts payable
under the Interest Rate Cap Agreement on or prior to such Distribution Date
and (h) an amount equal to the aggregate Monthly Yield Account Withdrawals
with respect to such 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 Repurchased
Receivables the Repurchase 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 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.
"Interest Rate Cap Agreement" means each agreement (including
schedules thereto and confirmations delivered thereunder) between each
Active Seller and the Cap Provider named therein, each in a form that shall
be reasonably satisfactory to the Agent.
"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 on such Distribution Date, which earnings
shall be deposited into the Certificate Account on the Deposit Date
preceding such Distribution Date.
"LIBO Rate" shall have the meaning assigned in the Long Term RPA.
"Lien" means a security interest, lien, charge, pledge or encumbrance
of any kind, other than tax liens, mechanics' liens and any liens which
attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source
on a Liquidated Receivable during the Collection Period in which such
Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer in connection with such liquidation and any
amounts required by law to be remitted to the Obligor on such Liquidated
Receivable.
"Long Term Aggregate Commitment" shall mean "Long Term Aggregate
Commitment Amount", as defined in the Long Term RPA.
"Long Term Commitment" shall have the meaning assigned in the Long
Term RPA.
"Long Term Commitment Termination Date" shall have the meaning
assigned in the Long Term RPA.
"Long Term Retail PSA" means the Long Term Participation and Servicing
Agreement, dated as of May 23, 1994, among CCC, the Purchasers, the
Sellers, the Agent and the Administrative Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"Long Term RPA" means the Long Term Receivables Purchase Agreement,
dated as of May 23, 1994, among the Sellers, CCC, CFC, the Purchasers, the
Agent and the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"Minimum Reserve Account Balance" at any date means .75% of the sum of
the Aggregate Original Pool Balance for all Receivables Groups transferred
on or prior to such date, except for any Receivables Group the Receivables
of which have a Principal Balance equal to zero at such date.
"Monthly Yield Account Withdrawal" means, with respect to any
Distribution Date and any then outstanding Receivables Group for which a
Yield Deposit was made on the related Transfer Date, an amount to be
withdrawn from the Yield Account on such date (to the extent of deposits
available therefor), which amount shall equal the product of (a) the APR
Increment in respect of such Receivables Group divided by 12 and (b) the
aggregate Principal Balance of the Receivables included in such Receivables
Group as of the first day of the related Collection Period.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officer's Certificate" means a certificate signed by (a) a
Responsible Officer and (b) a treasurer, assistant treasurer, secretary or
assistant secretary of any Seller, CFC or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to any Seller or the Servicer, which
counsel shall be acceptable to the Agent.
"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
5.4(a) of the Long Term Retail PSA.
"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 5.4(b) of the Long Term Retail PSA.
"Payahead" on 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 5.3 of the Long Term Retail PSA with respect to
such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Long Term Retail PSA.
"Payahead Balance" on a Precomputed Receivable means the sum, as of
the close of business on the last day of a Collection Period, of all
Payaheads made by or on behalf of the Obligor with respect to such
Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable, pursuant to Sections 5.3 and
5.4 of the Long Term Retail PSA.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Pool Balance" as of any date of determination, means the aggregate
Principal Balance of the Receivables (excluding Repurchased Receivables and
Liquidated Receivables) on such date.
"Pooled Property" means (i) the Receivables, (ii) certain monies due
in respect thereof on or after the related Cutoff Date, (iii) funds
deposited in the Trust Accounts, (iv) all of each Seller's rights,
remedies, powers and privileges under the Purchase Agreement and each
Interest Rate Cap Agreement to which it is a party, (v) security interests
in the Financed Vehicles securing the Receivables and (vi) any proceeds
from claims on the Insurance Policies.
"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 Receivable pursuant to Section 5.4(a) of
the Long Term Retail PSA.
"Precomputed Receivable" means any Receivable 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 are monthly
actuarial receivables.
"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, which Scheduled Payments shall have been made by or
on behalf of the related Obligor, 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 Repurchase 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 Repurchase
Amount with respect to the Simple Interest Receivable allocable to
principal.
"Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication,
in respect of the preceding Collection Period: (a) that portion of all
collections on Receivables (including, with respect to Precomputed
Receivables, amounts withdrawn from the Payahead Account but excluding
amounts deposited into the Payahead Account) allocable to principal,
(b) Liquidation Proceeds attributable to the principal amount of
Receivables which became Liquidated Receivables during such Collection
Period in accordance with the Servicer's customary servicing procedures,
plus the amount of Realized Losses with respect to such Liquidated
Receivables, (c) all Precomputed Advances made by the Servicer of principal
due on the Precomputed Receivables, (d) to the extent attributable to
principal, the Repurchase Amount of each Receivable that became a
Repurchased 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 Obligor as of the date of the original
contract and only to the extent not included under clause (a) above and
(f) on the Distribution Date immediately preceding the Scheduled Maturity
Date, any amounts advanced by the Servicer on such Distribution Date with
respect to principal on the Receivables; provided, however, that in
calculating the 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 Repurchased Receivables the Repurchase Amount
of which has been included in the Principal Distribution Amount in a prior
Collection Period and (iv) Recoveries.
"Purchase" shall have the meaning specified in Section 2.1 of the Long
Term Retail PSA.
"Purchase Agreement" means the Long Term Purchase and Sale Agreement
between CFC, as seller, and each Seller, as buyer, substantially in the
form of Exhibit D to the Long Term Retail PSA, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms of the Long Term Retail PSA.
"Purchase Commitment" means with respect to any Purchaser and with
respect to a Purchase on any Transfer Date, the product of (a) such
Purchaser's Commitment Percentage and (b) the aggregate Purchase Price of
the Receivables sold on such date, which amount such Purchaser shall pay to
make such Purchase.
"Purchase Percentage" as to any Purchaser on any date of determination
means the percentage of the Senior Amount represented by the Senior
Certificate or Senior Certificates held by such Purchaser on such date of
determination.
"Purchase Price" means on any Transfer Date the product of (a) one
minus the Subordinated Percentage and (b) the aggregate Principal Balance
of the Receivables Group being transferred on such date.
"Realized Losses" means the excess of the Principal Balance of any
Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal.
"Reallocated Payments" shall have the meaning assigned in Section
5.7(c) of the Long Term Retail PSA.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 2.7 of the
Long Term Retail PSA.
"Receivables Group" means with respect to any Transfer Date the
Standard Receivables and Fixed Value Receivables transferred to the
Purchasers pursuant to Section 2.1 of the Long Term Retail PSA, which shall
be listed on Schedules II and III, respectively.
"Record Date" means, in respect of each Accrual Period, the last day
of each calendar month.
"Recoveries" means, with respect to any Liquidated Receivable, monies
collected in respect thereof, from whatever source, during any Collection
Period following the Collection Period in which such Receivable became a
Liquidated Receivable, net of the sum of any amounts expended by the
Servicer for the account of the Obligor and any amounts required by law to
be remitted to the Obligor.
"Related Property" means the collective reference to the property
referred to in clauses (ii) through (vi) of the definition of Pooled
Property.
"Repurchase Amount" means the amount, as of the close of business on
the last day of a Collection Period, required to prepay in full the
respective Receivable under the terms thereof, including interest thereon
which shall accrue through the date of such repurchase.
"Repurchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant
to Section 4.7 of the Long Term Retail PSA or by the Seller pursuant to
Section 2.6 of the Long Term Retail PSA.
"Required Purchasers" means "Required Banks", as defined in the Long
Term RPA.
"Requirement of Law" shall have the meaning assigned in the Long Term
RPA.
"Reserve Account" means the account established and maintained as such
pursuant to Sections 5.1 and 5.7 of the Long Term Retail PSA.
"Reserve Account Deposit" means with respect to each Transfer Date an
amount equal to the difference, if any, between the Minimum Reserve Account
Balance and the Specified Reserve Account Balance, in each case, as of such
date.
"Reset Date" with respect to any Accrual Period means the Distribution
Date following the last day of such Accrual Period.
"Responsible Officer" shall have the meaning assigned in the Long Term
RPA.
"Retail Commitment Termination Date" shall mean the earliest to occur
of (i) a Retail Portfolio Termination Event, (ii) a Commitment Termination
Event or (iii) the Long Term Commitment Termination Date.
"Retail Portfolio Termination Event" shall have the meaning assigned
in the Long Term RPA.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, or its successor.
"Schedule of Anticipated Collections" means, with respect to a
Receivables Group transferred on any Transfer Date, a schedule,
substantially in the form of Exhibit I to the Long Term Retail PSA and
delivered along with the related Addition Notice, on which the Servicer
will set forth (i) the scheduled payments of principal and interest in
respect of such Receivables Group (assuming a prepayment rate on the
Receivables included in such Receivables Group of an amount equal to the
product of (a) 1.1% per month and (b) the aggregate Principal Balance of
the Receivables included in such Receivables Group as of the first day of
the related Collection Period), (ii) the weighted average APR with respect
to such Receivables Group and (iii) the Yield Deposit, if any, to be
deposited by the Servicer in the Yield Account with respect to such
Receivables Group on such date.
"Scheduled Maturity Date" means the Distribution Date falling in the
66th month following the Long Term Commitment Termination Date.
"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" has the meaning assigned in the preamble.
"Seller Addition Date" shall have the meaning assigned in Section 3.2
of the Long Term Retail PSA.
"Seller Subordinated Note" means, with respect to any Transfer Date, a
note, substantially in the form of Exhibit J to the Long Term Retail PSA,
executed by the Active Seller and delivered to CFC pursuant to the Purchase
Agreement, which note shall represent monies borrowed by the Active Seller
from CFC from time to time to fund the purchase of Receivables by the
Active Seller from CFC pursuant to the Purchase Agreement.
"Senior Amount" at any date of determination means the aggregate
amounts paid by the Purchasers for the Senior Certificates less the
aggregate amount of payments distributed as principal on account of the
Senior Certificates.
"Senior Certificate" means a certificate executed by the Seller and
delivered to a Purchaser, substantially in the form of Exhibit A to the
Long Term Retail PSA.
"Senior Certificate Supplement" shall mean an instrument,
substantially in the form of Exhibit H to the Long Term Retail PSA, by
which a Seller becomes a party to the Senior Certificate.
"Senior Percentage" means, as of any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the Senior Amount as of
the last day of the related Collection Period and the denominator of which
is the Pool Balance as of the last day of the related Collection Period.
"Service Default" means an event specified in Section 9.1 of the Long
Term Retail PSA.
"Servicer" means CCC in its capacity as Servicer of the Receivables,
and each successor to CCC (in the same capacity) pursuant to Sections 8.4
and 9.2 of the Long Term Retail PSA.
"Servicer's Certificate" has the meaning specified in Section 4.9 of
the Long Term Retail PSA.
"Servicing Fee" with respect to a Collection Period means the fee
payable to the Servicer for services rendered during such Collection Period
pursuant to Section 4.8 of the Long Term Retail PSA.
"Short Term Retail PSA": the Short Term Participation and Servicing
Agreement, dated as of May 23, 1994, among the Retail Sellers, CCC, the
Banks, the Agent and the Administrative Agent, substantially in the form of
Exhibit B to the Short Term RPA, as the same may be amended, supplemented
or otherwise modified from time to time.
"Short Term RPA": the Short Term Receivables Purchase Agreement,
dated as of May 23, 1994, among CFC, CCC, the Wholesale Seller, the Retail
Sellers, the Banks, the Agent and the Administrative Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"Shortfall" means on any Distribution Date the amount, if any, by
which the amounts required to be distributed on such date to the Purchasers
as interest or principal exceeds Available Amounts as calculated on such
date.
"Shortfall Interest" shall have the meaning assigned in Section 5.6(a)
of the Long Term Retail PSA.
"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 5.4(b) of the Long Term Retail PSA.
"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 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" at any date of determination means
the amount on deposit in the Reserve Account at the close of business of
such day.
"Standard Receivable" means any receivable for which the related
Contract provides that fixed level monthly payments be made by the Obligor
thereunder for the entire term of such Contract; each such Standard
Receivable shall be listed on Schedule I (which Schedule may be in the form
of microfiche), as such Schedule shall be amended to reflect the transfer
of any subsequent Receivables Group to the Purchasers pursuant to Section
2.1 of the Long Term Retail PSA.
"Subordinated Certificate" means the certificate executed and held by
the Seller, substantially in the form of Exhibit B to the Long Term Retail
PSA, which certificate represents an interest in the Pooled Property equal
to the difference, at any date, between the Pool Balance and the Senior
Amount, each as of such date.
"Subordinated Percentage" at any date means 9%; provided that on any
Transfer Date the Subordinated Percentage with respect to any Receivables
Group purchased on or after such date shall be adjusted upwards (without
duplication) as follows: if, for any three-month rolling period, Realized
Losses as a percentage of CCC's total collections and Realized Losses on
its entire retail installment sales contracts portfolio (including sold and
unsold contracts) exceeds (i) 2.75%, the Subordinated Percentage shall be
increased by .75%, (ii) 3.50%, the Subordinated Percentage shall be
increased by 1.50% and (iii) 4.25%, the Subordinated Percentage shall be
increased by 2.25%.
"Transfer Date" means any date on which Receivables are to be
transferred to the Purchasers pursuant to Section 2.1 of the Long Term
Retail PSA.
"Transferred Property" shall have the meaning assigned in the Purchase
Agreement.
"Trust Account" shall have the meaning specified in Section 5.1 of the
Long Term Retail PSA.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
"Yield Account" means the account established and maintained as such
pursuant to Section 5.1 of the Long Term Retail PSA.
"Yield Deposit" means, with respect to the Receivables Group
transferred on any Transfer Date, a cash deposit of the Active Seller in
the Yield Account on such Transfer Date in an amount equal to (a) the sum
of all beginning monthly principal balances (as set forth in the Schedule
of Anticipated Collections delivered immediately prior to such Transfer
Date) multiplied by (b) the APR Increment divided by (c) 12.
Exhibit 10-J
CONFORMED COPY
===========================================================================
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
and
MANUFACTURERS AND TRADERS TRUST COMPANY
Trustee
__________________________________________________________
LONG TERM
BANK SUPPLEMENT
Dated as of May 23, 1994
to
POOLING AND SERVICING AGREEMENT
Dated as of May 31, 1991
________________________________________________________
CARCO AUTO LOAN MASTER TRUST
BANK SERIES
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
CREATION OF THE BANK SERIES CERTIFICATES. . . . . . . . .1
SECTION 1.1. Designation . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II
DEFINITIONS. . . . . . . . . . . . . . . .2
SECTION 2.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE III
THE BANK SERIES CERTIFICATES. . . . . . . . . . . .2
SECTION 3.1. Purchases of the Bank Series
Certificates . . . . . . . . . . . . . . . . . . . . .2
SECTION 3.2. Procedure for Increasing the
Invested Amount. . . . . . . . . . . . . . . . . . . .2
SECTION 3.3. Procedure for Decreasing the
Invested Amount. . . . . . . . . . . . . . . . . . . .4
SECTION 3.4. Interest. . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.5. Indemnification by Seller . . . . . . . . . . . . . . . . .4
SECTION 3.6. Pro Rata Payments . . . . . . . . . . . . . . . . . . . . .4
ARTICLE IV
SERVICING FEE . . . . . . . . . . . . . . .5
SECTION 4.1. Servicing Compensation. . . . . . . . . . . . . . . . . . .5
ARTICLE V
RIGHTS OF BANK SERIES CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS . . . . . . . .5
SECTION 5.1. Allocations; Payments to Seller;
Excess Principal Collections
and Unallocated Principal
Collections. . . . . . . . . . . . . . . . . . . . . .5
SECTION 5.2. Determination of Monthly Interest . . . . . . . . . . . . .7
SECTION 5.3. Determination of Monthly Principal. . . . . . . . . . . . .8
SECTION 5.4. Establishment of Reserve Account. . . . . . . . . . . . . .8
SECTION 5.5. Deficiency Amount . . . . . . . . . . . . . . . . . . . . .9
SECTION 5.6. Application of Bank Non-Principal
Collections, Available Seller
Non-Principal Collections, and
Available Bank Principal
Collections. . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.7. Application of Reserve Account and
Available Subordinated Amount. . . . . . . . . . . . 11
SECTION 5.8. Investor Charge-offs. . . . . . . . . . . . . . . . . . . 12
SECTION 5.9. Excess Servicing. . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.10. Excess Principal Collections. . . . . . . . . . . . . . . 13
ARTICLE VI
DISTRIBUTIONS AND REPORTS . . . . . . . . . . . 13
SECTION 6.1. Distributions . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.2. Daily Reports . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.3. Periodic Reports. . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
ADDITIONAL EARLY AMORTIZATION EVENTS. . . . . . . . . 15
SECTION 7.1. Additional Early Amortization
Events . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.2. Notice of Early Amortization Event. . . . . . . . . . . . 16
ARTICLE VIII
CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . 16
SECTION 8.1. Reemployment Costs. . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Inability to Determine LIBO Rate. . . . . . . . . . . . . 16
SECTION 8.3. Illegality. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.4. Increased Costs . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.5. Changes in Capital Requirements . . . . . . . . . . . . . 18
SECTION 8.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.7. Section 8 Costs . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX
OPTIONAL REPURCHASE. . . . . . . . . . . . . 21
SECTION 9.1. Optional Repurchase . . . . . . . . . . . . . . . . . . . 21
ARTICLE X
FINAL DISTRIBUTIONS. . . . . . . . . . . . . 21
SECTION 10.1. Sale of Certificateholders' Inter-
est Pursuant to Section 2.03
of the Wholesale PSA;
Distributions, Pursuant to
Section 9.1 of this Long Term
Supplement or Section 2.03 or
12.02(c) of the Wholesale PSA. . . . . . . . . . . . 21
SECTION 10.2. Distribution of Proceeds of Sale,
Disposition or Liquidation of
the Receivables Pursuant to
Section 9.02 of the Wholesale
PSA. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XI
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . 23
SECTION 11.1. Ratification of Wholesale PSA . . . . . . . . . . . . . . 23
SECTION 11.2. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11.3. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11.5. Successors and Assigns. . . . . . . . . . . . . . . . . . 23
SECTION 11.6. Physical Certificates . . . . . . . . . . . . . . . . . . 23
SECTION 11.7. Rights of Certificateholder . . . . . . . . . . . . . . . 23
SECTION 11.8. Certificate Transfer Restrictions . . . . . . . . . . . . 24
SECTION 11.9. Trustee's Communications. . . . . . . . . . . . . . . . . 24
ARTICLE XII
COVENANTS, REPRESENTATIONS AND WARRANTIES . . . . . . . 24
SECTION 12.1. Representations and Warranties of
the Seller and the Servicer. . . . . . . . . . . . . 24
SECTION 12.2. Covenants of the Servicer . . . . . . . . . . . . . . . . 24
ARTICLE XIII
CONDITIONS PRECEDENT. . . . . . . . . . . . . 25
SECTION 13.1. Conditions Precedent to
Effectiveness of Long Term
Supplement . . . . . . . . . . . . . . . . . . . . . 25
SECTION 13.2. Conditions Precedent to Increase. . . . . . . . . . . . . 26
ANNEX
I Definitions
EXHIBITS
A Form of Bank Series Certificate
B Form of Distribution Date Statement
C Form of Daily Report
D-1 Form of Monthly Certificateholders'
Statement (Revolving Period)
D-2 Form of Monthly Certificateholders' Statement
(Early Amortization Period)
E Forms of Effective Date Opinions
F Forms of Undertaking Letters
<PAGE>
LONG TERM BANK SUPPLEMENT dated as of May 23, 1994 (the "Long
Term Supplement"), among U.S. AUTO RECEIVABLES COMPANY, a Delaware
corporation, as Seller, CHRYSLER CREDIT CORPORATION, a Delaware
corporation, as Servicer, MANUFACTURERS AND TRADERS TRUST COMPANY, a New
York banking corporation, as Trustee (in such capacity, the "Trustee"), the
several banks parties to this Long Term Supplement as of the Effective Date
(collectively, the "Initial Bank Series Certificateholders" and,
individually, an "Initial Bank Series Certificateholder"), the other
financial institutions from time to time parties hereto as
certificateholders and CHEMICAL BANK, a New York banking corporation, as
agent for the Bank Series Certificateholders (in such capacity, the
"Agent"), and as administrative agent (in such capacity, the
"Administrative Agent").
Pursuant to the Pooling and Servicing Agreement dated as of May
31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO") to the
Seller on August 8, 1991 (as assigned, amended and supplemented, the
"Wholesale PSA"), among the Seller, the Servicer and the Trustee, CARCO has
created and assigned to the Seller its interests in the CARCO Auto Loan
Master Trust (the "Trust"). Section 6.03 of the Wholesale PSA provides
that the Seller may from time to time direct the Trustee to issue, on
behalf of the Trust, one or more new Series of Investor Certificates
representing fractional undivided interests in the Trust. The Principal
Terms of any new Series are to be set forth in a Long Term Supplement to
the Wholesale PSA.
Pursuant to this Long Term Supplement, the Seller and the Trustee
shall create a new Series of Investor Certificates and specify the
Principal Terms thereof.
The Seller, the Bank Series Certificateholders, the Servicer,
Chrysler Financial Corporation ("CFC"), American Auto Receivables Company,
the Agent, and the Administrative Agent have entered into a Long Term
Receivables Purchase Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Long Term RPA"),
pursuant to which the parties hereto agreed to enter into this Long Term
Supplement.
ARTICLE I
Creation of the Bank Series Certificates
SECTION 1.1. Designation. (a) There is hereby created a Series
of Investor Certificates to be issued pursuant to the Wholesale PSA and
this Long Term Supplement to be known as the "Revolving Certificates, Bank
Series" (the "Bank Series Certificates").
(b) In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained
in the Wholesale PSA, the terms and provisions of this Long Term Supplement
shall govern. ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN ARE
DEFINED IN THE WHOLESALE PSA. All Article, Section or subsection
references herein shall mean Article, Section or subsections of this Long
Term Supplement, except as otherwise provided herein.
ARTICLE II
Definitions
SECTION 2.1. Definitions. (a) The capitalized terms used
herein which are defined in or by reference in Annex I hereto shall have
the meanings specified therein.
(b) The definitions in Annex I 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.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Long Term Supplement shall refer to this
Long Term Supplement as a whole and not to any particular provision of this
Long Term Supplement; and the term "including" means "including without
limitation".
ARTICLE III
The Bank Series Certificates
SECTION 3.1. Purchases of the Bank Series Certificates. (a)
Subject to the terms and conditions of this Long Term Supplement, each
Initial Bank Series Certificateholder hereby severally agrees (i) to
purchase from the Trust on the Effective Date a Bank Series Certificate for
an amount equal to such Initial Bank Series Certificateholder's Commitment
Percentage of the Initial Aggregate Bank Invested Amount and (ii) to
maintain, in accordance with the provisions of this Long Term Supplement,
an interest in the Trust, subject to increase or decrease during the
Revolving Period, equal to such Bank Series Certificateholder's Commitment
Percentage of the Aggregate Bank Invested Amount.
(b) Subject to the terms and conditions of this Long Term
Supplement, each Purchasing Bank hereby severally agrees to maintain, in
accordance with the provisions of this Long Term Supplement, an interest in
the Trust, subject to increase or decrease during the Revolving Period,
equal to such Bank Series Certificateholder's Commitment Percentage of the
Aggregate Bank Invested Amount.
SECTION 3.2. Procedure for Increasing the Invested Amount. (a)
Subject to subsection 2.3 of the Long Term RPA and subsections 3.2(b) and
13.2 hereof, on any Business Day during the Revolving Period, the Invested
Amount may be increased by increasing each Bank Series Certificateholder's
Bank Invested Amount (an "Increase"), up to an amount not exceeding such
Bank Series Certificateholder's Long Term Commitment, upon the request of
the Seller on behalf of the Trust (each date on which an increase in the
Invested Amount occurs hereunder being herein referred to as the "Increase
Date" applicable to such Increase); provided that the Servicer shall have
given the Administrative Agent irrevocable written notice (effective upon
receipt) of such request pursuant to subsection 2.3 of the Long Term RPA,
and provided, further, that no more than one Increase shall be made during
any calendar month.
(b) The Bank Series Certificateholders shall not increase their
respective Bank Invested Amounts on any Increase Date hereunder if:
(i) the Seller shall not have increased the Available
Subordinated Amount to an amount greater than or equal to the Required
Available Subordinated Amount (after giving effect to such Increase);
(ii) the related Increase Amount is less than $50,000,000;
(iii) after giving effect to the Increase, the Aggregate Invested
Amount would exceed the aggregate Long Term Commitments (determined as
of the date the notice of such Increase is given);
(iv) an Early Amortization Event or an event which, with the
passage of time or the giving of notice, would be an Early
Amortization Event has occurred and is continuing;
(v) after giving effect to the Increase, the Aggregate Bank
Invested Amount would exceed the Wholesale Bank Series Certificate
Sublimit;
(vi) after giving effect to the Increase, the Required
Participation Amount would exceed the Pool Balance at such time;
(vii) the conditions precedent set forth in subsection 4.3 of the
Long Term RPA and subsection 13.2 hereof shall not have been
satisfied;
(viii) if such Increase takes place prior to the Distribution Date
occurring in the calendar month such Increase is made, the Seller
shall not have deposited in the Collection Account an amount (a
"Pre-Accrual Period Deposit") equal to the Daily Base Rate Interest
Expense estimated by the Administrative Agent to accrue with respect
to such Increase for the period from the date of such Increase to such
Distribution Date; or
(ix) any "Event of Default" under and as defined in the CFC
Revolving Credit Agreement has occurred and its continuing.
(c) Payment by the Bank Series Certificateholders in respect of
any Increase shall be made to the Administrative Agent pursuant to
subsection 2.3 of the Long Term RPA.
SECTION 3.3. Procedure for Decreasing the Invested Amount. On
any Distribution Date during the Revolving Period, upon request of the
Seller on behalf of the Trust, the Aggregate Bank Invested Amount may be
reduced (a "Decrease") by the distribution to the Administrative Agent on
behalf of the Bank Series Certificateholders of some or all of Available
Bank Principal Collections on such Distribution Date; provided that the
Servicer shall have given the Administrative Agent written notice
(effective upon receipt) prior to 12:00 Noon (New York City time) two
Business Days prior to the date of such Decrease stating the amount of such
Decrease and provided, further, that such Decrease shall be in an amount
equal to or greater than $25,000,000. The Available Subordinated Amount
shall simultaneously be reduced to an amount equal to the Required
Available Subordinated Amount after giving effect to such Decrease.
SECTION 3.4. Interest. Interest shall be payable on the Bank
Series Certificates on each Distribution Date pursuant to subsection 5.6.
Calculations of per annum rates and fees under this Long Term Supplement
shall be made on the basis of (a) a 360-day year for actual days elapsed
with respect to interest payments calculated based on the LIBO Rate and (b)
a 365- (or 366-, as the case may be) day year for actual days elapsed with
respect to other interest payments and fees. Each determination of the
LIBO Rate hereunder by the Agent shall be conclusive and binding upon each
of the parties hereto in the absence of manifest error. Any change in
monthly interest payable hereunder resulting from a change in the Base Rate
shall become effective as of the opening of business on the day on which
such change is announced.
SECTION 3.5. Indemnification by Seller. The Seller hereby
agrees to pay, and to indemnify and hold harmless, the Administrative
Agent, the Agent, each Bank Series Certificateholder and the Trustee and
each officer, director and employee thereof from (a) all claims, disputes,
damages, penalties and losses arising from the Receivables or the
underlying collateral (including any product warranty-related claims, but
excluding credit losses), (b) any taxes which may at any time be asserted
in respect of this transaction or the subject matter thereof (including,
without limitation, any sales, gross receipts, general corporation,
personal property, privilege or license taxes, but not including taxes
imposed upon the Agent, the Administrative Agent, any such Bank Series
Certificateholder or the Trustee with respect to its income arising out of
this transaction and imposed in any jurisdiction) and (c) costs, expenses
and reasonable counsel fees in defending against the same, whether arising
by reason of the acts to be performed by the Seller or the Servicer
hereunder or imposed against the Agent, the Administrative Agent, any Bank
Series Certificateholder, the Trustee or any officer, director or employee
thereof, or the Seller, the property involved or otherwise.
Notwithstanding any provision of this Long Term Supplement to the contrary,
any amounts payable by the Seller pursuant to this Section 3.5 shall be
paid by the Seller only to the extent of Excess Servicing available to the
Seller pursuant to Section 5.9(b)(ii).
SECTION 3.6. Pro Rata Payments. All payments to be made by the
Bank Series Certificateholders pursuant to this Long Term Supplement shall
be made by each Bank Series Certificateholder of record on such date, pro
rata, based upon the Commitment Percentage of such Bank Series
Certificateholder.
SECTION 3.7. Changes in Bank Group. Any "Bank" which becomes a
party to the Long Term RPA pursuant to subsection 2.9 thereof shall become
a Long Term Bank Series Certificateholder party hereto by executing a New
Bank Supplement in accordance with said subsection 2.9. Any Long Term Bank
Series Certificateholder which increases its Long Term Commitment pursuant
to subsection 2.9 of the Long Term RPA shall execute a Long Term Commitment
Increase Supplement in accordance with said subsection 2.9. Upon receipt
of a copy of any such Supplement, the Seller shall execute, and the Trustee
shall authenticate, a Long Term Bank Series Certificate for such new Long
Term Bank Series Certificateholder or such Long Term Bank Series
Certificateholder which increases its Long Term Commitment, provided that
any Long Term Bank Series Certificateholder increasing its Long Term
Commitment shall surrender its Long Term Bank Series Certificate to the
Trustee or provide the Trustee with a certificate of a responsible officer
of such Long Term Bank Series Certificateholder that such Long Term Bank
Series Certificate has been stolen, lost or destroyed and provide the
Trustee with such security or indemnity as may be required by it to save it
harmless.
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation. The monthly servicing fee
(the "Monthly Servicing Fee") shall be payable to the Servicer, in arrears,
on each Distribution Date in respect of any Collection Period (or portion
thereof) occurring prior to the earlier of the first Distribution Date
following the Termination Date and the first Distribution Date on which the
Invested Amount is zero, in an amount equal to one-twelfth of the product
of (a) the Servicing Fee Rate, (b) the Pool Balance as of the last day of
the Collection Period second preceding such Distribution Date and (c) the
Bank Series Allocation Percentage with respect to the immediately preceding
Collection Period. The share of the Monthly Servicing Fee allocable to the
Bank Series Certificateholders with respect to any Distribution Date (the
"Certificateholders Monthly Servicing Fee") shall be equal to one-twelfth
of the product of (a) the Servicing Fee Rate and (b) the Aggregate Bank
Invested Amount as of the last day of the Collection Period second
preceding such Distribution Date. The remainder of the Monthly Servicing
Fee shall be paid by the Seller and in no event shall the Trust, the
Trustee or the Bank Series Certificateholders be liable for the share of
the Monthly Servicing Fee to be paid by the Seller; and the remainder of
the Servicing Fee shall be paid by the Seller and the Investor
Certificateholders of other Series and the Bank Series Certificateholders
shall in no event be liable for the share of the Servicing Fee to be paid
by the Seller or the Investor Certificateholders of other Series. The
Certificateholders Monthly Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for distribution in accordance
with the terms of this Long Term Supplement.
ARTICLE V
Rights of Bank Series Certificateholders and
Allocation and Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections. (a) Collections of
Non-Principal Receivables and Principal Receivables, Miscellaneous Payments
and Defaulted Amounts allocated to Bank Series pursuant to Article IV of
the Wholesale PSA shall be allocated and distributed as set forth in this
Article.
(b) The Servicer shall instruct the Trustee to withdraw from the
Collection Account and pay to the Seller on the dates set forth below the
following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Non-Principal
Collections deposited in the Collection Account for such Deposit
Date; and
(B) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Principal Collections
deposited in the Collection Account for such Deposit Date, if the
Seller's Participation Amount (determined after giving effect to
any Principal Receivables transferred to the Trust on such
Deposit Date) exceeds the Trust Available Subordinated Amount for
the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date immediately following such
Determination Date); and
(ii) on each Deposit Date with respect to the Revolving Period,
an amount equal to the Available Seller's Principal Collections for
such Deposit Date, if the Seller's Participation Amount (determined
after giving effect to any Principal Receivables transferred to the
Trust on such Deposit Date) exceeds the Trust Available Subordinated
Amount for the immediately preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such
Determination Date); provided, however, that Available Seller's
Principal Collections shall be paid to the Seller with respect to any
Collection Period only after an amount equal to the sum of (A) the
Deficiency Amount, if any, relating to the immediately preceding
Collection Period and (B) the excess, if any, of the Reserve Account
Required Amount over the amount in the Reserve Account on the
immediately preceding Distribution Date (after giving effect to the
allocations of, distributions from, and deposits in, the Reserve
Account on such Distribution Date), has been deposited in the
Collection Account for the benefit of the Bank Series from such
Available Seller's Principal Collections.
The withdrawals to be made from the Collection Account pursuant
to this Section 5.1(b) do not apply to deposits into the Collection Account
that do not represent Collections, including Miscellaneous Payments,
payment of the purchase price for the Certificateholders' Interest pursuant
to Section 2.03 of the Wholesale PSA, payment of the purchase price for the
Bank Series Certificateholders Interest pursuant to Section 9.1 of this
Long Term Supplement and proceeds from the sale, disposition or liquidation
of Receivables pursuant to Section 9.02 or 12.02 of the Wholesale PSA.
(c) The Servicer shall instruct the Trustee to withdraw from the
Collection Account and deposit into the Reserve Account on Deposit Dates
with respect to the Revolving Period Available Seller's Principal
Collections for such Deposit Date, up to the amount of the excess, if any,
determined pursuant to Section 5.1(b)(ii)(B).
SECTION 5.2. Determination of Monthly Interest. (a)(i) The
amount of monthly interest ("Monthly Interest") with respect to the Bank
Series Certificates on any Distribution Date shall be an amount equal to
the sum of (A) with respect to that portion of the Aggregate Bank Invested
Amount allocated to the LIBO Tranche, an amount equal to the product of (I)
the number of days in the preceding Accrual Period divided by 360, (II) the
sum of the LIBO Rate applicable to the LIBO Tranche for the Accrual Period
with respect to such Distribution Date and the Eurodollar Margin, and (III)
the portion of the Aggregate Bank Invested Amount allocable to the LIBO
Tranche as of the close of business on the preceding Distribution Date
(after giving effect to all distributions of Monthly Principal on such
preceding Distribution Date) and (B) with respect to that portion of the
Aggregate Bank Invested Amount not allocated to the LIBO Tranche, an amount
("Monthly Base Rate Interest") equal to the sum of each Daily Base Rate
Interest Expense determined by the Administrative Agent for each day of the
Accrual Period with respect to such Distribution Date, provided, however,
if any Increase shall be made during the period from and including the
first calendar day of any month to but excluding the Distribution Date
occurring during such month, the amount of Daily Base Rate Interest Expense
calculated with respect to such Increase during such period shall not be
included in the Monthly Interest determined for the Accrual Period with
respect to such Distribution Date, but instead shall be included in the
Monthly Interest determined for the Accrual Period with respect to the next
succeeding Distribution Date.
(ii) In the event the Base Rate changes during the period between
any Determination Date and the following Distribution Date and a portion of
the Aggregate Bank Invested Amount is not allocated to the LIBO Tranche,
the Servicer and the Administrative Agent shall cooperate on the date of
such change in modifying the Distribution Date Statement to reflect the
adjustment in the Monthly Interest for the then current Accrual Period
caused by such change and any consequent adjustments, including adjustment
to the Deficiency Amount, if any. Any such modification, including any
adjustment to the Deficiency Amount shall be completed by 10:00 a.m. on
such Distribution Date.
(b) On the Determination Date preceding each Distribution Date,
the Servicer shall determine the amount, if any (the "Interest Shortfall"),
by which (i) the Monthly Interest for the Accrual Period with respect to
such Distribution Date is greater than (ii) the amount which will be
available to be distributed to the Bank Series Certificateholders on such
Distribution Date in respect thereof pursuant to this Long Term Supplement.
If the Interest Shortfall with respect to any Distribution Date is greater
than zero, an additional amount ("Additional Interest") equal to the
product of (A) the number of days in the related Accrual Period divided by
365 (or 366, as determined in accordance with subsection 3.4), (B) the
Default Rate and (C) such Interest Shortfall (or the portion thereof which
has not been paid to the Bank Series Certificateholders) shall be payable
as provided herein with respect to the Bank Series Certificates on each
Distribution Date following such Distribution Date to and including, the
Distribution Date on which such Interest Shortfall is paid to Bank Series
Certificateholders. Notwithstanding anything to the contrary herein,
Additional Interest shall be payable or distributed to the Bank Series
Certificateholders only to the extent permitted by applicable law.
(c) On each Distribution Date the Seller may, subject to
subsection 5.2(d), elect to allocate or continue to allocate all or any
part of the Aggregate Bank Invested Amount to the LIBO Tranche by giving
the Administrative Agent irrevocable written or telephonic (confirmed in
writing) notice thereof, which notice must be received by the
Administrative Agent prior to 12:00 Noon (New York City time) three
Business Days prior to such Distribution Date. Such notice shall specify
(i) the applicable Distribution Date, (ii) the date of the succeeding
Distribution Date and (iii) the portion of the Aggregate Bank Invested
Amount being allocated to the LIBO Tranche. Promptly upon receipt of each
such notice the Administrative Agent shall notify each Bank Series
Certificateholder of the contents thereof. If the Administrative Agent
shall not have received timely notice as aforesaid with respect to all or
any portion of the Aggregate Bank Invested Amount, the Monthly Interest on
the Aggregate Bank Invested Amount for the succeeding Accrual Period shall
be calculated by reference to the Base Rate.
(d) Anything contained in this Section 5.2 to the contrary
notwithstanding, (i) the portion of the Aggregate Bank Invested Amount
allocable to the LIBO Tranche must be an amount equal to $50,000,000 or an
integral multiple of $1,000,000 in excess thereof and (ii) after the
occurrence and during the continuance of any Early Amortization Event, the
Seller may not elect to allocate all or any portion of the Aggregate Bank
Invested Amount to the LIBO Tranche.
SECTION 5.3. Determination of Monthly Principal. The amount of
monthly principal ("Monthly Principal") distributable with respect to the
Bank Series Certificates on each Distribution Date with respect to an Early
Amortization Period shall be equal to the sum of (i) the Available Bank
Principal Collections with respect to such Distribution Date and (ii) the
Available Seller's Principal Collections allocated pursuant to subsection
5.7(d)(ii); provided, however, that Monthly Principal shall not exceed the
Aggregate Bank Invested Amount.
SECTION 5.4. Establishment of Reserve Account. The Servicer,
for the benefit of the Bank Series Certificateholders, shall cause to be
established and maintained in the name of the Trust an Eligible Deposit
Account (the "Reserve Account") bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Bank
Series Certificateholders. On the Effective Date, the Seller shall cause
to be deposited in the Reserve Account the Initial Reserve Account Deposit
Amount. The Trustee shall possess all right, title and interest in all
funds from time to time on deposit in, and all Eligible Investments
credited to, the Reserve Account and in all proceeds thereof. The Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Bank Series Certificateholders. If, at any time, the
Reserve Account ceases to be an Eligible Deposit Account, the Servicer
shall establish a substitute Eligible Deposit Account as the Reserve
Account, transfer any cash and/or any Eligible Investments to such new
Reserve Account and from the date any such substitute account is
established, such account shall be the "Reserve Account". Neither the
Seller nor the Servicer, nor any person or entity claiming by, through or
under the Seller or Servicer, shall have any right, title or interest in,
or any right to withdraw any amount from, the Reserve Account, except as
expressly provided herein. Pursuant to the authority granted to the
Servicer in Section 3.01 of the Wholesale PSA, the Servicer shall have the
power, revocable by the Trustee, to instruct the Trustee to make
withdrawals and payments from the Reserve Account for the purposes of
carrying out the Servicer's or the Trustee's duties specified in the
Wholesale PSA and this Long Term Supplement.
All Eligible Investments in the Reserve Account shall be held by
the Trustee for the benefit of the Bank Series Certificateholders. Funds
on deposit in the Reserve Account shall at the direction of the Servicer be
invested by the Trustee solely in Eligible Investments that will mature so
that such funds will be available at the close of business on or before the
Business Day next preceding the following Distribution Date (or on or
before 10:00 a.m. on such following Distribution Date in the case of
Eligible Investments in respect of which the Trustee is the obligor). As
of each Determination Date, all interest and other investment earnings (net
of losses and investment expenses) on funds on deposit in the Reserve
Account received with respect to such Determination Date shall be credited
to the Collection Account for the benefit of the Bank Series (together with
earnings on the Pre-Accrual Period Deposit and an amount equal to the Bank
Series Allocation Percentage of the interest and other investment earnings
on funds held in the Collection Account credited to the Collection Account
pursuant to Section 4.02 of the Wholesale PSA with respect to such
Determination Date, "Investment Proceeds"). Schedule 1, which is hereby
incorporated into and made part of this Long Term Supplement, identifies
the Reserve Account by setting forth the account number of such account,
the account designation of such account and the name of the institution
with which such account has been established. If a substitute Reserve
Account is established pursuant to this Section, the Servicer shall provide
to the Trustee an amended Schedule 1, setting forth the relevant
information for such substitute Reserve Account.
SECTION 5.5. Deficiency Amount. With respect to each
Distribution Date, on the related Determination Date, the Servicer shall
determine the amount (the "Deficiency Amount"), if any, by which (a) the
sum of (i) Monthly Interest for such Distribution Date, (ii) any Monthly
Interest previously due but not distributed to the Bank Series
Certificateholders on a prior Distribution Date, (iii) Additional Interest,
if any, for such Distribution Date and any Additional Interest previously
due but not distributed to the Bank Series Certificateholders on a prior
Distribution Date, (iv) the Certificateholders Monthly Servicing Fee for
such Distribution Date, (v) the Investor Default Amount, if any, for such
Distribution Date, (vi) the amount of Investor Charge-Offs which have not
previously been reimbursed, (vii) the Bank Series Allocation Percentage of
the amount of any Adjustment Payment required to be deposited in the
Collection Account pursuant to Section 3.09(a) of the Wholesale PSA with
respect to the related Collection Period that has not been so deposited as
of such Determination Date and (viii) any Section 8 Costs, exceeds (b) the
sum of (i) Bank Non-Principal Collections and Available Seller
Non-Principal Collections deposited in the Collection Account during the
Collection Period preceding such Distribution Date plus any Investment
Proceeds plus any Pre-Accrual Period Deposit made during the Accrual Period
preceding the Accrual Period with respect to such Distribution Date plus
(ii) the amount of funds in the Reserve Account which are available
pursuant to Section 5.7(a) to cover any portion of the Deficiency Amount.
The lesser of the Deficiency Amount and the Available Subordinated Amount
on the related Determination Date shall be the "Required Subordination Draw
Amount".
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller Non-Principal Collections, and Available Bank Principal
Collections. The Servicer shall cause the Trustee to apply, on each
Distribution Date, Bank Non-Principal Collections, Available Seller
Non-Principal Collections, Investment Proceeds and Available Bank Principal
Collections to make the following distributions:
(a) On each Distribution Date, an amount equal to the sum of
Bank Non-Principal Collections, Available Seller Non-Principal
Collections and any Investment Proceeds will with respect to the
preceding Collection Period and any Pre-Accrual Period Deposit made
during the Accrual Period preceding the Accrual Period with respect to
such Distribution Date be distributed in the following priority:
(i) an amount equal to Monthly Interest for such
Distribution Date, plus the amount of any Monthly Interest
previously due but not distributed to the Bank Series
Certificateholders on a prior Distribution Date, plus the amount
of any Additional Interest for such Distribution Date and any
Additional Interest previously due but not distributed to the
Bank Series Certificateholders on a prior Distribution Date,
shall be distributed to the Bank Series Certificateholders;
(ii) an amount equal to the Certificateholders Monthly
Servicing Fee for such Distribution Date shall be distributed to
the Servicer;
(iii) an amount equal to the Investor Default Amount for such
Distribution Date shall be treated as a portion of Bank Principal
Collections for such Distribution Date;
(iv) an amount equal to the aggregate amount of Investor
Charge-Offs which have not previously been reimbursed shall be
treated as a portion of Bank Principal Collections for such
Distribution Date;
(v) an amount equal to the sum of (A) Section 8 Costs for
such Distribution Date and (B) any Section 8 Costs not paid on
any preceding Distribution Date shall be paid to the Agent for
the account of the applicable Bank Series Certificateholders; and
(vi) the balance, if any, shall constitute Excess Servicing
and shall be allocated and distributed as set forth in Section
5.9.
(b) (i) On each Distribution Date during the Revolving Period
with respect to which the Seller has notified the Administrative Agent
a Decrease will occur, an amount of Available Bank Principal
Collections deposited in the Collection Account for the related
Collection Period equal to such Decrease will be distributed to the
Administrative Agent for the ratable benefit of the Bank Series
Certificateholders. The Aggregate Bank Invested Amount shall be
reduced by the amount of Available Bank Principal Collections so
distributed. Any such remaining Available Bank Principal Collections
shall be treated as Excess Principal Collections and applied in
accordance with Section 4.04 of the Wholesale PSA.
(ii) On each Distribution Date during the Revolving Period
with respect to which the Servicer has not notified the Administrative
Agent it will be making a Decrease, an amount equal to Available Bank
Principal Collections deposited in the Collection Account for the
related Collection Period shall be treated as Excess Principal
Collections and applied in accordance with Section 4.04 of the
Wholesale PSA.
(c) On each Distribution Date with respect to an Early
Amortization Period, an amount equal to the sum of (i) Available Bank
Principal Collections and (ii) Available Seller's Principal
Collections allocated pursuant to subsection 5.7(d)(ii) will be
distributed in the following priority: (i) an amount equal to Monthly
Principal for such Distribution Date shall be distributed to the
Administrative Agent for the ratable benefit of the Bank Series
Certificateholders and (ii) after giving effect to the distribution
referred to in clause (i), an amount equal to the balance, if any, of
such Available Bank Principal Collections shall be treated as Excess
Principal Collections and applied in accordance with Section 4.04 of
the Wholesale PSA.
SECTION 5.7. Application of Reserve Account and Available
Subordinated Amount. (a) If the portion of Bank Non-Principal
Collections, Available Seller's Non-Principal Collections, any Pre-Accrual
Period Deposit and Investment Proceeds allocated to the Bank Series
Certificateholders on any Distribution Date pursuant to Section 5.6(a) is
not sufficient to make the entire distributions required on such
Distribution Date by Section 5.6(a)(i) through (v), the Servicer shall
cause the Trustee to withdraw funds from the Reserve Account to the extent
available therein, and apply such funds to complete the distributions
pursuant to Section 5.6(a)(i) through (v).
(b) If there is a Required Subordination Draw Amount for such
Distribution Date, the Servicer shall apply or cause the Trustee to apply
the Available Seller's Principal Collections on deposit in the Collection
Account on such Distribution Date, but only up to the amount of the
Required Subordination Draw Amount, to make the distributions required by
Section 5.6(a)(i) through (v) that have not been made through the
application of funds from the Reserve Account in accordance with the
preceding paragraph. Any such Available Seller's Principal Collections
remaining after the application thereof pursuant to the preceding sentence
shall be treated as a portion of Bank Principal Collections for such
Distribution Date, but only up to the amount of unpaid Adjustment Payments
allocated to the Bank Series as described in Section 5.5(a)(vii). The
amount of the Available Seller's Principal Collections applied in
accordance with the two preceding sentences shall reduce the Available
Subordinated Amount as described in clause (c) of the definition thereof.
If the Required Subordination Draw Amount exceeds Available Seller's
Principal Collections for such Distribution Date, the Available
Subordinated Amount shall be further reduced by the amount of such excess,
but not by more than the sum of (x) the Investor Default Amount and (y) the
amount of unpaid Adjustment Payments allocated to the Bank Series as
described in Section 5.5(a)(vii).
(c) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Account made pursuant to Section 13.2,
Sections 5.1(c), 5.4, and Section 5.7(a) and (d), (i) during the Revolving
Period, the amount in the Reserve Account is greater than the Reserve
Account Required Amount for the related Distribution Date, the Servicer
shall cause the Trustee to distribute such excess amount to the Seller;
provided that the Seller's Participation Amount (determined after giving
effect to any Principal Receivables transferred to the Trust on such
Distribution Date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date or (ii) the amount in the Reserve
Account is less than such Reserve Account Required Amount, then the Trustee
shall deposit any remaining Available Seller's Principal Collections on
deposit in the Collection Account for such Distribution Date into the
Reserve Account until either (x) the amount in the Reserve Account is equal
to such Reserve Account Required Amount (and the Available Subordinated
Amount shall be reduced by the amount of Available Seller's Principal
Collections so applied) or (y) the Available Subordinated Amount shall have
been reduced to the Required Available Subordinated Amount. On the
Termination Date, any funds in the Reserve Account will be treated as
Available Bank Principal Collections. After the earlier of the payment in
full of the Aggregate Bank Invested Amount and the Termination Date, any
funds remaining on deposit in the Reserve Account shall be paid to the
Seller.
(d) The balance of Available Seller's Principal Collections on
any Distribution Date, after giving effect to any distributions thereof
pursuant to paragraph (b) of this Section 5.7 shall (i) during the
Revolving Period, be distributed to the Seller; provided that the Seller's
Participation Amount (determined after giving effect to any Principal
Receivables transferred to the Trust on such Distribution Date) exceeds the
Trust Available Subordinated Amount for the immediately preceding
Determination Date and (ii) during an Early Amortization Period, be treated
as a portion of Bank Principal Collections and distributed pursuant to
Section 5.6(c).
SECTION 5.8. Investor Charge-offs. If, on any Distribution Date
on which the Available Subordinated Amount on the preceding Determination
Date (after giving effect to the allocations, distributions, withdrawals
and deposits to be made on such Distribution Date) is zero and the
Deficiency Amount for such Distribution Date is greater than zero, the
Aggregate Bank Invested Amount shall be reduced by the amount of the excess
of such Deficiency Amount over any remaining Available Subordinated Amount
on such Determination Date, but not by more than the Investor Default
Amount. Investor Charge-Offs shall thereafter be reimbursed and the
Aggregate Bank Invested Amount increased (but not by an amount in excess of
the aggregate Investor Charge-Offs) on any Distribution Date by the sum of
(a) Allocable Miscellaneous Payments with respect to such Distribution Date
and (b) any amounts allocated and available for that purpose pursuant to
Section 5.6(a)(iv).
SECTION 5.9. Excess Servicing. The Servicer shall cause the
Trustee to apply, on each Distribution Date, Excess Servicing with respect
to such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the Reserve Account Deposit Amount (after
giving effect to any application of Available Seller's Principal
Collections pursuant to Section 5.7(b)) for such Distribution Date
shall be deposited in the Reserve Account; and
(b) the balance, if any, (i) for any Distribution Date during an
Early Amortization Period, shall be treated as a portion of Bank
Principal Collections and (ii) for any Distribution Date during the
Revolving Period, shall be distributed to the Seller.
SECTION 5.10. Excess Principal Collections. That portion of
Excess Principal Collections for any Distribution Date equal to the amount
of Bank Series Allocable Excess Principal Collections for such Distribution
Date will be allocated to the Bank Series and will be distributed as set
forth in this Long Term Supplement.
ARTICLE VI
Distributions and Reports
SECTION 6.1. Distributions. (a) On each Distribution Date with
respect to a Collection Period during which the Aggregate Bank Invested
Amount was greater than zero at any time, at the direction of the Servicer
the Trustee shall distribute to the Administrative Agent on behalf of each
Bank Series Certificateholder of record on the preceding Record Date (other
than as provided in Section 12.02 of the Wholesale PSA respecting a final
distribution) all amounts specified in Article V and promptly thereafter
the Administrative Agent shall make available to each Bank Series
Certificateholder pursuant to subsection 2.7 of the Long Term RPA an amount
equal to the product of (i) the amount to be distributed to the Bank Series
Certificateholders pursuant to Article V and (ii) such Bank Series
Certificateholder's Commitment Percentage.
(b) All allocations and distributions hereunder shall be in
accordance with the Distribution Date Statement delivered by the Servicer
to the Trustee pursuant to subsection 6.3 and shall be made in lawful money
of the United States and in immediately available funds.
(c) The final distribution on the Bank Series Certificates will
be made only upon presentation and surrender of the Bank Series
Certificates by the Administrative Agent to the Trustee. Each Bank Series
Certificateholder agrees to deliver, on or prior to the scheduled date of
such distribution, its Bank Series Certificate to the Administrative Agent
for presentation and surrender to the Trustee pursuant to the preceding
sentence.
SECTION 6.2. Daily Reports. On each Business Day when the
Aggregate Bank Invested Amount is greater than zero, the Servicer shall
provide the Administrative Agent and the Trustee with a Daily Report. The
Administrative Agent shall make copies of the Daily Report available to the
Bank Series Certificateholders at their reasonable request at the
Administrative Agent's office in New York City.
SECTION 6.3. Periodic Reports. (a) Distribution Date
Statements. On each Determination Date with respect to a Collection Period
during which the Aggregate Bank Invested Amount was greater than zero at
any time, the Servicer shall deliver to the Trustee and the Administrative
Agent a Distribution Date Statement. The Trustee shall be entitled to rely
on each Distribution Date Statement to determine the Aggregate Bank
Invested Amount. The Administrative Agent shall forward a copy of each
such Distribution Date Statement to any Bank Series Certificateholder upon
request by such Bank Series Certificateholder.
(b) Monthly Certificateholders' Statement. On each Distribution
Date with respect to a Collection Period during which the Aggregate Bank
Invested Amount was greater than zero at any time, the Servicer shall
deliver to the Trustee and the Administrative Agent, and the Administrative
Agent shall forward to each Bank Series Certificateholder, a Monthly
Certificateholders' Statement.
(c) Annual Certificateholders' Tax Statement. On or before
January 31 of each calendar year (or such earlier date as required by
applicable law) following a calendar year during which the Aggregate Bank
Invested Amount was greater than zero at any time, the Servicer on behalf
of the Trustee shall furnish, or cause to be furnished, to each Person who
at any time during the preceding calendar year was a Bank Series
Certificateholder, a statement prepared by the Servicer containing the
aggregate amount distributed to such Person for such calendar year or the
applicable portion thereof during which such Person was a Bank Series
Certificateholder, together with such other information as is required to
be provided by an issuer of indebtedness under the Internal Revenue Code
and such other customary information as the Trustee or the Servicer deems
necessary or desirable to enable the Bank Series Certificateholders to
prepare their tax returns. Such obligation of the Servicer shall be deemed
to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements
of the Internal Revenue Code as from time to time in effect.
(d) Early Amortization Period Notices. Upon the occurrence of
an Early Amortization Event, the Seller or the Servicer, as the case may
be, shall give prompt written notice thereof to the Trustee and the
Administrative Agent. The Administrative Agent shall give notice thereof
to each Bank Series Certificateholder. In addition, the Servicer shall
give the Administrative Agent written notice of the occurrence and nature
of an Early Amortization Event with respect to any other series which is
not an Early Amortization Event with respect to the Bank Series.
ARTICLE VII
Additional Early Amortization Events
SECTION 7.1. Additional Early Amortization Events.
The occurrence of any of the following events shall, immediately upon the
occurrence thereof without notice or other action on the part of the
Trustee or the Bank Series Certificateholders, be deemed to be an Early
Amortization Event solely with respect to Bank Series:
(a) on any Determination Date, the ratio of (i) the aggregate
Allocable Defaulted Amount for the three preceding Collection Periods
to (ii) the aggregate Allocable Principal Collections deposited in the
Collection Account for the three preceding Collection Periods exceeds
.75%;
(b) on any Determination Date, the Available Subordinated Amount
(after giving effect to all reductions with respect thereto on the
related Distribution Date) will be reduced to less than the Required
Available Subordinated Amount;
(c) any Service Default with respect to the Bank Series occurs;
(d) on any Determination Date, as of the last day of the
Collection Period with respect thereto, the aggregate amount of
Principal Receivables relating to used Vehicles exceeds 20% of the
Pool Balance on such day;
(e) on any six consecutive Distribution Dates any Interest
Coverage Shortfall exists;
(f) failure on the part of the Seller, the Servicer or CCC, as
applicable, to deliver any Daily Report or Monthly Certificateholders'
Statement within five Business Days of the date such report or
statement must be delivered hereunder;
(g) on any four consecutive Distribution Dates both (i) any
Interest Coverage Shortfall exists and (ii) the amount on deposit in
the Reserve Account is less than the Reserve Account Trigger Amount;
(h) on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods is less than
20%; and
(i) any Commitment Termination Event occurs or the Long Term
Commitments shall terminate.
SECTION 7.2. Notice of Early Amortization Event. The Trustee
shall not be deemed to have knowledge of the occurrence of any Early
Amortization Event unless the Trustee shall have received written notice
describing such Early Amortization Event and stating that such notice is a
"notice of Early Amortization Event."
ARTICLE VIII
Change In Circumstances
SECTION 8.1. Reemployment Costs. The Seller agrees to indemnify
each Bank Series Certificateholder and to hold each Bank Series
Certificateholder harmless from any loss or expense, including any such
loss or expense arising from interest or fees payable by such Bank Series
Certificateholder to lenders of funds obtained by it to purchase or
maintain that portion of its Bank Invested Amount hereunder with respect to
which Monthly Interest is determined by reference to the LIBO Rate as a
consequence of (a) default by the Seller in the performance of its
obligations hereunder or under the Wholesale PSA, (b) the occurrence of a
Service Default or an event which would, with the giving of notice or the
passage of time, constitute a Service Default, (c) the occurrence of an
event referred to in Section 8.2 or 8.3, (d) default by the Seller in
selling an Increase in the Aggregate Bank Invested Amount on an Increase
Date after having given notice of such Increase, or (e) any reduction of
the LIBO Tranche prior to the termination of the Accrual Period for such
LIBO Tranche. A certificate as to any additional amounts payable pursuant
to the foregoing sentence submitted by any Bank Series Certificateholder to
the Seller shall be conclusive absent manifest error. This covenant shall
survive termination of this Long Term Supplement and the Wholesale PSA.
SECTION 8.2. Inability to Determine LIBO Rate. In the event
that (a) the Agent determines (which determination shall be conclusive and
binding upon the Bank Series Certificateholders) that quotations of
interest rates for the relevant deposits referred to in the definition of
"LIBO Rate" are not being provided in the relevant amounts or for the
relevant maturities for the purposes of determining rates of interest for
the LIBO Tranche hereunder as provided herein, or (b) the Required Bank
Series Certificateholders determine (which determination shall be
conclusive and binding upon the Bank Series Certificateholders) and shall
notify the Agent that the rates of interest referred to in the definition
of "LIBO Rate" as the basis upon which the rate of interest for the LIBO
Tranche hereunder is to be determined do not adequately cover the cost to
the Bank Series Certificateholders of making or maintaining their
investments in Bank Series Certificates at such time as any of the
Aggregate Bank Invested Amount is allocated to the LIBO Tranche, the Agent
shall forthwith give telex or telecopy notice of such determination,
confirmed in writing, to the Seller and the Trustee, whereupon until the
Agent notifies the Seller and the Trustee that the circumstances giving
rise to such notice no longer exist, none of the Aggregate Bank Invested
Amount shall be allocated to the LIBO Tranche.
SECTION 8.3. Illegality. Notwithstanding any other provision
herein, if any law, regulation, treaty or directive , or any change therein
or in the interpretation or application thereof, shall make it unlawful for
any Bank Series Certificateholder to purchase or maintain its interest in
its Bank Series Certificate in any LIBO Tranche and such Bank Series
Certificateholder shall notify the Administrative Agent, the Agent, the
Trustee and the Seller, then interest payable in respect of the portion of
each LIBO Tranche applicable to such Bank Series Certificateholder shall
thereafter be calculated by reference to the Base Rate. If any such change
in the method of calculating interest occurs on a day which is not the last
day of the Accrual Period with respect to any LIBO Tranche, the Seller
shall pay to the Agent for the account of such Bank Series
Certificateholder the amounts, if any, as may be required pursuant to
Section 8.1.
SECTION 8.4. Increased Costs. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Bank Series
Certificateholder with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority enacted
or made subsequent to the date hereof:
(A) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank Series
Certificateholder; or
(B) does or shall impose on such Bank Series Certificateholder
any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
Series Certificateholder of purchasing or maintaining its portion of the
Bank Series Certificateholders' Interest hereunder (such increase in cost,
"Increased Costs"), then, in any such case, the Seller shall promptly pay
to the Agent for the account of such Bank Series Certificateholder, upon
the written demand of such Bank Series Certificateholder to the Seller
(with a copy to the Agent), so long as such Increased Costs are not
otherwise included in the amounts required to be paid to such Bank Series
Certificateholder pursuant to any other paragraph under this Section 8, any
additional amounts necessary to compensate such Bank Series
Certificateholder for such Increased Costs which such Bank Series
Certificateholder deems to be material as determined by such Bank Series
Certificateholder. If a Bank Series Certificateholder becomes entitled to
claim any additional amounts pursuant to this Section 8.4, it shall
promptly notify the Seller, through the Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by a Bank
Series Certificateholder, through the Agent, to the Seller shall be
conclusive in the absence of manifest error.
(b) Upon the occurrence of any of the events specified in
subsections 8.3 or 8.4(a), each Bank Series Certificateholder whose Long
Term Commitments are affected by any such event agrees that it will
transfer such Long Term Commitments affected by any such event to another
branch office (or, if such Bank Series Certificateholder so elects, to an
Affiliate) of such Bank Series Certificateholder, provided that such
transfer shall be made only if such Bank Series Certificateholder shall
have determined in good faith (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) that, (a) on the
basis of then existing circumstances, such transfer will avoid such events
and will not result in any additional costs, liabilities or expenses to
such Bank Series Certificateholder, to the Seller or to the Trust and (b)
such transfer is otherwise consistent with the interests of such Bank
Series Certificateholder.
SECTION 8.5. Changes in Capital Requirements. (i) In the event
that, in the opinion of counsel for any Bank Series Certificateholder
(which may, in the discretion of such Bank Series Certificateholder, be
such Bank Series Certificateholder's internal counsel), compliance with any
law, rule, regulation or guideline, or any change therein or in the
interpretation or application thereof or compliance by any Bank Series
Certificateholder with any request or directive (whether or not having the
force of law) from any central bank or Governmental Authority enacted or
made subsequent to the date hereof shall affect the amount of capital
required or expected to be maintained by such Bank Series Certificateholder
or any corporation controlling such Bank Series Certificateholder and the
amount of such capital that is required or expected to be maintained is
increased by or based upon the Long Term Commitments of such Bank Series
Certificateholder under this Long Term Supplement or the Wholesale PSA or
any participation agreement entered into pursuant to subsection 9.6 of the
Long Term RPA, as applicable (such event, a "Change in Law"), such affected
Bank Series Certificateholder shall notify the Seller and the Agent within
90 days after such affected Bank Series Certificateholder shall first be
required to comply with such Change in Law. At the time of such
notification such affected Bank Series Certificateholder shall provide the
Seller with a written statement setting forth the amount that would
adequately compensate such affected Bank Series Certificateholder for the
costs associated with its compliance with such Change in Law and setting
forth in reasonable detail the assumptions upon which such affected Bank
Series Certificateholder calculated such amount, and a copy of the opinion
of counsel referred to in the preceding sentence. Such affected Bank
Series Certificateholder shall allocate to the Seller the costs associated
with such Change in Law in such a way that the proportion of (i) such costs
that are allocated to the Seller to (ii) the total of such costs of such
affected Bank Series Certificateholder associated with such Change in Law
as it relates to all commitments of such Bank Series Certificateholder to
its customers of similar creditworthiness as the Seller, is substantially
the same as the proportion of (i) the aggregate Long Term Commitments of
such affected Bank Series Certificateholder under this Long Term Supplement
or the Wholesale PSA or such participation agreement to (ii) the total of
all commitments by such affected Bank Series Certificateholder to its
customers of similar creditworthiness as the Seller.
(ii) Upon the occurrence of any Change in Law, each Bank Series
Certificateholder whose Long Term Commitment hereunder is affected by such
Change in Law shall transfer its Long Term Commitment to another branch
office (or, if such Bank Series Certificateholder so elects, to an
Affiliate) of such Bank Series Certificateholder, provided that such
transfer shall be made only if such Bank Series Certificateholder shall
have determined in good faith (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) that, (i) on the
basis of then existing circumstances, such transfer will avoid or reduce
the additional payments resulting from such Change in Law and will not
result in any additional costs, liabilities or expenses to such Bank Series
Certificateholder (unless the Seller agrees to pay such additional costs,
liabilities or expenses of such Bank Series Certificateholder), the Seller
or the Trust and (ii) such transfer is otherwise consistent with the
interests of such Bank Series Certificateholder.
SECTION 8.6. Taxes. (a) In the event that the adoption of any
law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, in each case after the date hereof,
shall require any Taxes (as hereinafter defined) to be withheld or deducted
from any amount payable to the Agent, the Administrative Agent or any Bank
Series Certificateholder under this Wholesale PSA, upon notice by such
Person to the Seller (with a copy to the Agent) to the effect that (i) as a
result of the adoption of such law, rule, regulation, treaty or directive
or a change therein or in the interpretation thereof, Taxes are being
withheld or deducted from amounts payable to such Person under this
Wholesale PSA and (ii) such Bank Series Certificateholder has taken all
action required to be taken by it to avoid the imposition of such Taxes
pursuant to clause (c) below prior to demanding indemnification under this
clause (a), the Seller will pay to the Agent for the account of such Person
additional amounts so that such additional amounts, together with amounts
otherwise payable under this Wholesale PSA, will yield to such Person,
after deduction from such increased amount of all Taxes required to be
withheld or deducted therefrom, the amount stated to be payable under this
Wholesale PSA. The term "Taxes" shall mean all net income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
imposed, levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein), excluding,
with respect to any Bank Series Certificateholder, net income and franchise
taxes imposed with respect to net income by any country (or any political
subdivision or taxing authority thereof or therein) where such Person is
organized or where such Person's credit commitments are booked. If the
Seller fails to pay any Taxes when due following notification by the Agent,
the Administrative Agent or any Bank Series Certificateholder as provided
above, the Seller shall indemnify such Person for any incremental taxes,
interest or penalties that may become payable by any such Person as a
result of any such failure by the Seller to make such payment.
(b) Each Bank Series Certificateholder that is not incorporated
under the laws of the United States of America or a state thereof agrees
that it will deliver to the Seller and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, and (ii) an Internal Revenue
Service Form W-8 or W-9 or successor form. Each such Bank Series
Certificateholder also agrees to deliver to the Seller and the Agent two
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case
may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Seller, and such
extensions or renewals thereof as may reasonably be requested by the Seller
or the Agent, unless in any such case an event (including any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank Series Certificateholder from
duly completing and delivering any such form with respect to it and such
Bank Series Certificateholder so advises the Seller and the Agent. Such
Bank Series Certificateholder shall certify (i) in the case of Form 1001 or
4224, that it is entitled to receive payments under this Wholesale PSA
without deduction or withholding of any United States federal income taxes
and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
(c) No Bank Series Certificateholder may request indemnification
for any Taxes from the Seller under clause (a) above to the extent that
such Taxes would have been avoided or reduced by such Bank Series
Certificateholder's transfer of its Long Term Commitments affected by such
event to another office of such Bank Series Certificateholder (or to an
Affiliate of such Bank Series Certificateholder), by such Bank Series
Certificateholder's properly claiming the benefit of any exemption from or
reduction of such Taxes (whether provided by statute, treaty or otherwise),
including by delivering the forms required by clause (b) above, or by such
Bank Series Certificateholder's taking any other action which in its
judgment is reasonable to avoid or reduce such Taxes, provided that such
Bank Series Certificateholder shall not be required to (i) take any action
which in the reasonable judgment of such Bank Series Certificateholder
could directly or indirectly result in any increased cost or expense or in
any loss of opportunity to such Bank Series Certificateholder unless the
Seller shall have provided to such Bank Series Certificateholder indemnity
or reimbursement therefor in form and substance reasonably satisfactory to
such Bank Series Certificateholder or (ii) claim or apply any tax credit
against such Taxes.
(d) Within 30 days after the payment by the Seller of any
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, withheld or deducted from any amount payable to
the Agent, the Administrative Agent or any Bank Series Certificateholder
under this Wholesale PSA and irrespective of whether such Person is
entitled to demand indemnification in respect thereof under clause (a)
above, the Seller will furnish to such Person (with a copy to the Agent),
the original or a certified copy of a receipt evidencing payment thereof.
SECTION 8.7. Section 8 Costs. Notwithstanding any provision of
this Long Term Supplement to the contrary, Section 8 Costs shall be paid by
the Seller only to the extent of funds available therefor pursuant to
subsection 5.6(a)(v).
ARTICLE IX
Optional Repurchase
SECTION 9.1. Optional Repurchase. (a) On any Distribution Date
occurring during an Early Amortization Period on which the Aggregate Bank
Invested Amount on such date is less than or equal to 10% of the Aggregate
Bank Invested Amount as of the last day of the Revolving Period, the Seller
shall have the option to purchase the entire Bank Series
Certificateholders' Interest, at a purchase price equal to the Reassignment
Amount for such Distribution Date.
(b) The Seller shall give the Servicer, the Administrative
Agent, the Agent and the Trustee at least three Business Days prior written
notice of the Distribution Date on which the Seller intends to exercise
such purchase option. Not later than 12:00 noon, New York City time, on
such Distribution Date the Seller shall deposit the Reassignment Amount
into the Collection Account in immediately available funds. Such purchase
option is subject to payment in full of the Reassignment Amount. The
Reassignment Amount shall be distributed as set forth in Section 10.1(b).
ARTICLE X
Final Distributions
SECTION 10.1. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Wholesale PSA; Distributions, Pursuant to Section 9.1
of this Long Term Supplement or Section 2.03 or 12.02(c) of the Wholesale
PSA. (a) The amount to be paid by the Seller with respect to Bank Series
in connection with a purchase of the Certificateholders' Interest pursuant
to Section 2.03 of the Wholesale PSA shall equal the Reassignment Amount
for the Distribution Date on which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 9.1 of this Long Term Supplement or
Section 2.03 of the Wholesale PSA or any Termination Proceeds deposited
into the Collection Account pursuant to Section 12.02(c) of the Wholesale
PSA, the Trustee shall, not later than 12:00 noon, New York City time, on
the Distribution Date on which such amounts are deposited (or, if such date
is not a Distribution Date, on the immediately following Distribution Date)
(in the priority set forth below) (i) distribute the amount deposited, up
to the Reassignment Amount, to Bank Series Certificateholders and (ii) pay
the remainder of any Termination Proceeds to the Seller.
(c) Notwithstanding anything to the contrary in this Long Term
Supplement or the Wholesale PSA, any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Wholesale PSA with respect to Bank Series.
SECTION 10.2. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to Section 9.02 of the Wholesale
PSA. (a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to Section 9.02(b) of the
Wholesale PSA, the Trustee shall (in the following priority and, in each
case, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date) deduct an amount equal to the Aggregate
Bank Invested Amount on such Distribution Date from the portion of the
Insolvency Proceeds allocated to Allocable Principal Collections and
distribute such amount to the Bank Series Certificateholders provided that
the amount of such distribution shall not exceed the product of (x) the
portion of the Insolvency Proceeds allocated to Allocable Principal
Collections and (y) 100% minus the Excess Seller's Percentage with respect
to the related Collection Period. The remainder of the portion of the
Insolvency Proceeds allocated to Allocable Principal Collections shall be
allocated to the Seller's Interest and shall be released to the Seller on
such Distribution Date.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall (in the following priority and, in
each case, after giving effect to any deposits and distributions otherwise
to be made on such Distribution Date) deduct an amount equal to the sum of
(i) Monthly Interest for such Distribution Date, (ii) any Monthly Interest
previously due but not distributed to the Bank Series Certificateholders on
a prior Distribution Date and (iii) the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest previously due
but not distributed to the Bank Series Certificateholders on a prior
Distribution Date, from the portion of the Insolvency Proceeds allocated to
Allocable Non-Principal Collections and distribute such amount to the Bank
Series Certificateholders provided that the amount of such distribution
shall not exceed (x) the product of (A) the portion of the Insolvency
Proceeds allocated to Allocable Non-Principal Collections and (B) 100%
minus the Excess Seller's Percentage. The remainder of the portion of the
Insolvency Proceeds allocated to Allocable Non-Principal Collections shall
be allocated to the Seller's Interest and shall be released to the Seller
on such Distribution Date.
(c) Notwithstanding anything to the contrary in this Long Term
Supplement or the Wholesale PSA, any distribution made pursuant to this
Section shall be deemed to be a final distribution pursuant to Section
12.02 of the Wholesale PSA with respect to Bank Series.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1. Ratification of Wholesale PSA. As supplemented by
this Long Term Supplement, the Wholesale PSA is in all respects ratified
and confirmed and the Wholesale PSA as so supplemented by this Long Term
Supplement shall be read, taken and construed as one and the same
instrument.
SECTION 11.2. Counterparts. This Long Term Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 11.3. GOVERNING LAW. THIS LONG TERM SUPPLEMENT 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 11.4. Notices. All notices, requests and demands to or
upon any of the Seller, the Servicer, the Administrative Agent, the Agent
or the Bank Series Certificateholders shall be delivered in accordance with
Section 9.2 of the Long Term RPA.
SECTION 11.5. Successors and Assigns. (a) This Long Term
Supplement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
(b) Any Bank Series Certificateholder may sell participations in
its Bank Invested Amount or sell all or a portion of its rights and
obligations hereunder in accordance with the terms hereof and Section 9.6
of the Long Term RPA.
SECTION 11.6. Physical Certificates. Section 6.08 of the
Wholesale PSA shall not apply to the Bank Series Certificates and upon
original issuance the Bank Series Certificates shall be Registered
Certificates in definitive form.
SECTION 11.7. Rights of Certificateholder. The Bank Series
Certificates represent a beneficial interest in the Trust only and do not
represent any interest in or obligation of the Seller. The Bank Series
Certificates shall not represent any interest in any Series Account or
Enhancement for the benefit of any other Series or Class. The Banks Series
Certificates represent fractional undivided interests in the Trust which
consist of the right to receive, to the extent necessary to make the
required payments with respect to the Bank Series Certificates at the times
and in the amounts specified in this Long Term Supplement, the portion of
Collections allocable to the Bank Series Certificateholders pursuant to the
Wholesale PSA and this Long Term Supplement, funds on deposit in the
Collection Account allocable to the Bank Series Certificateholders pursuant
to the Wholesale PSA and this Long Term Supplement, and funds on deposit in
the related Series Accounts.
SECTION 11.8. Certificate Transfer Restrictions. Anything to
the contrary in this Long Term Supplement, the Wholesale PSA or the Long
Term RPA notwithstanding, no Bank Series Certificate may be sold or
transferred to any Person unless (a) the Bank Series Certificate is
transferred pursuant to a valid registration statement or (b) pursuant to
an exemption from the registration requirements of the Securities Act of
1933, as amended (the "Act"), and (i) the proposed transferee shall have
furnished to the Seller, the Servicer and the Trustee an Undertaking
Letter, substantially in the form set forth in Exhibit F-1, signed by such
transferee, or (ii) if the transfer is to be made in reliance on any
exemption from the registration requirements of the Act other than Rule
144A promulgated under the Act, the proposed transferee shall have
furnished to the Seller, the Servicer and the Trustee an Undertaking
Letter, substantially in the form of Exhibit F-2, signed by such transferee
and the transferor, at its own expense, shall have provided to the Seller,
the Servicer and the Trustee an Opinion of Counsel in form reasonably
satisfactory to the Trustee with respect to the availability of such
exemption.
SECTION 11.9. Trustee's Communications. The Administrative
Agent has been designated and appointed by the Bank Series
Certificateholders pursuant to the Long Term RPA. Notwithstanding any
other provision of this Long Term Supplement to the contrary, the Trustee
shall not be obligated to communicate with or make distributions to
individual Bank Series Certificateholders, but instead shall be entitled to
deal exclusively with the Administrative Agent for the Bank Series
Certificateholders.
ARTICLE XII
COVENANTS, REPRESENTATIONS AND WARRANTIES
SECTION 12.1. Representations and Warranties of the Seller and
the Servicer. The Seller and the Servicer each hereby represents and
warrants to the Trustee, the Administrative Agent, the Agent and each of
the Bank Series Certificateholders that each and every of their respective
representations and warranties contained in Sections 2.03 and 3.03 of the
Wholesale PSA is true and correct in all material respects as of the date
hereof and as of the date of each Increase.
SECTION 12.2. Covenants of the Servicer. The Servicer hereby
agrees that:
(a) upon three Business Days' prior written notice, it shall
allow employees and agents of the Administrative Agent, acting at the
request of any Bank Series Certificateholder, during normal business
hours of the Servicer and without disruption of normal business
conducted by the Servicer, to initiate an audit of the Servicer for
the purpose of confirming compliance with the terms of the Wholesale
PSA and this Long Term Supplement, which audit shall be at the expense
of the Servicer;
(b) it shall give prior notice to the Administrative Agent
of the delegation of any of its servicing, collection,
enforcement or administrative duties with respect to the
Receivables; and
(c) if, at any time, none of the then outstanding Series or
Classes of Investor Certificates are being rated by a Rating
Agency, then the condition set forth in Section 4.03(b)(iii)(z)
of the Wholesale PSA with respect to the Servicer's right to make
monthly deposits of Collections into the Collection Account shall
not be applicable and any change in the frequency of deposits of
Collections made other than pursuant to Section 4.03(b)(iii)(x)
or (y) of the Wholesale PSA shall be subject to the prior written
consent of the Agent.
ARTICLE XIII
CONDITIONS PRECEDENT
SECTION 13.1. Conditions Precedent to Effectiveness of Long Term
Supplement. This Long Term Supplement will become effective on the date
(the "Effective Date") that the Agent shall have received:
(a) Documents. (i) A copy of the Wholesale PSA executed by a
duly authorized officer of each of the Seller, the Servicer and the
Trustee and certified by a Responsible Officer of the Seller,
(ii) this Long Term Supplement executed by a duly authorized officer
of each of the Seller, the Servicer, the Trustee, the Agent and the
Administrative Agent, (iii) from each of the Persons listed on
Schedule 1 to the Long Term RPA, an executed Addendum and (iv) for
each of the Persons listed on Schedule 1, a Bank Series Certificate
executed by the Seller and authenticated by the Trustee.
(b) Filings, Registrations and Recordings. A certificate of a
Responsible Officer of the Servicer that all documents (including
financing statements) required to be filed in order (i) to perfect the
sale of the Receivables by CCC to the Seller pursuant to the
Receivables Purchase Agreement and (ii) to create, in favor of the
Trustee, a perfected ownership interest in the Trust Assets under the
Wholesale PSA with respect to which an ownership interest may be
perfected by a filing under the UCC shall, in each case, have been
properly filed in each office in each jurisdiction listed in the
Wholesale PSA or the Receivables Purchase Agreement, as the case may
be, and such filings are the only ones required in order to perfect
the sale of the Receivables to the Seller under the Receivables
Purchase Agreement or to the Trust under the Wholesale PSA, as the
case may be, in the jurisdictions listed therein. The Servicer shall
attach to such certificate evidence of each such filing, registration
or recordation and satisfactory evidence of the payment of any
necessary fee, tax or expense relating thereto.
(c) Lien Searches. A certificate of a Responsible Officer of
the Servicer that there are no Liens with respect to any of the
property described in paragraph (b), which certificate shall have
attached thereto the results of a recent search of UCC and other
filings with respect to the Seller and CCC in each of the
jurisdictions referred to in paragraph (b).
(d) Legal Opinions. (i) A legal opinion of Allan L. Ronquillo,
Esq., general counsel to the Seller and the Servicer, dated the
Effective Date, in substantially the form of Exhibit E-1.
(ii) A legal opinion of Cravath, Swaine & Moore, special
counsel to the Seller and the Servicer, dated the Effective Date, in
substantially the form of Exhibit E-2.
(e) Pooling and Servicing Agreement Conditions. A certificate
of a Responsible Officer of the Seller that the conditions to the
issuance of the Bank Series Certificates set forth in the Wholesale
PSA have been satisfied.
(f) Long Term RPA Conditions. A certificate of a Responsible
Officer of the Servicer that the conditions to the effectiveness of
the Long Term RPA set forth therein (excluding the condition that this
Long Term Supplement be effective) have been satisfied.
SECTION 13.2. Conditions Precedent to Increase. The obligation
of the Bank Series Certificateholders to make any Increase is subject to
the satisfaction of the following conditions precedent on or before the
Increase Date with respect thereto specified in the Increase Notice
delivered pursuant to Section 3.3:
(a) Long Term RPA. The Administrative Agent shall have received
the certificate required in connection with such Increase pursuant to
Section 4.3 of the Long Term RPA.
(b) Available Subordinated Amount. The Seller shall have
increased the Available Subordinated Amount to the Required Available
Subordinated Amount, after giving effect to such Increase.
(c) Reserve Account. The Seller shall have deposited into the
Reserve Account the amount, if any, necessary to cause the amount on
deposit in the Reserve Account to equal the Reserve Account Required
Amount, after giving effect to such Increase.
(d) Pre-Accrual Period Deposit. The Seller shall have deposited
into the Collection Account any Pre-Accrual Period Deposit required
pursuant to subsection 3.2(b).
(e) Certificate. The Trustee and the Administrative Agent shall
have received a certificate of a Responsible Officer of the Seller
stating that the conditions set forth in clauses (a), (b), (c) and (d)
of this subsection 13.2 have been satisfied and that the provisions of
subsection 3.2(b) will not be contravened by such Increase.
IN WITNESS WHEREOF, the Seller, the Servicer, the Trustee, the
Agent and the Administrative Agent have caused this Long Term Supplement to
be duly executed by their respective officers as of the day and year first
above written.
U.S. AUTO RECEIVABLES
COMPANY, Seller
By: /s/ John J. Shea
Title: Assistant Treasurer
CHRYSLER CREDIT CORPORATION,
Servicer
By: /s/ D.A. Robison
Title: Vice President
and Treasurer
MANUFACTURERS AND TRADERS
TRUST COMPANY, Trustee
By: /s/ Leslie Boynton
Title: Assistant Vice President
CHEMICAL BANK, as Agent and as
Administrative Agent
By: /s/ Karen Sager
Title: Vice President
<PAGE>
Annex I
to Long Term Supplement
CERTAIN DEFINITIONS
The following terms shall have the respective meanings set forth
below:
"Accrual Period" shall have the meaning specified in the Long
Term RPA.
"Addendum" shall mean an instrument, substantially in the form of
Exhibit A to the Long Term RPA, by which a Bank Series
Certificateholder becomes a party to the Long Term Supplement and the
Long Term RPA
"Additional Interest" shall have the meaning specified in Section
5.2(b) of the Long Term Supplement.
"Administrative Agent" shall have the meaning assigned in the
preamble to the Long Term Supplement.
"Agent" shall have the meaning assigned in the preamble to the
Long Term Supplement.
"Aggregate Bank Invested Amount" shall mean, as of any date, the
sum of the Bank Invested Amounts of all Bank Series Certificateholders
on such date.
"Aggregate Invested Amount" shall have the meaning assigned in
the Long Term RPA.
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of (a) the Bank Series Allocation
Percentage with respect to such Collection Period and (b) the
Defaulted Amount with respect to such Collection Period.
"Allocable Miscellaneous Payments" shall mean, with respect to
any Distribution Date, the product of (a) the Bank Series Allocation
Percentage for the related Collection Period and (b) Miscellaneous
Payments with respect to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of (a) the Bank Series Allocation
Percentage for the related Collection Period and (b) the aggregate
amount of Collections of Non-Principal Receivables relating to such
Deposit Date.
"Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of (a) the Bank Series Allocation Percentage
for the related Collection Period and (b) the aggregate amount of
Collections in respect of Principal Receivables relating to such
Deposit Date.
"Assignment and Acceptance" shall have the meaning assigned in
the Long Term RPA.
"Available Bank Principal Collections" with respect to any
Distribution Date shall mean the sum of (a) Bank Principal Collections
for such Distribution Date, (b) Allocable Miscellaneous Payments with
respect to such Distribution Date, (c) Bank Series Allocable Excess
Principal Collections, if any, on deposit in the Collection Account
for such Distribution Date, and (d) on the Termination Date, any funds
in the Reserve Account after giving effect to Section 5.7 of the Long
Term Supplement.
"Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of (a) the Available Seller's Non-Principal
Collections for such Deposit Date and (b) the Available Seller's
Principal Collections for such Deposit Date; provided, however, that
the Available Seller's Collections shall be zero for any Collection
Period with respect to which the Available Subordinated Amount is zero
on the Determination Date immediately following the end of such
Collection Period.
"Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for
such Collection Period by (b) Allocable Non-Principal Collections for
such Deposit Date.
"Available Seller's Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for
such Collection Period by (b) Allocable Principal Collections for such
Deposit Date.
"Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Initial Subordinated Amount and the
Incremental Subordinated Amount with respect to such Determination
Date. The Available Subordinated Amount for any subsequent
Determination Date shall mean an amount equal to (a) the Available
Subordinated Amount for the preceding Determination Date, minus (b)
the Incremental Subordinated Amount for such preceding Determination
Date, minus (c) the amount of Available Seller's Principal
Collections, if any, applied pursuant to subsection 5.7(b) or
5.7(d)(i) of the Long Term Supplement with respect to the preceding
Distribution Date, minus (d) the amount of reduction, if any, in the
Available Subordinated Amount, pursuant to subsection 5.7(b) or 5.7(c)
of the Long Term Supplement with respect to the preceding Distribution
Date, plus (e) the Incremental Subordinated Amount, if any, for such
Determination Date; provided, however, that (i) the Available
Subordinated Amount may be increased on each Increase Date by the
Seller to the Required Available Subordinated Amount by notice to the
Trustee on or before such Increase Date, (ii) the Available
Subordinated Amount shall be decreased pursuant to subsection 3.3 of
the Long Term Supplement by the Seller to the Required Available
Subordinated Amount by notice to the Trustee on or before the related
Distribution Date or Series Issuance Date, as the case may be, and
(iii) the Available Subordinated Amount may be increased on any
Determination Date by the Seller, in its sole discretion, by notice to
the Trustee on or before any such Determination Date; and provided,
further, that, on any date, the Available Subordinated Amount shall
not exceed an amount equal to the sum of (i) the product of (A) 10.40%
and (B) the Aggregate Bank Invested Amount on such date divided by the
Bank Percentage and (ii) the Incremental Subordinated Amount, if any,
with respect to the preceding Determination Date.
"Bank Invested Amount" shall mean, with respect to any Bank
Series Certificateholder and as of any date, an amount equal to (a)
such Bank Series Certificateholder's Bank Invested Amount on the
immediately preceding date (or, with respect to the day as of which
such Bank Series Certificateholder becomes a party to this Long Term
Supplement, whether by executing an Addendum, an Assignment and
Acceptance or otherwise, (i) the product of such Bank Series
Certificateholder's Commitment Percentage and the Initial Aggregate
Bank Invested Amount or (ii) the portion of the transferor's Bank
Invested Amount being purchased, in the case of a Purchasing Bank),
plus (b) the amount of any increases in such Bank Series
Certificateholder's Bank Invested Amount pursuant to Section 3.2 of
the Long Term Supplement made on such date, minus (c) the amount of
any distributions to such Bank Series Certificateholder pursuant to
subsections 5.6(b) or 5.6(c) of the Long Term Supplement on such date,
minus (d) the product of (i) such Bank Series Certificateholder's
Commitment Percentage and (ii) the excess, if any, of the aggregate
amount of Investor Charge-Offs over the aggregate amount of Investor
Charge-Offs reimbursed prior to such date.
"Bank Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) the Floating
Allocation Percentage for the related Collection Period and (ii)
Allocable Non-Principal Collections deposited in the Collection
Account for the related Collection Period.
"Bank Percentage" shall mean 90.55%.
"Bank Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to the Revolving Period, or the
Principal Allocation Percentage, with respect to an Early Amortization
Period, and (ii) Allocable Principal Collections deposited in the
Collection Account for the related Collection Period (or any partial
Collection Period which occurs as the first Collection Period during
an Early Amortization Period) and (b) the amount, if any, of Collec-
tions of Non-Principal Receivables, funds in the Reserve Account,
Investment Proceeds and Available Seller's Principal Collections to be
distributed pursuant to Section 5.6(a)(iii), 5.6(a)(iv), 5.7(b) or (d)
or 5.9(b) of the Long Term Supplement on such Distribution Date.
"Bank Series" shall mean the Series of Investor Certificates, the
terms of which are specified in the Long Term Supplement.
"Bank Series Allocable Excess Principal Collections" shall mean,
with respect to any Distribution Date, the Principal Shortfall with
respect to the Bank Series for such Distribution Date; provided,
however, that if the aggregate amount of Excess Principal Collections
for all Series for such Distribution Date is less than the aggregate
amount of "Principal Shortfalls" (as defined in the Wholesale PSA) for
such Distribution Date, then Bank Series Allocable Excess Principal
Collections shall equal the product of (x) Excess Principal
Collections for all Series for such Distribution Date and (y) a
fraction, the numerator of which is the Principal Shortfall with
respect to the Bank Series for such Distribution Date and the
denominator of which is the aggregate amount of "Principal Shortfalls"
for all Series on such Distribution Date.
"Bank Series Allocation Percentage" shall mean the Series
Allocation Percentage with respect to the Bank Series.
"Bank Series Certificateholders" shall mean the Holders of Bank
Series Certificates.
"Bank Series Certificateholders' Interest" shall mean that
portion of the Certificateholders' Interest evidenced by the Bank
Series Certificates.
"Bank Series Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Trustee, substantially
in the form of Exhibit A to the Long Term Supplement.
"Base Rate" shall have the meaning assigned in the Long Term RPA.
"Business Day" shall have the meaning assigned in the Long Term
RPA.
"CARCO" shall mean Chrysler Auto Receivables Company, a Delaware
corporation.
"CCC" shall mean Chrysler Credit Corporation, a Delaware
corporation.
"Certificateholders Monthly Servicing Fee" shall have the meaning
specified in Section 4.1 of the Long Term Supplement.
"CFC Revolving Credit Agreement" shall have the meaning assigned
in the Long Term RPA.
"Change in Law" shall have the meaning specified in Section 8.5
of the Long Term Supplement.
"Collection Period" shall have the meaning assigned in the
Wholesale PSA.
"Commitment Percentage" shall have the meaning assigned in the
Long Term RPA.
"Commitment Termination Event" shall have the meaning assigned in
the Long Term RPA.
"Daily Base Rate Interest Expense" shall mean, for any day in any
Accrual Period, the product of (a) the portion of the Aggregate Bank
Invested Amount not allocated to the LIBO Tranche on such day divided
by 365 (or 366, as the case may be) and (b) the Base Rate in effect on
such day.
"Daily Report" shall mean a report prepared by the Servicer on
each Business Day for the period specified therein, in substantially
the form of Exhibit C to the Long Term Supplement or in such other
form as may be approved by the Administrative Agent and the Servicer.
"Dealer Rate" shall mean, as of any date, the rate at which
interest on Principal Receivables is being collected from Dealers on
such date.
"Decrease" shall have the meaning assigned in Section 3.3 of the
Long Term Supplement.
"Default Rate" shall have the meaning assigned in the Long Term
RPA.
"Deficiency Amount" shall have the meaning specified in Section
5.5 of the Long Term Supplement.
"Distribution Date" shall mean, with respect to the Bank Series,
the fifteenth day of each month or, if such day is not a Business Day,
the next succeeding Business Day.
"Distribution Date Statement" shall mean a report prepared by the
Servicer on each Determination Date for the immediately preceding
Collection Period, in substantially the form of Exhibit B to the Long
Term Supplement or in such other form as may be approved by the
Administrative Agent and the Servicer.
"Early Amortization Event" shall mean, with respect to the Bank
Series, an Early Amortization Event specified in Section 9.01 of the
Wholesale PSA or in the Section 7.1 of the Long Term Supplement.
"Early Amortization Period" shall mean, as used in the Long Term
Supplement, an Early Amortization Period (as defined in the Wholesale
PSA) with respect to the Bank Series.
"Effective Date" shall have the meaning specified in Section
13.1.
"Eurodollar Margin" shall have the meaning assigned in the Long
Term RPA.
"Excess Principal Collections" means the sum, with respect to any
Collection Period and with respect to all Series of Investor
Certificates issued pursuant to the Wholesale PSA, of the difference
between (i) Principal Collections allocated to the Investor
Certificates of such Series and (ii) distributions of Principal
Collections to the holders of such Investor Certificates, in each case
as calculated on the Distribution Date with respect to such Collection
Period.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less
than 0% nor more than 100%) equal to (a) 100% minus, when used with
respect to Non-Principal Receivables and Defaulted Receivables and
Principal Receivables during the Revolving Period, the sum of (i) the
Floating Allocation Percentage with respect to such Collection Period
and (ii) the percentage equivalent of a fraction, the numerator of
which is the Available Subordinated Amount as of the Determination
Date occurring in such Collection Period (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date), and
the denominator of which is the product of (i) the Pool Balance as of
the last day of the immediately preceding Collection Period and (ii)
the Bank Series Allocation Percentage with respect to the Collection
Period in respect of which the Excess Seller's Percentage is being
calculated and (b) 100% minus, when used with respect to Principal
Receivables during an Early Amortization Period, the sum of (i) the
Principal Allocation Percentage with respect to such Collection Period
and (ii) the percentage determined pursuant to clause (a) (ii) above
for such Collection Period.
"Excess Servicing" shall mean, with respect to any Distribution
Date, the amount, if any, specified pursuant to Section 5.6(a)(vi) of
the Long Term Supplement with respect to such Distribution Date.
"Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the
Aggregate Bank Invested Amount as of the last day of the immediately
preceding Collection Period and the denominator of which is the
product of (a) the Pool Balance as of the last day of the immediately
preceding Collection Period and (b) the Bank Series Allocation
Percentage with respect to the Collection Period in respect of which
the Floating Allocation Percentage is being calculated.
"Funding Rate" shall mean, as of any date, the rate at which the
Aggregate Bank Invested Amount shall bear interest, i.e., either the
LIBO Rate plus the Eurodollar Margin or the Base Rate, plus, if CCC is
not the Servicer, the Servicing Fee Rate.
"Increase" shall have the meaning assigned in subsection 3.2(a)
of the Long Term Supplement.
"Increase Amount" shall mean, with respect to any Increase Date,
the amount of the Increase in the Invested Amount on such date.
"Increase Date" shall have the meaning assigned in subsection
3.2(a) of the Long Term Supplement.
"Increased Costs" shall have the meaning assigned in Section 8.4
of the Long Term Supplement.
"Incremental Subordinated Amount" shall mean, with respect to any
Determination Date, the result obtained by multiplying (a) a fraction,
the numerator of which is the sum of the Aggregate Bank Invested
Amount with respect to the immediately preceding Collection Period and
the Available Subordinated Amount for such Determination Date
(calculated without adding the Incremental Subordinated Amount for
such Distribution Date as described in clause (f) of the definition
thereof), and the denominator of which is the Pool Balance on the last
day of such Collection Period by (b) the Trust Incremental
Subordinated Amount.
"Initial Aggregate Bank Invested Amount" shall mean $0.
"Initial Bank Series Certificateholder" shall have the meaning
assigned in the preamble of the Long Term Supplement.
"Initial Invested Amount" shall mean, with respect to the Bank
Series, (I) with respect to any Collection Period relating to the
Revolving Period, an amount equal to the sum of (i) the Initial
Aggregate Bank Invested Amount plus (ii) the aggregate amount of
Increases pursuant to Section 3.2 of the Long Term Supplement made
during or prior to such Collection Period minus (iii) the aggregate
amount of distributions pursuant to Section 5.6(b) or 5.6(c) of the
Long Term Supplement made or to be made on the Distribution Date
occurring in such Collection Period or made on prior Distribution
Dates and (II) as of any date during an Early Amortization Period, the
Initial Invested Amount as of the last day of the Revolving Period.
"Initial Reserve Account Deposit Amount" shall mean zero.
"Initial Subordinated Amount" shall mean $0.
"Interest Coverage Shortfall" shall mean, for any Distribution
Date, the excess of (a) the sum of (i) Monthly Interest for such
Distribution Date plus any Monthly Interest accrued but not paid with
respect to prior Distribution Dates, plus the amount of Additional
Interest for such Distribution Date and any Additional Interest
previously due but not distributed to the Bank Series
Certificateholders on any prior Distribution Date and (ii) the
Certificateholders Monthly Servicing Fee for such Distribution Date
over (b) the sum of any Pre-Accrual Period Deposit applied pursuant to
Section 5.6, Bank Non-Principal Collections, Available Seller's
Non-Principal Collections and Investment Proceeds for such
Distribution Date.
"Interest Shortfall" shall have the meaning specified in Section
5.2 of the Long Term Supplement.
"Invested Amount" shall mean, when used with respect to the Bank
Series and with respect to any date, an amount equal to the Aggregate
Bank Invested Amount.
"Investment Proceeds" shall have the meaning specified in Section
5.4 of the Long Term Supplement.
"Investor Charge-Offs" shall have the meaning specified in
Section 5.8 of the Long Term Supplement.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Allocable
Defaulted Amount for the related Collection Period and (b) the
Floating Allocation Percentage for the related Collection Period.
"LIBO Rate" shall have the meaning assigned in the Long Term RPA.
"LIBO Tranche" shall mean the portion of the Aggregate Bank
Invested Amount for which Monthly Interest is calculated by reference
to the LIBO Rate.
"Long Term Commitment" shall have the meaning assigned in the
Long Term RPA.
"Long Term RPA" shall have the meaning set forth in the
introduction to the Long Term Supplement.
"Long Term Supplement" shall mean the Long Term Bank Supplement,
dated as of May 23, 1994, among the Seller, the Servicer, the Trustee,
the Bank Series Certificateholders, the Agent and the Administrative
Agent, as amended, supplemented or otherwise modified from time to
time.
"Monthly Base Rate Interest" shall have the meaning specified in
Section 5.2 of the Long Term Supplement.
"Monthly Certificateholders' Statement" shall mean a report
prepared by the Servicer with respect to each Distribution Date for
the immediately preceding Collection Period, during the Revolving
Period, in substantially the form of Exhibit D-1 to the Long Term
Supplement and, during an Early Amortization Period, in substantially
the form of Exhibit D-2 to the Long Term Supplement.
"Monthly Interest" shall have the meaning specified in Section
5.2 of the Long Term Supplement.
"Monthly Payment Rate" shall mean, for any Collection Period, the
percentage equivalent of a fraction the numerator of which is
Principal Collections for such Collection Period and the denominator
of which is the average daily Pool Balance for such Collection Period.
"Monthly Principal" shall have the meaning specified in Section
5.3 of the Long Term Supplement.
"Monthly Servicing Fee" shall have the meaning specified in
Section 4.1 of the Long Term Supplement.
"Pre-Accrual Period Deposit" shall have the meaning assigned in
subsection 3.2(b) of the Long Term Supplement.
"Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the
Aggregate Bank Invested Amount as of the last day of the Revolving
Period and the denominator of which is the product of (a) the Pool
Balance as of the last day of the immediately preceding Collection
Period and (b) the Bank Series Allocation Percentage with respect to
the Collection Period in respect of which the Principal Allocation
Percentage is being calculated; provided, however, that with respect
to that portion of any Collection Period that falls after the date on
which any Early Amortization Event occurs (other than (i) an Early
Amortization Event which has resulted in an Early Amortization Period
which has ended as described in clause (c) thereof or (ii) an Early
Amortization Event which has resulted in an Early Amortization Period
which has ended and which has been followed by a recommenced Revolving
Period pursuant to the last proviso in the definition of Revolving
Period), the Principal Allocation Percentage shall be reset using the
Pool Balance as of the close of business on the date on which such
Early Amortization Event shall have occurred and Principal Collections
shall be allocated for such portion of such Collection Period using
such reset Principal Allocation Percentage.
"Principal Shortfall" shall mean, with respect to the Bank Series
and any Distribution Date, an amount equal to the excess, if any, of
(i) (x) for any Distribution Date with respect to the Revolving
Period, the Decrease, if any, with respect to such Distribution Date
or (y) for any Distribution Date with respect to an Early Amortization
Period, the Aggregate Bank Invested Amount, over (ii) Available Bank
Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Excess Principal Collections).
"Purchasing Bank" shall have the meaning specified in the Long
Term RPA.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date, the sum
of (i) the Aggregate Bank Invested Amount on such Distribution Date,
(ii) accrued and unpaid interest on the unpaid balance of the Bank
Series Certificates (calculated on the same basis as is Monthly
Interest under Section 5.2) through the day preceding such
Distribution Date, and (iii) the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest previously
due but not distributed to the Bank Series Certificateholders on a
prior Distribution Date.
"Reference Banks" shall have the meaning specified in the Long
Term RPA.
"Required Available Subordinated Amount" shall mean, on any date,
the sum of (i) the product of (A) the Required Subordinated Percentage
and (B) the Aggregate Bank Invested Amount on such date divided by the
Bank Percentage and (ii) the Incremental Subordinated Amount, if any,
with respect to the preceding Determination Date.
"Required Bank Series Certificateholders" shall mean "Required
Banks", as defined in the Long Term RPA.
"Required Participation Percentage" shall mean, with respect to
the Bank Series, 104%; provided, however, that the Seller may, upon 10
days' prior notice to the Trustee, the Administrative Agent, each
Rating Agency and any Enhancement Provider, reduce the Required
Participation Percentage with respect to all outstanding Series to a
percentage which shall not be less than 100%, provided that no Rating
Agency shall have notified the Seller or the Servicer that any such
reduction will result in a reduction or withdrawal of the rating of
any outstanding Series or Class with respect to which it is a Rating
Agency.
"Required Reserve Percentage" shall mean 0.55%.
"Required Subordinated Percentage" shall mean 9.45%.
"Required Subordination Draw Amount" shall have the meaning
specified in Section 5.5 of the Long Term Supplement.
"Reserve Account" shall have the meaning specified in Section 5.4
of the Long Term Supplement.
"Reserve Account Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which (i) the Reserve
Account Required Amount for such Distribution Date exceeds (ii) the
amount of funds in the Reserve Account after giving effect to any
withdrawals therefrom on such Distribution Date.
"Reserve Account Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Required
Reserve Percentage and (b) the Aggregate Bank Invested Amount on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) divided by the Bank Percentage.
"Reserve Account Trigger Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) 0.4% and (b)
the Aggregate Bank Invested Amount on such Distribution Date (after
giving effect to any change therein on such Distribution Date) divided
by the Bank Percentage.
"Retail Seller" shall have the meaning assigned in the Long Term
RPA.
"Revolving Period" shall mean the period beginning at the close
of business on the Effective Date and ending on the earlier of (a) the
last day of the Collection Period ending in April 1998, and (b) the
close of business on the day an Early Amortization Period commences;
provided, however, that, if any Early Amortization Period ends as
described in clause (c) of the definition thereof, the Revolving
Period will recommence as of the close of business on the day such
Early Amortization Period ends and provided, further, that (i) if any
Early Amortization Period has resulted from the occurrence of an Early
Amortization Event described in Section 7.1(e) or 7.1(g) of the Long
Term Supplement, (ii) no other Early Amortization Event shall have
occurred and the scheduled termination of the Revolving Period
pursuant to clause (a) above shall not have occurred, (iii) the
Aggregate Bank Invested Amount shall have been reduced to zero and
(iv) the Dealer Rate shall be greater than the Funding Rate, the
Revolving Period shall recommence as of the close of business on the
day the conditions set forth in clauses (i), (ii), (iii) and (iv)
above shall have been satisfied.
"Section 8 Costs" shall mean Increased Costs, any reemployment
costs due pursuant to Section 8.1 of the Long Term Supplement, any
amounts due pursuant to Section 8.5 of the Long Term Supplement and
any additional amounts payable pursuant to Section 8.6 of the Long
Term Supplement.
"Seller" shall mean U.S. Auto Receivables Company, a Delaware
corporation.
"Seller's Collections" shall mean, with respect to any Collection
Period, the sum of (a) the Seller's Percentage of Allocable
Non-Principal Collections for the related Collection Period plus (b)
the Seller's Percentage of Allocable Principal Collections for the
related Collection Period.
"Seller's Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used with respect to Non-Principal
Receivables and Defaulted Receivables and Principal Receivables during
the Revolving Period, and (b) the Principal Allocation Percentage,
when used with respect to Principal Receivables during an Early
Amortization Period.
"Servicer" shall initially mean CCC, in its capacity as servicer
under the Wholesale PSA and after any Service Transfer, the Successor
Servicer.
"Servicing Fee Rate" shall mean, with respect to the Bank Series,
1.0%.
"Short Term Commitment" shall have the meaning assigned in the
Long Term RPA.
"Short Term Commitment Period" shall have the meaning assigned in
the Long Term RPA.
"Taxes" shall have the meaning assigned in subsection 8.6(a) of
the Long Term Supplement.
"Termination Date" shall mean the date which is thirty-six months
after the last day of the Revolving Period.
"Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant
to Section 12.02(c) of the Wholesale PSA with respect to the Bank
Series.
"Wholesale Bank Series Certificate Sublimit" shall mean the
"Wholesale Senior Certificate Sublimit", as defined in the Long Term
RPA.
"Wholesale PSA" shall mean the Pooling and Servicing Agreement
dated as of May 31, 1991, as assigned by CARCO to the Seller on August
8, 1991, among the Seller, the Servicer and the Trustee, as assigned
and as amended and supplemented from time to time.
Exhibit 10-K
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.
as Retail Seller and Initial Wholesale Seller
CHRYSLER FINANCIAL CORPORATION
as Guarantor
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
MORGAN BANK OF CANADA
SWISS BANK CORPORATION (CANADA)
as Banks
ROYAL BANK OF CANADA
as Agent
___________________________________________________________________________
$75,000,000
SHORT-TERM RECEIVABLES PURCHASE AGREEMENT
May 23, 1994
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . - 1 -
ARTICLE II - AMOUNT AND TERMS OF COMMITMENTS
2.1 Replacement. . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
2.2 Commitment.. . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
2.3 Related Documents. . . . . . . . . . . . . . . . . . . . . . - 2 -
(a) Short-Term Retail PSA. . . . . . . . . . . . . . . . . . . . - 2 -
(b) Short-Term Wholesale Series Supplement.. . . . . . . . . . . - 2 -
2.4 Procedure for Purchase. . . . . . . . . . . . . . . . . . . - 3 -
(a) Seller Procedure . . . . . . . . . . . . . . . . . . . . . . - 3 -
(b) Agent/Bank Deposit Procedure.. . . . . . . . . . . . . . . . - 3 -
2.5 Utilization Fee. . . . . . . . . . . . . . . . . . . . . . . - 3 -
2.6 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
2.7 Default Interest . . . . . . . . . . . . . . . . . . . . . . - 4 -
2.8 Termination or Reduction of Commitments. . . . . . . . . . . - 4 -
(a) Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
(b) Fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
(c) Minimum Reduction. . . . . . . . . . . . . . . . . . . . . . - 4 -
2.9 Increase in Commitments. . . . . . . . . . . . . . . . . . . - 5 -
2.10 Rate of Return. . . . . . . . . . . . . . . . . . . . . . . - 5 -
(a) Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . - 5 -
(b) Wholesale. . . . . . . . . . . . . . . . . . . . . . . . . . - 5 -
2.11 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . - 5 -
(a) Pro Rata Treatment.. . . . . . . . . . . . . . . . . . . . . - 5 -
(b) Payments to Agent. . . . . . . . . . . . . . . . . . . . . . - 5 -
(c) Distribution of Payments by Agent. . . . . . . . . . . . . . - 6 -
2.12 Addition of Wholesale Sellers. . . . . . . . . . . . . . . . - 6 -
ARTICLE III- REPRESENTATIONS AND WARRANTIES
3.1 Corporate Existence; Compliance with Law . . . . . . . . . . - 7 -
3.2 Corporate Power; Authorization; Enforceable. . . . . . . . . - 7 -
3.3 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.4 No Material Litigation.. . . . . . . . . . . . . . . . . . . - 8 -
3.5 No Default.. . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.6 Voting Control.. . . . . . . . . . . . . . . . . . . . . . . - 8 -
ARTICLE IV - CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of Short-Term RPA. . . . . . . . - 8 -
4.2 Notice of Replacement Effective Date . . . . . . . . . . . .- 11 -
4.3 Failure to Reach Replacement Effective Date. . . . . . . . .- 11 -
4.4 Conditions to Each Purchase. . . . . . . . . . . . . . . . .- 11 -
ARTICLE V - COVENANTS
5.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .- 13 -
5.2 Voting Control . . . . . . . . . . . . . . . . . . . . . . .- 14 -
5.3 (a) Activities of the Seller . . . . . . . . . . . . . . . . . .- 14 -
(b) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . .- 14 -
(c) Guarantees . . . . . . . . . . . . . . . . . . . . . . . . .- 14 -
(d) Investments. . . . . . . . . . . . . . . . . . . . . . . . .- 15 -
(e) Agreements . . . . . . . . . . . . . . . . . . . . . . . . .- 15 -
(f) Maintenance of Separate Existence. . . . . . . . . . . . . .- 15 -
5.4 Accounting . . . . . . . . . . . . . . . . . . . . . . . . .- 16 -
5.5 Collateral Protection Insurance. . . . . . . . . . . . . . .- 16 -
ARTICLE VI - GUARANTEE
6.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . .- 16 -
6.2 Absolute and Unconditional Obligations . . . . . . . . . . .- 16 -
6.3 Discretion of Banks. . . . . . . . . . . . . . . . . . . . .- 17 -
6.4 General. . . . . . . . . . . . . . . . . . . . . . . . . . .- 17 -
ARTICLE VII - COMMITMENT TERMINATION EVENTS
7.1 Commitment Termination Events. . . . . . . . . . . . . . . .- 18 -
ARTICLE VIII - THE AGENT
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . .- 20 -
8.2 Delegation of Duties.. . . . . . . . . . . . . . . . . . . .- 20 -
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . .- 20 -
8.4 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . .- 21 -
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . .- 21 -
8.6 Non-Reliance on Agent and Other Banks. . . . . . . . . . . .- 22 -
8.7 Indemnification of Agent.. . . . . . . . . . . . . . . . . .- 22 -
8.8 Agent in Its Individual Capacity.. . . . . . . . . . . . . .- 23 -
8.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . .- 23 -
8.10 Exchange of Information. . . . . . . . . . . . . . . . . . .- 24 -
8.11 Netting of Payment.. . . . . . . . . . . . . . . . . . . . .- 24 -
8.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . . .- 24 -
8.13 For Benefit of Banks Only. . . . . . . . . . . . . . . . . .- 24 -
ARTICLE IX - INDEMNIFICATION
9.1 Payment of Expenses and Taxes. . . . . . . . . . . . . . . .- 24 -
9.2 Statements, Reports etc. . . . . . . . . . . . . . . . . . .- 26 -
9.3 Increased Costs. . . . . . . . . . . . . . . . . . . . . . .- 26 -
9.4 Reemployment Costs . . . . . . . . . . . . . . . . . . . . .- 27 -
9.5 Changes in Capital Requirements. . . . . . . . . . . . . . .- 28 -
9.6 Replacement of Banks . . . . . . . . . . . . . . . . . . . .- 30 -
9.7 Survival.. . . . . . . . . . . . . . . . . . . . . . . . . .- 30 -
ARTICLE X - MISCELLANEOUS
10.1 Amendments and Waivers.. . . . . . . . . . . . . . . . . . .- 31 -
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .- 32 -
10.3 No Waiver; Cumulative Remedies.. . . . . . . . . . . . . . .- 32 -
10.4 Survival of Representations and Warranties.. . . . . . . . .- 33 -
10.5 Successors and Assigns . . . . . . . . . . . . . . . . . . .- 33 -
10.6 Participation. . . . . . . . . . . . . . . . . . . . . . . .- 33 -
10.7 Optional Sale. . . . . . . . . . . . . . . . . . . . . . . .- 33 -
10.8 Sale of Interests. . . . . . . . . . . . . . . . . . . . . .- 34 -
10.9 Adjustments; Set-Off.. . . . . . . . . . . . . . . . . . . .- 35 -
10.10 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . .- 36 -
10.11 Severability.. . . . . . . . . . . . . . . . . . . . . . . .- 36 -
10.12 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . .- 37 -
10.13 Governing Law. . . . . . . . . . . . . . . . . . . . . . . .- 37 -
10.14 Submission To Jurisdiction; Waivers. . . . . . . . . . . . .- 37 -
10.15 Further Assurances . . . . . . . . . . . . . . . . . . . . .- 38 -
10.16 Termination. . . . . . . . . . . . . . . . . . . . . . . . .- 38 -
SCHEDULES
SCHEDULE 1.1 DEFINITIONS
SCHEDULE 2.4 NOTICE OF REQUESTED PURCHASE
SCHEDULE 2.8 NOTICE OF REDUCTION OF SHORT-TERM COMMITMENT AMOUNT
SCHEDULE 4.1(b) FORM OF TERMINATION AGREEMENT
SCHEDULE 4.1(m)(i) FORM OF LEGAL OPINION OF GENERAL COUNSEL OF THE
GUARANTOR
SCHEDULE 4.1(m)(ii) FORM OF LEGAL OPINION OF COUNSEL TO CCCL
SCHEDULE 4.1(n) ACKNOWLEDGEMENT FROM CCCL AND THE WHOLESALE CUSTODIAN
SCHEDULE 10.8(a) FORM OF COMMITMENT TRANSFER SUPPLEMENT
<PAGE>
THIS SHORT-TERM RECEIVABLES PURCHASE AGREEMENT, dated May
23, 1994, among CHRYSLER CREDIT CANADA LTD., a Canadian corporation
("CCCL"), in its capacity as seller of Retail Obligations under the Short-
Term Retail PSA referred to below (in such capacity, the "Retail Seller")
and in its capacity as seller of undivided ownership interests in Wholesale
Pooled Property (in such capacity, the "Initial Wholesale Seller"), the
Additional Wholesale Sellers from time to time parties to this Short-Term
RPA, CHRYSLER FINANCIAL CORPORATION, a Michigan corporation ("CFC"), ROYAL
BANK OF CANADA, a Canadian chartered bank ("Royal"), Chartered Banks from
time to time parties to this Short-Term RPA (collectively, the "Banks") and
ROYAL as agent for the Banks hereunder (in such capacity, the "Agent")
WITNESSES:
WHEREAS CCCL, CFC and Royal are parties to the Standby
Receivables Purchase Agreement dated January 27, 1993 (the "1993 RPA") and
the Related Agreements (as defined therein);
WHEREAS the parties hereto wish to replace the 1993 RPA in
part with this Short-Term RPA except as otherwise provided in this Short-
Term RPA;
NOW THEREFORE in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE I - DEFINITIONS
1.1 Defined Terms. The capitalized terms used herein which are
defined in, or by reference in, Schedule 1.1 hereto shall have the meanings
specified therein.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Short-Term RPA shall have their defined meanings when used in the
Related Documents or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Related Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms not defined in Schedule 1.1 and accounting terms partly defined in
Schedule 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Short-Term RPA shall refer to this Short-
Term RPA as a whole and not to any particular provision of this Short-Term
RPA, and references to Articles, Sections, subsections and Schedules are
references to articles, sections, subsections of and schedules to this
Short-Term RPA unless otherwise specified. All references to "this Short-
Term RPA" or "the Short-Term RPA" means this Short-Term RPA or "the Short-
Term RPA" as the same may be amended, supplemented or otherwise modified
from time to time.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The headings used in this Short-Term RPA are for convenience
of reference only and shall not affect the interpretation of this Short-
Term RPA.
ARTICLE II - AMOUNT AND TERMS OF COMMITMENTS
2.1 Replacement. Upon the Replacement Effective Date, the 1993
Commitments shall be terminated. If any 1993 Short-Term Carried-Over
Invested Amount is then outstanding and the 1993 Related Documents are not
terminated pursuant to the 1993 Termination Agreement, such 1993 Short-Term
Carried-Over Invested Amount shall remain outstanding under and pursuant to
the 1993 RPA and the 1993 Related Documents, provided that, as set forth in
the definitions of 1993 Short-Term Carried-Over Invested Amount and
Aggregate 1994 Invested Amount, such 1993 Short-Term Carried-Over Invested
Amount shall be credited to reduce the Banks' obligations to make Purchases
hereunder.
2.2 Commitment. Subject to the terms and conditions hereof,
during the Commitment Period each Bank severally agrees to purchase from
the Retail Seller, Retail Obligations (each such purchase, a "Retail
Purchase") and to purchase from the Wholesale Sellers undivided ownership
interests in Wholesale Pooled Property (each such purchase, a "Wholesale
Purchase") in amounts such that at any one time such Bank's Purchase
Percentage of the Short-Term Aggregate Invested Amount shall not exceed
such Bank's Commitment Amount.
2.3 Related Documents.
(a) Short-Term Retail PSA. Retail Purchases hereunder shall be
made pursuant to the terms and conditions of the Short-Term Retail PSA.
(b) Short-Term Wholesale Series Supplement. Wholesale Purchases
hereunder shall be made pursuant to the terms and conditions of the Short-
Term Wholesale Series Supplement, and each Bank's undivided ownership
interests in the Wholesale Pooled Property shall be evidenced by a Short-
Term Wholesale Certificate issued to such Bank pursuant to the Wholesale
PSA and the Short-Term Wholesale Series Supplement.
2.4 Procedure for Purchase.
(a) Seller Procedure. The Sellers may utilize the Commitments
during the Commitment Period on any Business Day, provided that:
(i) Notice. CCCL shall give the Agent irrevocable notice
in the form of, and containing the particulars set out
in, Schedule 2.4 hereto (which notice must be received
by the Agent prior to 10:00 a.m., Toronto time, at
least five Business Days prior to the requested
Purchase Date); and
(ii) Minimum Purchase Amount. On each Purchase Date, the
Purchases under the Commitments will be in an aggregate
amount equal to at least $5,000,000 in respect of a
Retail Purchase and $10,000,000 in respect of a
Wholesale Purchase.
(b) Agent/Bank Deposit Procedure. Upon receipt of any such
notice from CCCL, the Agent shall promptly notify each Bank thereof. Each
Bank shall deposit in the Clearing Account an amount in immediately
available funds equal to the amount of the Purchase Price or portion
thereof required to be paid by it in respect of such Purchase prior to
11:00 a.m., Toronto time, on the Purchase Date requested. The Agent shall
cause all such amounts to be withdrawn from the Clearing Account and shall
make the aggregate amount so withdrawn available to the Seller by
depositing the proceeds thereof in the account of the Seller with the
Agent.
2.5 Utilization Fee. CCCL agrees to pay to the Agent for the
account of each Bank an additional fee (the "Utilization Fee") in respect
of each month during which Utilization exceeds 33-1/3%, from and including
the Replacement Effective Date to but excluding the later of (i) the
Commitment Termination Date and (ii) the date on which the Short-Term
Aggregate Invested Amount is zero (such later date, the "Final Date"). The
Utilization Fee shall be payable monthly in arrears on (a) the first
Business Day of each calendar month (or portion thereof) and (b) on the
Final Date (for the period ended on such date for which no payment has been
received pursuant to clause (a) above) (each such month or period, a
"Utilization Period"). The Utilization Fee for each Utilization Period
shall be equal to the product of (x) the average daily Short-Term Aggregate
Invested Amount during such Utilization Period, (y) an annual rate equal to
.125% and (z) a fraction the numerator of which is the actual number of
days elapsed in the Utilization Period and the denominator of which is 365
(or 366, in leap years).
2.6 Facility Fee. The Seller shall pay to the Agent for the
account of each Bank, a facility fee (the "Facility Fee") for each day from
and including the Replacement Effective Date to but excluding the Final
Date. Such Facility Fee shall be payable quarterly in arrears on (a) the
first Business Day of each of January, April, July and October (for the
three-month period (or portion thereof) ended on the last day of the
immediately preceding month) and (b) on the Final Date (for the period
ended on such date for which no payment has been received pursuant to
clause (a) above) (each such period, a "Fee Period"). The Facility Fee for
each Fee Period shall be an amount equal to the product of (x) the average
daily Short-Term Commitment Amount during such Fee Period, (y) an annual
rate equal to the Short-Term Facility Fee Percentage, and (z) a fraction
the numerator of which is the actual number of days elapsed in the Fee
Period and the denominator of which is 365 (or 366, in leap years).
2.7 Default Interest. Facility Fees, Utilization Fees or other
fees that are not paid when due shall bear interest, payable on demand,
from the date when due until paid in full (both before and after judgment)
at the Default Rate.
2.8 Termination or Reduction of Commitments. The Sellers may
terminate the Commitments or, from time to time, reduce the Short-Term
Commitment Amount, provided that:
(a) Notice. CCCL shall give the Agent irrevocable notice in the
form of and containing the particulars set out in Schedule 2.8 (which
notice must be received by the Agent at least five Business Days prior to
such cancellation or reduction);
(b) Fees. On the date of any such cancellation CCCL shall pay
in full any accrued and unpaid Facility Fees, Utilization Fees or other
amounts owing to the Agent or the Banks hereunder; and
(c) Minimum Reduction. Any such reduction shall be in an amount
at least equal to $5,000,000 and be a whole multiple of $1,000,000 and
shall permanently reduce the Short-Term Commitment Amount then in effect.
2.9 Increase in Commitments.
From time to time the Seller may propose to the Agent in
writing that the Short-Term Commitment Amount be increased either by
increasing the Commitment of one or more Banks (each, an "Increasing Bank")
or by introducing one or more new Chartered Banks as a Bank hereunder
(each, a "New Bank"). Each proposed increase will be subject to receipt by
the Agent of the prior written consent of each Increasing Bank whose
Commitment is proposed to be increased and shall become effective upon
receipt by the Agent of duly executed supplements as provided in subsection
10.1 of this Short-Term RPA evidencing an aggregate increase in Commitment
Amounts equal to the aggregate amount of such increase in respect of the
Increasing Bank's Commitment or New Bank's Commitment, as applicable, and,
in the case of a New Bank, duly executed counterparts of this Short-Term
RPA and the Related Documents evidencing the addition of such New Bank as a
party thereto and a Short-Term Wholesale Certificate duly certified by the
Custodian and issued to such New Bank in accordance with the Wholesale PSA.
From and after the date on which any such proposed increase becomes
effective pursuant to the provisions of this subsection 2.9, the aggregate
dollar amount set forth in the definition of "Short-Term Commitment Amount"
in this Short-Term RPA shall be increased by the amount so proposed by the
Seller in respect of the Increasing Banks' or New Banks' Commitments. No
such increase shall diminish or otherwise affect the entitlement of any
Bank to any amounts payable hereunder or under the Related Documents in
respect of any Purchases made prior to the date such increase becomes
effective.
2.10 Rate of Return.
(a) Retail. The rate of return or yield due to the Banks on all
or any portion of their investment in Retail Obligations shall be as set
forth in the Short-Term Retail PSA.
(b) Wholesale. The rate of return or yield due to the Banks on
all or any portion of their investment in Wholesale Pooled Property shall
be as set forth in the Short-Term Wholesale Series Supplement.
2.11 Pro Rata Treatment and Payments.
(a) Pro Rata Treatment. Each Purchase hereunder, each payment
by CCCL on account of any Facility Fees and Utilization Fees hereunder and
any reduction of the Short-Term Commitment Amount shall be made according
to the respective Purchase Percentages of each of the Banks.
(b) Payments to Agent. All payments (including prepayments) by
any CCCL Party shall be made to the Agent for the account of the Banks or
the Agent, as applicable, by 2:00 p.m., Toronto time, at the office of the
Agent referred set out in the signature pages hereto in Dollars, in
immediately available funds and without set-off or counterclaim.
(c) Distribution of Payments by Agent. The Agent shall promptly
distribute such payments to each Bank entitled to receive a portion thereof
in accordance with the terms and conditions of this Short-Term RPA, the
Short-Term Retail PSA and the Short-Term Wholesale Series Supplement at the
respective office of each such Bank in Toronto set out opposite such Bank's
name on the signature pages hereto and in any event any payments received
by the Agent from the Seller by 2:00 p.m., Toronto time, on any day will be
distributed to each Bank by 4:00 p.m., Toronto time, on the same day.
2.12 Addition of Wholesale Sellers.
(a) Subject to the terms and conditions hereof, from time to
time a Designated Affiliate may become an additional Wholesale Seller (an
"Additional Wholesale Seller") provided that:
(i) the conditions precedent set forth in Section 7.04(b)
of the Wholesale PSA have been satisfied;
(ii) the Designated Affiliate executes a Supplement to this
Short-Term RPA and a Wholesale PSA Supplement to the
Wholesale PSA; and
(iii) the Designated Affiliate executes a Wholesale
Assignment and Assumption Agreement, in form and
substance satisfactory to the Agent.
(b) A Designated Affiliate shall become an Additional Wholesale
Seller effective on the date (the "Additional Seller Date") that the Agent
has received a certificate of a Responsible Officer of CCCL stating that
all conditions precedent to the addition of such Wholesale Seller as a
party have been satisfied. From and after the Additional Seller Date with
respect to each Additional Wholesale Seller, through but excluding the
Additional Seller Date with respect to any successive Additional Wholesale
Seller, all Wholesale Purchases shall be made from the Active Wholesale
Seller.
(c) CCCL hereby unconditionally and irrevocably covenants and
agrees that it will cause each Additional Wholesale Seller duly and
punctually to perform and observe all of the terms, conditions, covenants,
agreements and indemnities of each Additional Wholesale Seller under this
Short-Term RPA and the Related Documents strictly in accordance with the
terms hereof and thereof, and that if for any reason whatsoever, any such
Additional Wholesale Seller shall fail to so perform and observe such
terms, conditions, covenants, agreements and indemnities, CCCL will duly
and punctually perform and observe the same. The provisions of Sections
6.2, 6.3 and 6.4 of this Short-Term RPA shall apply mutatis mutandis to
this guarantee by CCCL.
ARTICLE III- REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Short-Term RPA and to
make the Purchases, each of CCCL and the Guarantor hereby represents and
warrants to the Agent and each Bank, in addition to and not in substitution
for, the representations and warranties contained in the Related Documents,
as follows:
3.1 Corporate Existence; Compliance with Law. Each CCCL Party is:
(a) duly incorporated and organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation and organization;
(b) has the corporate power and authority, and the legal right,
to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it
is currently engaged;
(c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of
its business requires such qualification, except where the
failure so to qualify could not, have a Material Adverse
Effect; and
(d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not have a
Material Adverse Effect.
3.2 Corporate Power; Authorization; Enforceable Obligations.
Each CCCL Party has the corporate power and authority, and the legal right,
to make, deliver and perform this Short-Term RPA and the Related Documents
and has taken all necessary corporate action to authorize the Purchases on
the terms and conditions of this Short-Term RPA and the Related Documents
and to authorize the execution, delivery and performance of this Short-Term
RPA and the Related Documents. No consent or authorization of, filing with
or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Purchases hereunder or with the
execution, delivery, performance, validity or enforceability of this Short-
Term RPA or the Related Documents, except such consents, authorizations or
filings as have been obtained or made. This Short-Term RPA has been, and
each Related Document will be, when executed and delivered, duly executed
and delivered on behalf of each CCCL Party party thereto. This Short-Term
RPA constitutes, and each Related Document when executed and delivered will
constitute, a legal, valid and binding obligation of each CCCL Party party
thereto, enforceable against such CCCL Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
3.3 No Conflict. The execution, delivery and performance of
this Short-Term RPA and the Related Documents, the Purchases hereunder and
the use of the proceeds thereof will not violate, conflict with, or result
in a breach of, the Constating Documents, any Requirement of Law or any
Contractual Obligation of any CCCL Party.
3.4 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of CCCL or the Guarantor, threatened by or against any
CCCL Party or against any of its properties or revenues:
(a) with respect to this Short-Term RPA or the Related Documents
or any of the transactions or arrangements contemplated
hereby or by the Related Documents (including without
limitation, with respect to the income, large corporations
or capital tax attributes or consequences of the
transactions or arrangements contemplated hereby or by the
Related Documents or the Retail Obligations or the Wholesale
Pooled Property or the filing positions taken by any CCCL
Party with respect thereto under any federal or provincial
income, large corporations or capital tax legislation), or
(b) which could have a Material Adverse Effect.
3.5 No Default. No Commitment Termination Event has occurred
and is continuing.
3.6 Voting Control. CCCL legally and beneficially owns all of
the issued and outstanding shares of each class of Voting Capital Stock of
each Designated Affiliate which is an Additional Wholesale Seller. The
Guarantor legally and beneficially owns all the issued and outstanding
shares of each class of Voting Capital Stock of CCCL.
ARTICLE IV - CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of Short-Term RPA. This Short-
Term RPA shall become effective on the date (the "Replacement Effective
Date") which is the latest of May 23, 1994 and the dates on which the
conditions to the effectiveness of the Short-Term Retail PSA set forth
therein shall have been satisfied, on which the conditions to the
effectiveness of the Short-Term Wholesale Series Supplement and the issue
of the Short-Term Wholesale Certificates set forth in the Short-Term
Wholesale Series Supplement and the Wholesale PSA shall have been satisfied
and on which the Agent shall have received the following all in form and
substance satisfactory to the Agent:
(a) evidence satisfactory to the Agent that the Aggregate
Combined Commitment Amount shall be no less than
$250,000,000 on the Replacement Effective Date;
(b) the 1993 Termination Agreement, executed and delivered by a
Responsible Officer of each party to the 1993 RPA;
(c) this Short-Term RPA, executed and delivered by a duly
authorized officer of each CCCL Party party hereto and of
each of the Banks listed on the signature pages hereto;
(d) the Long-Term RPA, executed and delivered by a duly
authorized officer of each CCCL Party party thereto and of
each of the Banks listed on the signature pages thereto;
(e) (i) the Short-Term Retail PSA, executed and delivered by a
duly authorized officer of each CCCL Party party
thereto, and of each Bank listed on the signature pages
hereto, and
(ii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Short-Term
Retail PSA set forth therein have been satisfied;
(f) (i) the Long-Term Retail PSA, executed and delivered by a
duly authorized officer of each CCCL Party party
thereto, and of each Bank listed on the signature pages
thereto, and
(ii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Long-Term Retail
PSA set forth therein have been satisfied;
(g) (i) the Short-Term Wholesale Series Supplement, executed
and delivered by a duly authorized officer of the
Wholesale Custodian, each CCCL Party party thereto and
each Bank listed on the signature pages hereto,
(ii) the Short-Term Wholesale Certificates duly issued,
executed and authenticated by the Wholesale Custodian,
and
(iii) certificates of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Short-Term
Wholesale Series Supplement and the issue of the Short-
Term Wholesale Certificates set forth in the Short-Term
Wholesale Series Supplement and in the Wholesale PSA
have been satisfied;
(h) (i) the Long-Term Wholesale Series Supplement, executed and
delivered by a duly authorized officer of the Wholesale
Custodian, each CCCL Party party thereto and each Bank
listed on the signature pages thereto,
(ii) the Long-Term Wholesale Certificates duly issued,
executed and authenticated by the Wholesale Custodian,
and
(iii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of each Long-Term
Wholesale Series Supplement and the issue of the Long-
Term Wholesale Certificates set forth each Long-Term
Wholesale Series Supplement and in the Wholesale PSA
have been satisfied;
(i) a copy of the resolutions of the board of directors (or the
executive committee thereof) of each CCCL Party authorizing
the execution, delivery and performance of this Short-Term
RPA and the other Related Documents to which it is a party,
certified by the Secretary or an Assistant Secretary of such
CCCL Party;
(j) true and complete copies of the Constating Documents of each
CCCL Party, certified as complete and correct copies thereof
by the Secretary or an Assistant Secretary of such CCCL
Party;
(k) a certificate of a Responsible Officer of each CCCL Party
that the consummation of the transactions contemplated
hereby will not contravene, violate or conflict with, as to
any CCCL Party, the Constating Documents, any Requirement of
Law or any Contractual Obligation of such Person;
(l) a certificate of a Responsible Officer of each CCCL Party,
(i) attaching copies of all consents, authorizations and
filings referred to in Section 3.2, and
(ii) stating that such consents, authorizations and filings
are in full force and effect;
(m) the favourable written opinion of the general counsel of the
Guarantor, substantially in the form of Schedule 4.1(m)(i)
and the favourable written opinion of counsel to CCCL
substantially in the form of Schedule 4.1(m)(ii); and
(n) an acknowledgement from CCCL and the Wholesale Custodian to
the effect that the Wholesale Custodian has no beneficial
interest in the Wholesale Pooled Property, substantially in
the form of Schedule 4.1(n).
4.2 Notice of Replacement Effective Date. Upon satisfaction of
the conditions set forth in Section 4.1, the Agent shall deliver to each
CCCL Party and Bank a notice stating that such conditions have been
satisfied and setting forth the Replacement Effective Date and the 1993
Short-Term Carried-Over Invested Amount, if any (including a specification
of the "Wholesale Amount Outstanding" and the "Retail Amount Outstanding",
if any, (each as defined in the 1993 RPA)).
4.3 Failure to Reach Replacement Effective Date. If all the
conditions set forth in Section 4.1 have not been satisfied on or prior to
June 30, 1994, this Short-Term RPA shall be of no further force and effect
unless each of the Banks listed on the signature pages hereto on or prior
to such date shall have consented, in writing, to an extension of such
date.
4.4 Conditions to Each Purchasee. The obligation of each Bank
to make any Purchase requested to be made by it on any Purchase Date
(including, without limitation, its initial Purchase) is subject to the
satisfaction of all the conditions precedent set forth in the Short-Term
Retail PSA with respect to Retail Purchases, all the conditions precedent
set forth in the Short-Term Wholesale Series Supplement with respect to
Wholesale Purchases, and the following conditions with respect to all
Purchases (including, in each case, receipt by the Agent from the Banks of
all amounts required to be paid to the Agent in respect of the Purchases):
(a) no Commitment Termination Event, nor any event which, with
the giving of notice, the lapse of time, or both, or the
satisfaction of any other condition, would be a Commitment
Termination Event, shall have occurred and be continuing;
(b) no Credit Event of Default nor any event which, with the
giving of notice, the lapse of time, or both, or the
satisfaction of any other condition, would be a Credit Event
of Default, shall have occurred and be continuing;
(c) the representations and warranties set forth in Article III
and in the Related Documents shall be true and correct in
all material respects on and as of such Purchase Date;
(d) no CCCL Party shall be in default in the payment of any
amount hereunder or in the observance or performance of any
covenant or other agreement contained in this Short-Term
RPA, the Related Documents or the Revolving Credit
Agreement;
(e) neither CCCL nor the Guarantor shall be in default (i) in
the payment of interest on any Indebtedness of, or assumed
by, such Person, in excess of $5,000,000 principal in the
case of CCCL or U.S. $20,000,000 principal in the case of
the Guarantor, which default shall have continued for a
period of 5 days, or (ii) in payment of the principal of any
such Indebtedness when due;
(f) no default shall have occurred and be continuing with
respect to, or under any instrument securing or providing
for the issuance of, Indebtedness of, or assumed by, CCCL or
the Guarantor which default shall have continued unremedied
for a period to permit acceleration of the maturity of such
Indebtedness;
(g) receipt by the Agent on such Purchase Date of the following
all in form and substance satisfactory to the Agent:
(i) a certificate of a Responsible Officer of CCCL stating
that the conditions set forth in this Section 4.4 have
been satisfied;
(ii) the favourable written opinion of counsel for the
applicable Seller, dated the relevant Purchase Date,
substantially in the form of Exhibit D to the Short-
Term Retail PSA and Exhibit E to the Short-Term
Wholesale Series Supplement, as applicable, and
covering such other legal matters as the Banks or their
counsel may reasonably request;
(iii) a certificate executed by a Responsible Officer of the
Seller, dated the relevant Purchase Date, to the effect
that all instruments required by applicable legislation
to be registered or filed in order to protect, perfect
and preserve the rights of the Banks in all the Retail
Obligations which are being sold by the Seller to the
Banks on such Purchase Date and the Purchased Property
have been or will be, within the time prescribed by the
applicable legislation, duly executed by the required
parties thereto and registered and filed in each
appropriate office in each applicable jurisdiction
(which certificate shall also have annexed thereto a
schedule setting forth each such instrument and each
such office in which such registrations or filings have
been or will be made and such certificate shall also
state that such instruments are the only instruments
required and such offices are the only offices in which
registration or filing is required by applicable
legislation in order to protect, perfect and preserve
the interest of the Banks in such Retail Obligations
and the Purchased Property against all creditors of and
purchasers from the Seller);
(h) all legal matters incident to the execution and delivery of
this Short-Term RPA and to the Retail Purchases and
Wholesale Purchases shall be satisfactory to counsel for the
Banks;
(i) the Period Losses as determined as of the Distribution Date
next preceding the Distribution Date next preceding such
Purchase Date, for the 12 month period immediately preceding
the date of determination shall not have exceeded 2% of the
average unpaid balance of the Total Portfolio during the 12
month period immediately preceding such date of
determination; and
(j) there shall have occurred no change in CCCL's retail credit
quality system that would result in a material adverse
change in the quality of the Retail Obligations and no
change in CCCL's dealer grading and credit policies or
CCCL's policies relating to demonstration vehicles that
would result in a material adverse change in the quality of
the Wholesale Obligations.
ARTICLE V - COVENANTS
In addition to and not in substitution for the covenants
contained in the Related Documents, CCCL and the Guarantor hereby agree
that, so long as the Commitments remain in effect, there is any Short-Term
Aggregate Invested Amount outstanding, any Short-Term Wholesale Certificate
remains outstanding or any amount is owing to any Bank or the Agent
hereunder or under any of the Related Documents, CCCL and the Guarantor
shall and shall cause each of the other CCCL Parties to comply with the
following, as applicable:
5.1 Notices. CCCL shall promptly give notice to the Agent of
the occurrence of any Commitment Termination Event, any Wholesale Early
Amortization Event, any "Early Amortization Event" under, and as defined
in, any series supplement issued pursuant to the Wholesale PSA (other than
the Short-Term Wholesale Series Supplement) and any event which, with the
giving of notice, the lapse of time, or both, or the satisfaction of any
other condition would be a Commitment Termination Event, Credit Event of
Default, Wholesale Early Amortization Event, or Early Amortization Event.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of CCCL and the applicable CCCL Party setting forth
details of the occurrence referred to therein and stating what action, if
any, CCCL or the applicable CCCL Party proposes to take with respect
thereto.
5.2 Voting Control. CCCL shall maintain legal and beneficial
ownership of all the issued and outstanding shares of each class of Voting
Capital Stock of each Designated Affiliate which becomes an Additional
Wholesale Seller. The Guarantor shall maintain legal and beneficial
ownership of all of the issued and outstanding shares of each class of
Voting Capital Stock of CCCL.
5.3 (a) Activities of the Seller. No Additional Wholesale Seller
will engage in any business or activity of any kind or enter into any
transaction other than
(i) the business, activities and transactions contemplated
and authorized by this Short-Term RPA or the Related
Documents, or
(ii) the business of acquiring, selling or financing
wholesale and retail receivables and related activities
and transactions
(such business, activities and transactions, collectively, "Permitted
Transactions").
(b) Indebtedness. No Additional Wholesale Seller will create,
incur or assume any Indebtedness or issue any securities or sell or
transfer any receivables to any Person which issues securities in respect
of any such receivables other than the Custodian under the Wholesale PSA,
unless
(i) such Indebtedness or securities have no recourse to any
assets of the Additional Wholesale Seller other than
the specified assets to which such Indebtedness or
securities relate, and
(ii) the Rating Agency Condition shall have been satisfied
in connection therewith prior to the incurrence or
issuance thereof.
(c) Guarantees. No Additional Wholesale Seller will become or
remain liable, directly or contingently, in connection with any
indebtedness or other liability of any other Person, whether by guarantee,
endorsement (other than endorsements of negotiable instruments for deposit
or collection in the ordinary course of business), agreement to purchase or
purchase, agreement to supply or advance funds, or otherwise, except in
connection with Permitted Transactions and unless the Rating Agency
Condition shall have been satisfied with respect thereto.
(d) Investments. No Additional Wholesale Seller will make or
suffer to exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of Indebtedness, acquisition
of the business or assets, or otherwise) in, any Affiliate, unless prior
thereto the Rating Agency Condition shall have been satisfied with respect
thereto.
(e) Agreements. No Additional Wholesale Seller will become a
party to, or permit any of its properties to be bound by, any indenture,
mortgage, instrument, contract, agreement, lease or other undertaking,
except this Short-Term RPA, the Related Documents and any document related
to a Permitted Transaction, or amend or modify its Constating Documents or
cancel, terminate, amend, supplement, modify or waive any of the provisions
of any Related Documents or request, consent or agree to or suffer to exist
or permit any such cancellation, termination, amendment, supplement,
modification or waiver unless, in any such case, the Rating Agency
Condition shall have been satisfied with respect thereto.
(f) Maintenance of Separate Existence. Each Additional
Wholesale Seller shall do all things necessary to maintain its corporate
existence separate and apart from CCCL, the Guarantor and other Affiliates
of the Additional Wholesale Seller, including, without limitation,
(i) practicing and adhering to corporate formalities, such
as maintaining appropriate corporate books and records;
(ii) maintaining all of its deposit and other bank accounts
and all of its assets separate from those of any other
Person;
(iii) maintaining all of its financial records separate and
apart from those of any other Person;
(iv) accounting for and managing all of its liabilities
separately from those of any of its Affiliates;
(v) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or
other insolvency proceeding involving the Additional
Wholesale Seller, CCCL, the Guarantor, or any other
Affiliate of the Additional Wholesale Seller, to
substantively consolidate the Additional Wholesale
Seller with CCCL, the Guarantor or any other Affiliate
of the Additional Wholesale Seller;
(vi) conducting transactions with its Affiliates only on an
arm's length basis; and
(vii) conducting all of its business (whether written or
oral) solely in its own name.
5.4 Accounting. No CCCL Party will prepare any financial
statements which shall account for nor will they in any other respect
account for the transactions contemplated hereby in a manner which is
inconsistent with the Banks' ownership of the Retail Obligations or the
Banks' undivided ownership interests in the Wholesale Pooled Property.
5.5 Collateral Protection Insurance. The Seller will, in
accordance with CCCL's customary practices and procedures, ensure that the
obligors under the Retail Obligations and the Wholesale Obligations
maintain collateral protection insurance.
ARTICLE VI - GUARANTEE
6.1 Guarantee. The Guarantor hereby unconditionally and
irrevocably covenants and agrees that it will cause CCCL, each Seller and
the Servicer duly and punctually to perform and observe all of the terms,
conditions, covenants, agreements and indemnities of CCCL, each Seller and
the Servicer under this Short-Term RPA and the Related Documents strictly
in accordance with the terms hereof and thereof, and that if for any reason
whatsoever any such Person shall fail to so perform and observe such terms,
conditions, covenants, agreements and indemnities, the Guarantor will duly
and punctually perform and observe the same.
6.2 Absolute and Unconditional Obligations. The liabilities and
obligations of the Guarantor under this Guarantee shall be absolute and
unconditional under all circumstances and shall be performed by the
Guarantor regardless of:
(a) whether the Banks shall have taken any steps to collect from
CCCL, each Seller and the Servicer any of the amounts
payable by such Person to the Banks under this Short-Term
RPA or the Related Documents or shall have otherwise
exercised any of their rights or remedies under this Short-
Term RPA against such Person or against any obligor under
any of the Retail Obligations or the Wholesale Obligations;
(b) the validity, legality or enforceability of this Short-Term
RPA or of any of the Related Documents, or the disaffirmance
of any thereof in any insolvency, bankruptcy or
reorganization proceedings relating to any such Person;
(c) any law, regulation or decree now or hereafter in effect
which might in any manner affect any of the terms or
provisions of this Short-Term RPA or any Related Document or
any of the rights of the Banks as against any such Person or
which might cause or permit to be invoked any alteration in
the time, amount, manner of payment or performance of this
Short-Term RPA or any Related Document;
(d) the merger or consolidation or amalgamation of any such
Person into or with any corporation or any sale or transfer
by such Person of all or any part of its property; and
(e) any other circumstances whatsoever (with or without a notice
to or knowledge of the Guarantor) which may or might in any
manner or to any extent vary the risk of the Guarantor, or
might otherwise constitute a legal or equitable discharge of
a surety or guarantor; it being the purpose and intent of
the Guarantor that the liabilities and obligations of the
Guarantor under this Guarantee shall be absolute and
unconditional under any and all circumstances, and shall not
be discharged except by payment and performance as provided
in this Short-Term RPA.
6.3 Discretion of Banks. Without in any way affecting or
impairing the liabilities and obligations of the Guarantor under this
Guarantee, the Banks may at any time and from time to time in their
discretion, without the consent of, or notice to the Guarantor:
(a) extend or change the time, manner, place or terms of payment
of any or all of the amounts payable by CCCL, each Seller
and the Servicer to the Banks under this Short-Term RPA or
the Related Documents or amend, supplement, waive, extend or
otherwise modify any of the terms of this Short-Term RPA or
the Related Documents; and
(b) settle or compromise any of the amounts payable by CCCL,
each Seller and the Servicer to the Banks under this Short-
Term RPA or the Related Documents or subordinate the same to
the claims of others.
6.4 General. The provisions of this Guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time payment
of any of the amounts payable by CCCL, each Seller and the Servicer to the
Banks under this Short-Term RPA or the Related Documents is rescinded or
must otherwise be restored or returned by the Banks upon the insolvency,
bankruptcy or reorganization of any such Person, or otherwise, all as
though such payment had not been made. The Guarantor hereby waives:
(a) notice of the occurrence of any default hereunder;
(b) any requirement of diligence or promptness on the part of
the Banks in making demand, commencing suit or exercising
any other right or remedy under this Short-Term RPA or the
Related Documents, or otherwise; and
(c) any right to require the Banks to exercise any right or
remedy against any such Person prior to enforcing any of its
rights against the Guarantor under this Guarantee.
ARTICLE VII - COMMITMENT TERMINATION EVENTS
7.1 Commitment Termination Events: If any of the following
events shall occur and be continuing:
(a) any Wholesale Early Amortization Event described in Section
9.01 of the Wholesale PSA or in Section 7.1(c) of the Short-
Term Wholesale Series Supplement shall occur;
(b) if the Wholesale PSA is amended, modified or supplemented
without the prior written consent of the Required Banks
whether or not such consent is required by the terms of the
Wholesale PSA, provided that this clause 7.1(b) shall not
apply to any amendment, modification or supplement which is
permitted to be made under the terms of the Wholesale PSA
without the consent of any of the investors under any of the
series supplements to the Wholesale PSA;
(c) any Credit Event of Default shall occur;
(d) any CCCL Party shall fail to pay any amount payable
hereunder, within 5 Business Days after any such amount
becomes due in accordance with the terms hereof;
(e) any representation or warranty made by any CCCL Party herein
or in any other Related Document or which is contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with this
Short-Term RPA shall prove to have been incorrect in any
material respect on or as of the date made except a
representation and warranty contained in Section 2.04 of the
Wholesale PSA or in Section 5.1 of the Short-Term Retail PSA
if the Seller has repurchased the Wholesale Obligations or
the Retail Obligations, as applicable, in respect of which
the representations and warranties were made;
(f) any CCCL Party shall default in the observance or
performance of any covenant or other agreement contained in
this Short-Term RPA or any Related Document and such default
continues unremedied for a period of 30 days;
(g) the giving of any notice of an intention to commence or the
commencement of any voluntary or involuntary case or
proceeding under any bankruptcy, insolvency, incorporation
or other law now or hereafter in effect of any jurisdiction
for the:
(i) bankruptcy, liquidation, winding-up, dissolution or
suspension of general operations of,
(ii) composition, rescheduling, reorganization, arrangement
or readjustment of, or other relief from, or stay of
proceedings to enforce, some or all of the debts of,
(iii) appointment of a trustee, receiver, receiver and
manager, liquidator, administrator, custodian or other
official for, or for all or a material part of the
assets of, or
(iv) possession, foreclosure or retention, or sale or other
disposition of, or other proceedings to enforce
security over, all or a material part of the assets of,
any CCCL Party or the taking of any action by any CCCL Party
in furtherance of or indicating its consent to, approval of,
or acquiescence in, any of the foregoing;
(h) any CCCL Party shall be unable to or shall admit its
inability to, pay its debts as such debts become due, or is,
or is adjudged or declared to be, or shall admit to being,
bankrupt or insolvent;
(i) a writ, execution or attachment or similar process is issued
or levied against all or a material part of the property of
any CCCL Party in connection with any judgment against such
CCCL Party, in any amount which affects property of such
CCCL Party;
(j) any secured creditor, encumbrancer or lienor, or any
trustee, receiver, receiver and manager, agent, bailiff or
other similar official appointed by or acting for any
secured creditor, encumbrancer or lienor, takes possession
of, or forecloses or retains, or sells or otherwise disposes
of, all or a material part of the assets of any CCCL Party
or any such Person gives notice of its intention to do so;
or
(k) any CCCL Party suspends or ceases, or takes any corporate
action to suspend or cease, its business;
then, and in any such event, (A) if such event is an event specified in
Section 7.1(g), 7.1(h), 7.1(i), 7.1(j) or 7.1(k), the Commitments shall
immediately terminate without notice of any kind, which is hereby waived by
the CCCL Parties and (B) if such event is any other event specified in this
Article, so long as such event shall be continuing, the Agent may, with the
consent of the Required Banks, or the Agent shall, upon the request of the
Required Banks, declare by notice to CCCL that the Commitments are
terminated forthwith, whereupon the Commitments shall immediately
terminate.
ARTICLE VIII - THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Royal as the agent of such Bank under this Short-Term RPA and the
Related Documents and each such Bank irrevocably authorizes Royal, as the
agent for such Bank to take such action on its behalf under the provisions
of this Short-Term RPA and the Related Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by
the terms of this Short-Term RPA and the Related Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary in this Short-Term RPA, the Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Short-Term RPA or any Related Document or otherwise
exist against the Agent.
8.2 Delegation of Duties. The Agent may perform any of its
duties under this Short-Term RPA and the Related Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-
fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates
(except the Custodian in its capacity as such) shall be:
(a) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with this Short-
Term RPA or any Related Document (except for its or such
Person's own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by
any CCCL Party or any officer thereof contained in this
Short-Term RPA or any Related Document or in any
certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in
connection with, this Short-Term RPA or any Related Document
or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Short-Term RPA or any
Related Document or for any failure of any CCCL Party to
perform its obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Short-Term RPA or any
Related Document, or to inspect the properties, books or records of any
CCCL Party.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any
CCCL Party), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Short-Term RPA or any Related Document unless it
shall first receive such advice or concurrence of the Required Banks as it
deems appropriate and be indemnified to its satisfaction by the Banks
against any and all Liabilities and Costs which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Short-Term RPA and the Related Documents in accordance with a request
of the Required Banks, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Banks.
8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Commitment Termination Event
hereunder unless the Agent has received notice from a Bank or a CCCL Party
referring to this Short-Term RPA, describing such Commitment Termination
Event and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give notice thereof
to the Banks. The Agent shall take such action with respect to such
Commitment Termination Event as shall be reasonably directed by the
Required Banks; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Commitment Termination Event, as it shall deem advisable in the best
interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates (except the Custodian in
its capacity as such) has made any representations or warranties to it and
that no act by the Agent hereinafter taken, including any review of the
affairs of the CCCL Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents
to the Agent that it has, independently and without reliance upon the
Agent, or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the CCCL Parties, the Retail Obligations and the
Wholesale Obligations and made its own decision to make its Purchases
hereunder and enter into this Short-Term RPA and the other Related
Documents to which it is a party. Each Bank also represents that it will,
independently and without reliance upon the Agent, or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Short-Term RPA and the Related
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the CCCL Parties, the Retail Obligations
and the Wholesale Obligations. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, financial or other condition, prospects or
creditworthiness of the CCCL Parties, the Retail Obligations or the
Wholesale Obligations which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification of Agent. The Banks agree to indemnify the
Agent in its capacity as such (to the extent not promptly reimbursed by the
CCCL Parties and without limiting the obligation of the CCCL Parties to do
so), ratably according to their respective Purchase Percentages, from and
against any and all Liabilities and Costs which may at any time (including,
without limitation, at any time following the termination of this Short-
Term RPA and the Related Documents) be imposed on, incurred by or asserted
against the Agent, in any way relating to or arising out of this Short-Term
RPA, any of the Related Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection
with any of the foregoing including without limitation all Liabilities and
Costs imposed on, incurred by, or asserted against the Agent:
(a) in exercising any of the rights and powers which the Agent
may have under or in respect of this Short-Term RPA or any
Related Document or any Retail Obligation or Wholesale
Obligation or any related document or instrument, or in
taking any actions or proceedings to enforce any of the
obligations or liabilities of any CCCL Party under or in
respect of this Short-Term RPA or any Related Document or of
the obligor or any other Person under or in respect of any
Retail Obligation or Wholesale Obligation or any related
document or instrument, or in taking any actions or
proceedings to realize upon or enforce the security or any
of the other rights constituted by any Retail Obligation or
Wholesale Obligation or any related document or instrument;
or
(b) resulting or arising from any claims, demands, suits,
actions or other proceedings brought by or on behalf of any
of the obligors or other parties under or in respect of any
of the Retail Obligations or Wholesale Obligations or the
vehicles financed thereby;
provided that no Bank (other than Royal) shall be liable for the payment of
any portion of such Liabilities and Costs, resulting solely from the
Agent's gross negligence or willful misconduct.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the CCCL Parties as though the Agent were not the
Agent hereunder and under the Related Documents. With respect to any
Interests the Agent in its individual capacity as a Bank may from time to
time hold, the Agent shall have the same rights and powers under this
Short-Term RPA and the Related Documents as any Bank and may exercise the
same as though it were not the Agent, and the terms "Bank" and "Banks"
shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent under this
Short-Term RPA and the Related Documents, then the Required Banks shall
appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by CCCL, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and
the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent
or any of the parties to this Short-Term RPA. After any retiring Agent's
resignation as Agent, the provisions of this Article shall enure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Short-Term RPA and the Related Documents.
8.10 Exchange of Information. The CCCL Parties agree that each
of the Banks and the Agent may provide to any of the others of them such
information concerning the business, operations, property, financial and
other condition and creditworthiness of the CCCL Parties, Retail
Obligations or the Wholesale Obligations, as, in the opinion of such Bank
or the Agent, is relevant under or in connection with this Short-Term RPA
and the Related Documents.
8.11 Netting of Payment. Notwithstanding anything to the
contrary contained in this Short-Term RPA, the Agent may net against any
amount which is payable by the Agent to any Bank pursuant to this Short-
Term RPA, any amount which is payable by such Bank to the Agent pursuant to
this Short-Term RPA.
8.12 Survival. The agreements in this Article VIII shall survive
termination of this Short-Term RPA and the Related Documents.
8.13 For Benefit of Banks Only. The provisions of this Article
relating to the rights and obligations of the Agent and the Banks inter se
shall be operative as between the Agent and the Banks only, and no CCCL
Party shall have any rights hereunder or be entitled to rely for any
purposes upon such provisions.
ARTICLE IX - INDEMNIFICATION
9.1 Payment of Expenses and Taxes. CCCL agrees, on demand:
(a) to pay or reimburse the Agent for its reasonable out-of-
pocket costs and expenses incurred in connection with the
negotiation, preparation, execution and delivery of, and any
amendment, supplement or modification to, this Short-Term
RPA and the Related Documents and any other documents
prepared in connection herewith or therewith, and the
consummation and administration of the transactions
contemplated hereby and thereby, (including, without
limitation, the reasonable fees and disbursements of one
counsel to the Agent and to the several Banks);
(b) to pay or reimburse the Agent for all reasonable fees and
disbursements of counsel to the Agent in connection with the
ongoing administration of this Short-Term RPA and the
Related Documents;
(c) to pay or reimburse the Agent and each Bank for all their
costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Short-
Term RPA, the Related Documents and any such other documents
(including, without limitation, fees and disbursements of
one counsel to the Agent and to the several Banks),
(d) to pay, indemnify, and hold each Bank and the Agent harmless
from, any and all recording and filing fees and any and all
Liabilities and Costs with respect to any licence fees,
duties and taxes (including without limitation any goods and
services, sales, use, stamp, excise, gross receipts or
personal property taxes), and other assessments which may at
any time be payable, if any, or determined to be payable or
asserted in connection with the execution and delivery of,
or consummation or administration of any of the transactions
or arrangements contemplated by, or any amendment,
supplement or modification of, or any waiver or consent
under or in respect of, this Short-Term RPA, the Related
Documents and any such other documents or the Retail
Obligations or the Wholesale Pooled Property,
(e) to pay, indemnify and hold each Bank and the Agent harmless
from and against all Liabilities and Costs arising from the
Retail Contracts and the Wholesale Contracts or the
underlying collateral (including any product warranty
related claims, but excluding credit losses),
(f) to pay, indemnify and hold each Bank and the Agent harmless
from and against all Liabilities and Costs arising from the
inaccuracy or breach of any of the representations and
warranties contained in this Short-Term RPA or the Related
Documents or the failure of any CCCL Party to perform or
observe any covenants, agreements or other terms or
provisions contained in this Short-Term RPA and the Related
Documents, and
(g) to indemnify the Agent and each Bank from and against
Liabilities and Costs (other than legal fees and
disbursements) of any kind whatsoever (and, with respect to
any proceeding or related proceedings, the reasonable fees
and disbursements of one firm of counsel to the relevant
Banks in connection with such proceeding(s)) which may at
any time (including, without limitation, at any time
following repayment of the Short-Term Aggregate Invested
Amount) be imposed on, incurred by or asserted against such
Bank in any way relating to or arising out of this Short-
Term RPA, the Guarantee, the Related Documents or any other
documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any
action taken or omitted by such Bank under or in connection
with any of the foregoing,
(all the foregoing, collectively, the "Indemnified
Liabilities"),
provided, that CCCL shall have no obligation hereunder to
the Agent or any Bank with respect to Indemnified Liabilities arising from
(i) the gross negligence or willful misconduct of the Agent, its Affiliates
or any such Bank, (ii) legal proceedings commenced against the Agent, its
Affiliates or any such Bank by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, or (iii) legal proceedings
commenced against the Agent, its Affiliates or any such Bank by any other
Bank or by any Transferee and further provided, that the Indemnified
Liabilities referred to in (d) shall not include, with respect to any Bank,
any taxes imposed on the net income of such Bank except to the extent that
(i) such taxes are payable by such Bank as a consequence of (A) the
Investor Master Custodial Certificate held by such Bank not being
characterized as evidencing an undivided ownership interest in the
Wholesale Pooled Property or (B) the Custodial Arrangement (as defined in
the Wholesale PSA) not being characterized solely as an agency and (ii) as
a result of such characterization the amount of taxes payable by such Bank
exceeds the amount of taxes that would have been payable had (C) the
Investor Master Custodial Certificates been characterized as evidencing an
undivided ownership interest in the Wholesale Pooled Property or the
Custodial Arrangement and (D) the Custodial Arrangement been characterized
solely as an agency.
9.2 Statements, Reports etc. All statements, reports,
certificates, opinions and other documents or information required to be
furnished to the Banks or the Agent by the Seller under this Short-Term RPA
shall be supplied by the Seller, without cost to the Banks or the Agent.
9.3 Increased Costs. In the event that any Applicable Law or
any change therein or in the interpretation or application thereof or
compliance by any Bank with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
enacted or made subsequent to the date hereof:
(a) does or shall subject such Bank to any Tax, or change
the basis of taxation or increase any existing Tax, on
payments of any amounts payable by the Seller to such
Bank (except for taxes on the overall net income of
such Bank imposed by the jurisdiction in which it is
incorporated or resident or from which it is acting for
the purposes of this Short-Term RPA, but including
taxes on capital or other similar taxes);
(b) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank; or
(c) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
of purchasing or holding any such Bank's Interests hereunder or to reduce
any amount receivable in respect thereof (such increase in costs or
reduction in amounts receivable, "Increased Costs") then, in any such case,
the Seller shall promptly pay to the Agent for the account of such Bank,
upon the written demand of such Bank to the Seller (with a copy to the
Agent), so long as such Increased Costs are not otherwise included in the
amounts required to be paid to such Bank pursuant to Section 9.4, 9.5 or
9.6, any additional amounts necessary to compensate such Bank for such
Increased Costs which such Bank deems to be material as determined by such
Bank with respect to its Purchases. If a Bank becomes entitled to claim
any additional amounts pursuant to this Section, it shall promptly notify
the Seller, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by a Bank, through the Agent,
to the Seller shall be conclusive in the absence of manifest error.
9.4 Reemployment Costs. CCCL agrees to indemnify each Bank and
to hold each Bank harmless from any Liabilities and Costs, including, but
not limited to, any such Liabilities and Costs arising from interest or
fees payable by such Bank to lenders of funds obtained by it to purchase or
hold such Bank's Interests, which such Bank may sustain or incur as a
consequence of:
(a) default by the Seller in the performance of its obligations
hereunder; or
(b) default by the Seller in selling Interests on a Purchase
Date or in converting or continuing the annual rate of
return to or in, as applicable, a rate based on a Bank's BA
Rate, in each case after having given notice of a sale or
electing to have the Bank's BA Rate applied; or
(c) the application of any collections in reduction of such
Bank's investment in the Interests at any time such that any
portion of the Short-Term Aggregate Invested Amount in
respect of which the Seller elects to have the rate of
return based on a Bank's BA Rate for bankers' acceptances
maturing over a period of time ending on a Distribution Date
does not remain outstanding during the entire period for
which such Bank's BA Rate is to apply, or
(d) the Exact Retail Amount Due (as defined in the Short-Term
Retail PSA) upon Retail Obligations purchased by the Bank on
a Fixed Rate basis being different from the Estimated Retail
Amount Due (as defined in the Short-Term Retail PSA) upon
such Retail Obligations. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted
by a Bank to CCCL shall be conclusive absent manifest error.
9.5 Changes in Capital Requirements.
(a) In the event that, in the opinion of counsel for any Bank
(which may, in the discretion of such Bank, be such Bank's internal
counsel), compliance with any law, rule, regulation or guideline, or any
change therein or in the interpretation or application thereof, or
compliance by any Bank with any request or directive from any central bank
or Governmental Authority (whether or not such requirement has the force of
law) enacted or made subsequent to the date hereof shall affect the amount
of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and the amount of such capital that is
required or expected to be maintained is increased by or based upon the
Commitment of such Bank under this Short-Term RPA (such requirement, a
"Change in Capital Requirement"), such Bank shall so notify CCCL and the
Agent within one-hundred eighty (180) days after such Bank shall have
obtained actual knowledge of the costs associated with its compliance with
such Change in Capital Requirement (but in no event later than 365 days
after such Bank is first required to comply with such Change in Capital
Requirement).
(b) At the time of such notification such affected Bank shall
provide CCCL and the Agent with a written statement setting forth the
amount that would adequately compensate such affected Bank for the
Liabilities and Costs associated with its compliance with such Change in
Capital Requirement and setting forth in reasonable detail the assumptions
upon which such affected Bank calculated such amount and a copy of the
opinion of counsel for the Bank referred to in the preceding paragraph.
(c) Such affected Bank shall allocate to the Seller the
Liabilities and Costs associated with such Change in Capital Requirement in
such a way that the proportion of (i) such Liabilities and Costs that are
allocated to the Seller to (ii) the total of such Liabilities and Costs of
such affected Bank associated with such Change in Capital Requirement as it
relates to all commitments of such Bank to its customers of similar
creditworthiness as the Seller, is substantially the same as the proportion
of (i) the Commitment of such affected Bank under this Short-Term RPA to
(ii) the total of all commitments by such affected Bank to its customers of
similar creditworthiness as the Seller.
(d) CCCL and such affected Bank shall thereafter negotiate in
good faith an agreement to increase that portion of the Facility Fees
payable to such affected Bank under Section 2.6 of this Short-Term RPA,
which, in the opinion of such affected Bank, will adequately compensate
such affected Bank for such costs. If such increase is approved in writing
by CCCL within ninety (90) days from the date of the notice to CCCL from
such affected Bank, the Facility Fees payable by CCCL shall include the
amount of such agreed increase (but subject to subsection 9.5(e)), and CCCL
will so notify the Agent. If CCCL and such affected Bank are unable to
agree on such an increase within ninety (90) days from the date of the
notice to CCCL from such affected Bank, CCCL shall by written notice to
such affected Bank within one hundred and twenty (120) days from the date
of the aforesaid notice to CCCL from such affected Bank, elect either to
(i) terminate the Commitment of such affected Bank (each such Bank, a
"Terminated Bank") (subject to subsection 9.5(e)) or (ii) (subject to
subsection 9.5(e)) increase the Facility Fees payable to such affected Bank
by the amount requested by such affected Bank, and CCCL will so notify the
Agent. Without limiting the foregoing, if CCCL elects to take the action
described in clause (ii) of the preceding sentence, it may simultaneously
therewith reduce the Commitment of such affected Bank by an amount chosen
by CCCL. If CCCL fails to provide notice to such affected Bank as
described in the second preceding sentence by such one hundred twentieth
day, CCCL shall be deemed to have taken the action described in clause (ii)
of such second preceding sentence without reduction of the Commitment of
such affected Bank.
(e) CCCL (A) may from time to time after such one hundred
twentieth day reduce the compensation to be received pursuant to this
Section 9.5 by any affected Bank as a result of any Change in Capital
Requirement, to the average compensation (the "Average Compensation") CCCL
has agreed, as provided above, to pay the affected Banks as a result of
such Change in Capital Requirement (such average compensation to be
measured by a percentage of the aggregate Commitments of such affected
Banks) and (B) shall pay to each Terminated Bank an amount equal to the
excess, if any, of (i) the lesser of (I) the aggregate Facility Fees that
would have been payable to such Terminated Bank from the date of such
Terminated Bank's notice to CCCL pursuant to this Section 9.5 to the date
the Commitment of such Terminated Bank is terminated had such Facility Fees
been determined by reference to the Average Compensation, and (II) the
aggregate Facility Fees that would have been payable to such Terminated
Bank during such period had such Facility Fees been increased by an amount
necessary to adequately compensate such Terminated Bank (as determined by
such Terminated Bank in accordance with the applicable provisions of this
Section 9.5) for the costs attributable to the relevant Change in Capital
Requirement, over (ii) the aggregate Facility Fees actually paid to such
Terminated Bank during such period.
(f) On the day the Commitment of a Terminated Bank is terminated
pursuant to subsection 9.5(d), (i) the Seller shall pay in full any accrued
and unpaid Facility Fees, Utilization Fees or other amounts owing to such
Terminated Bank hereunder, and (ii) notwithstanding such termination, CCCL
and CFC shall continue to remain fully liable to such Terminated Bank for
the satisfaction of all obligations and the payment of all amounts due or
to become due under this Short-Term RPA and the relevant Related Documents
(except for Facility Fees and Utilization Fees) as if such Commitment had
not been terminated until all such obligations have been satisfied and all
such amounts paid in full; and (iii) CCCL shall pay to the Terminated Bank
on each date on which the Facility Fees would have been payable to such
Terminated Bank had such Commitment not been terminated an amount equal to
the increase in such Terminated Bank's portion of the Facility Fees which
such Terminated Bank requested pursuant to subsection 9.5(d), adjusted to
give effect to the termination of such Terminated Bank's Commitment, during
the remaining term of this Short-Term RPA so long as the Terminated Bank's
investment in Retail Obligations or Wholesale Pooled Property remains
greater than zero.
(g) Upon the occurrence of any Change in Capital Requirement,
any Bank whose commitment hereunder is affected by such Change in Capital
Requirement shall transfer its commitment to another branch office (or, if
such Bank so elects, to an Affiliate) of such Bank, provided that such
transfer shall be made only if such Bank shall have determined in good
faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (i) on the basis of existing
circumstances, such transfer will avoid the increased costs resulting from
such Change in Capital Requirement and will not result in any additional
Liabilities and Costs to such Bank or to CCCL (unless CCCL agrees to pay
such additional Liabilities and Costs of such Bank or CCCL, as the case may
be) and (ii) such transfer is otherwise consistent with the interests of
such Bank. A transfer of a Bank's Commitment pursuant to this subsection
9.5(g) shall be effected pursuant to the provisions of Section 10.8,
provided that no consent to such transfer shall be required from the Seller
or the Agent.
9.6 Replacement of Banks
The Seller shall be permitted to replace any Bank which (a)
requests reimbursement for amounts owing pursuant to Section 9.3 and as a
result thereof any of the actions described in such Section is required to
be taken, (b) defaults in its obligation to make Purchases hereunder, or
(c) ceases to be a party to the Revolving Credit Agreement, provided that
(i) such replacement does not conflict with any Applicable Law, (ii) no
Commitment Termination Event shall have occurred and be continuing at the
time of such replacement, (iii) the Seller shall be liable to such
replaced Bank under subsection 9.4(c) to the extent such replaced Bank
incurs any Liabilities or Costs contemplated in such subsection as a result
of such replacement, (iv) the replacement Bank, if not already a Bank, and
the terms and conditions of such replacement, shall be reasonably
satisfactory to the Agent, (v) the replaced Bank shall be obligated to make
such replacement in accordance with the provisions of Section 10.8, (vi)
until such time as such replacement shall be consummated, the Seller shall
pay all additional amounts (if any) required pursuant to Sections 9.3 or
9.5, as the case may be, and (vii) any such replacement shall not be deemed
to be a waiver of any rights which the Seller, the Agent or any other Bank
shall have against the replaced Bank.
9.7 Survival. The agreements in this Article shall survive the
termination of this Short-Term RPA and the Related Documents and are in
addition to, and not in substitution for, any other indemnification granted
by any CCCL Party in any Related Document.
ARTICLE X - MISCELLANEOUS
10.1 Amendments and Waivers.
(a) Neither this Short-Term RPA, any Related Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section.
(b) With the written consent of the Required Banks, the Agent
and CCCL may, from time to time, enter into written amendments, supplements
or modifications hereto and to the Related Documents for the purpose of
adding any provisions to this Short-Term RPA or the Related Documents or
changing in any manner the rights of the Banks or of the CCCL Parties
hereunder or thereunder or waiving, on such terms and conditions as the
Agent may specify in such instrument, any of the requirements of this
Short-Term RPA or the Related Documents;
provided, however, that no such waiver and no such amendment, supplement or
modification shall
(i) extend the Commitment Period,
(ii) change the Short-Term Commitment Amount,
(iii) change any Bank's Commitment Amount,
(iv) reduce any fee payable to any Bank hereunder,
(v) reduce the rate of return or extend the time for
payment of yield,
(vi) reduce the amount or extend the maturity of any Short-
Term Wholesale Certificate or any instalment thereof,
(vii) change the definition of "Commitment Termination Date"
or "Commitment Termination Event" or its consequences,
(viii) reduce the percentages set forth in "Required
Participation Percentage" or "Subordinated Percentage"
in the Short-Term Wholesale Series Supplement or reduce
the percentage specified in the definition of "Reserve
Fund Required Amount" in the Short-Term Wholesale
Series Supplement,
(ix) change the definition of "Applicable Yield" or
"Deferred Payment" in the Short-Term Retail PSA,
(x) amend, modify or waive any provision of this
subsection,
(xi) reduce the percentage specified in the definition of
Required Banks or waive any of the provisions of
Section 4.4,
(xii) amend, modify or waive any provision of the Guarantee,
or
(xiii) amend the Short-Term Wholesale Series Supplement
without the satisfaction of the Rating Agency Condition
if so required by the Wholesale PSA,
in each case without the consent of each Bank.
(c) Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding
upon the CCCL Parties, the Banks and the Agent. In the case of any waiver,
the CCCL Parties, the Banks and the Agent shall be restored to their former
position and rights hereunder and under the Related Documents, and any
Commitment Termination Event waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other
Commitment Termination Event, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy or telex,
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, certified or registered
mail, or by courier, in the case of telecopy notice, when received, or, in
the case of telex notice, when sent, answerback received, addressed to the
parties as set forth in the signature pages hereto, or to such other
address as may be hereafter notified by the respective parties hereto
provided that any notice, request or demand to or upon the Agent or the
Banks pursuant to Section 2.4 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof.
Nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Short-Term RPA.
10.5 Successors and Assigns. This Short-Term RPA shall be
binding upon and enure to the benefit of the CCCL Parties, the Banks, the
Agent, and their respective successors and assigns, except that no CCCL
Party may assign or transfer any of its rights or obligations under this
Short-Term RPA without the prior written consent of the Required Banks
(other than in connection with an Additional Wholesale Seller pursuant to
the terms hereof).
10.6 Participation. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any
time sell to one or more Chartered Banks ("Participants") participating
interests in any Commitment of such Bank, any Short-Term Wholesale
Certificate or any other Interests of such Bank hereunder. In the event of
any such sale by a Bank of participating interests to a Participant, such
Bank's obligations under this Short-Term RPA to the other parties to this
Short-Term RPA shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof for all purposes under this Short-
Term RPA, and CCCL, the Seller and the Agent shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Short-Term RPA. In the case of a sale by a Bank of
a participating interest in Wholesale Pooled Property represented by a
Short-Term Wholesale Certificate, such Bank shall remain the registered
holder of such Short-Term Wholesale Certificate.
10.7 Optional Sale. The Agent may at any time during the
Commitment Period offer to sell all or any portion of the Banks' Interests
comprising Sold Retail Obligations (as defined in the Short-Term Retail
PSA) for cash (a) if the Short-Term Retail Aggregate Invested Amount (plus
accrued interest, fees and other amounts payable by the Seller hereunder to
the date of such sale) after giving effect to such sale, would be reduced
to zero and (b) if after giving effect to such sale no Service Default (as
defined in the Short-Term Retail PSA) shall be then continuing. Proceeds
of such sale shall be treated as and applied as a collection on account of
Sold Retail Obligations under and in accordance with the Short-Term Retail
PSA. Following the receipt of a bona fide offer to purchase all or any
portion of the Banks' Interests in the said Sold Retail Obligations from
any Person other than the Seller which the Agent wishes to accept (a "Third
Party Offer"), the Agent shall give notice thereof to the Seller, which
notice shall constitute an irrevocable offer to sell such Interests to the
Seller for an amount and on the terms and conditions specified in the Third
Party Offer. The Seller will be under no obligation to accept such offer.
If the Seller does not accept such offer within five (5) Business Days
after receiving notice thereof, the Agent may accept the Third Party Offer.
10.8 Sale of Interests.
(a) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
any Bank, and, with the consent of CCCL and the Agent (which in each case
shall not be unreasonably withheld) to one or more additional Chartered
Banks ("Purchasing Banks") all or a portion of its rights and obligations
under this Short-Term RPA, the Related Documents and the Short-Term
Wholesale Certificates pursuant to a Commitment Transfer Supplement,
executed by such Purchasing Bank, such transferor Bank, the Guarantor and
the Agent (and, in the case of a Purchasing Bank that is not then a Bank,
by CCCL), and delivered to the Agent for its acceptance and recording in
the Register provided that (i) prior to the termination of the Commitments
(whether on the Commitment Termination Date or otherwise), any such sale
shall include a proportionate share of each of such transferor Bank's
Commitments, Retail Obligations and interests in Wholesale Pooled Property,
and after any termination of the Commitments, any such sale may be of any
combination of Retail Obligations and interests in Wholesale Pooled
Property and (ii) the principal amount of such Bank's Commitment so sold
(or, if no Commitments are outstanding, the principal amount of interests
in Wholesale Pooled Property and Retail Obligations so sold) shall be in an
aggregate amount of $3,000,000 or more.
(b) Upon such execution, delivery, acceptance, and recording,
from and after the Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, (i) the Purchasing Bank thereunder shall be
a party hereto and the Related Documents and, to the extent provided in
such Commitment Transfer Supplement, have the rights and obligations of a
Bank hereunder with a Commitment as set forth therein, and (ii) the
transferor Bank thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Short-Term
RPA (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and obligations under
this Short-Term RPA and the Related Documents, such transferor Bank shall
cease to be a party hereto).
(c) Such Commitment Transfer Supplement shall be deemed to amend
this Short-Term RPA to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Bank and the resulting adjustment
of Purchase Percentages arising from the purchase by such Purchasing Bank
of all or a portion of the rights and obligations of such transferor Bank
under this Short-Term RPA and the Related Documents. On or prior to the
Transfer Effective Date determined pursuant to such Commitment Transfer
Supplement, the Wholesale Custodian, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Short-Term Wholesale
Certificate a new Short-Term Wholesale Certificate issued in the name of
such Purchasing Bank pursuant to the Short-Term Wholesale Series Supplement
and, if the transferor Bank has retained Commitments hereunder, a new
Short-Term Wholesale Certificate issued in the name of the transferor Bank.
(d) The Agent shall maintain at its address referred to on the
signature pages hereto or such other address of which the Agent may give
notice in accordance with Section 10.2, a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Banks and the Commitments of,
and principal amount of the Retail Obligations and interests in Wholesale
Pooled Property sold to, each Bank from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
CCCL Parties, the Agent and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Retail Obligations, the
interests in Wholesale Pooled Property and the Short-Term Wholesale
Certificates recorded therein for all purposes of this Short-Term RPA. The
Register shall be available for inspection by the CCCL Parties or any Bank
at any reasonable time and from time to time upon reasonable prior notice.
Within two (2) Business Days after the end of each month during the term of
this Short-Term RPA, the Agent shall provide a copy of the Register to the
Seller.
(e) Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and a Purchasing Bank (and, in the case of a
Purchasing Bank that is not then a Bank or an Affiliate thereof, by CCCL
and the Agent), the Agent shall (i) promptly accept such Commitment
Transfer Supplement and (ii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the Register
and give notice of such acceptance and recordation to the Banks and CCCL.
(f) Each CCCL Party authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning such CCCL Party and its Affiliates which has been delivered to
such Bank by or on behalf of such CCCL Party pursuant to this Short-Term
RPA or which has been delivered to such Bank by or on behalf of such CCCL
Party in connection with such Bank's credit evaluation of such CCCL Party
and its Affiliates prior to becoming a party to this Short-Term RPA.
10.9 Adjustments; Set-Off.
(a) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of its investments in Wholesale Pooled Property
or Retail Obligations, or any return or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off or counterclaim, pursuant to events or proceedings of the nature
referred to in Sections 7.1(g), 7.1(h), 7.1(i), 7.1(j) or 7.1(k) or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's
investments in Wholesale Pooled Property or Retail Obligations, or return
or interest thereon, such benefitted Bank shall purchase for cash from the
other Banks such portion of each such other Bank's investments in Wholesale
Pooled Property or Retail Obligations, or shall provide such other Banks
with the benefits of any such collateral, or the proceeds thereof, as shall
be necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. Each CCCL Party agrees that
each Bank so purchasing a portion of another Bank's investments in
Wholesale Pooled Property or Retail Obligations may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Banks provided
by law, each Bank shall have the right, without prior notice to any CCCL
Party, any such notice being expressly waived by each CCCL Party to the
extent permitted by applicable law, upon any amount becoming due and
payable by such CCCL Party hereunder or under the Related Documents
(whether at the stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Bank or any branch or agency thereof to
or for the credit or the account of such CCCL Party, provided, however,
that no Bank which maintains any bank account for the Wholesale Custodian
shall exercise any right of set-off or counterclaim or similar right with
respect to amounts on deposit in such bank account. Each Bank agrees
promptly to notify CCCL and the Agent after any such set-off and
application made by such Bank, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
10.10 Counterparts. This Short-Term RPA may be executed by one or
more of the parties to this Short-Term RPA in any number of separate
counterparts, and all of such counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this
Short-Term RPA signed by all the parties shall be lodged with CCCL and the
Agent.
10.11 Severability. Any provision of this Short-Term RPA which 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.
10.12 Entire Agreement. Except as otherwise provided herein with
respect to the 1993 RPA and the Long-Term RPA, this Short-Term RPA
represents the entire agreement of the CCCL Parties, the Agent and the
Banks with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank
relative to subject matter hereof not expressly set forth or referred to
herein or in the Related Documents.
10.13 Governing Law. This Short-Term RPA and the rights and
obligations of the parties under this Short-Term RPA shall be governed by,
and construed and interpreted in accordance with, the law of the Province
of Ontario and the federal laws of Canada applicable therein.
10.14 Submission To Jurisdiction; Waivers. Each CCCL Party hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Short-Term RPA and the Related
Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive jurisdiction of the courts of the Province of
Ontario;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Person at its
address set forth in the signature pages hereto or at such
other address of which the Agent shall have been notified
pursuant to Section 10.2;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special,
exemplary, punitive or consequential damages.
10.15 Further Assurances. Each CCCL Party agrees that it will
from time to time and at any time, do and perform any and all acts and
execute any and all further instruments required or reasonably requested by
the Agent to effect more fully the purposes and intent of this Short-Term
RPA, the Short-Term Wholesale Series Supplement, the Short-Term Retail PSA
and the Purchases contemplated hereunder or thereunder, including without
limitation, the execution of any financing statements, financing change
statements and all affidavits, notices or assignments for filing under the
provisions of the legislation of any jurisdiction.
10.16 Termination. This Short-Term RPA terminates on the later of
the termination of the Short-Term Retail PSA and the termination of the
Short-Term Wholesale Series Supplement.
IN WITNESS WHEREOF the parties hereto have caused this
Short-Term RPA to be duly executed as of the date and year first above
written.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P,Corp.Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
Branch of Account Commitment
(Millions)
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
$15 ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
$13.5 CANADIAN IMPERIAL BANK OF
COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir. Auto. Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
$13.5 THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-3770
Telex: 06-524712
$6 BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
$6 THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P,Corp.&Invst.Bnkg.Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
$4.5 BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
$4.5 CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259 Title: Vice President
Telecopier: 416-594-2266
Telex: 06-218241
$4.5 CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: Vice President
Toronto, Ontario
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
$4.5 MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
$3 SWISS BANK CORPORATION
(CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Associate Dir. Mrch. Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Mrch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
Exhibit 10-L
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.
as Seller
- and -
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
MORGAN BANK OF CANADA
SWISS BANK CORPORATION (CANADA)
as Banks
- and -
ROYAL BANK OF CANADA
as Agent
___________________________________________________________________________
SHORT-TERM RETAIL PURCHASE AND SERVICING AGREEMENT
May 23, 1994
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . -2-
"Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
"Aggregate Amount Outstanding" . . . . . . . . . . . . . . . . . . . . . -2-
"Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
"Anticipated Collection Schedule". . . . . . . . . . . . . . . . . . . . -2-
"Applicable Adjustment Percentage" . . . . . . . . . . . . . . . . . . . -2-
"Applicable Anticipated Collection Schedule" . . . . . . . . . . . . . . -3-
"Applicable Yield" . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Application Account". . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Assignment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Available Commitment" . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's BA/CDOR Spread". . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's BA Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's Reserve Adjustment". . . . . . . . . . . . . . . . . . . . . . . -3-
"Blended BA/CDOR Spread" . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Blended BA Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Blended Reserve Adjustment" . . . . . . . . . . . . . . . . . . . . . . -4-
"Bond Bid Yield" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Branch Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Calculation Period" . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Cash Equivalents" . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"CDOR Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"CFC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Chartered Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Chrysler Canada". . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Commitment" and "Commitment Amount" . . . . . . . . . . . . . . . . . . -5-
"Commitment Period". . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Complete Servicing Transfer". . . . . . . . . . . . . . . . . . . . . . -5-
"Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Daily Remittance Notice". . . . . . . . . . . . . . . . . . . . . . . . -5-
"Date of Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Defaulted Retail Obligations" . . . . . . . . . . . . . . . . . . . . . -5-
"Deferred Percentage (Retail Gross)" . . . . . . . . . . . . . . . . . . -6-
"Deferred Percentage (Retail Net)" . . . . . . . . . . . . . . . . . . . -6-
"Discount Factor". . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Fixed Rate" . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Fixed Rate Purchase Proceeds" . . . . . . . . . . . . . . . . -6-
"Estimated Retail Amount Due". . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Weighted Average Life". . . . . . . . . . . . . . . . . . . . -6-
"Exact Retail Amount Due". . . . . . . . . . . . . . . . . . . . . . . . -6-
"Fixed Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Fixed Rate Determination Date". . . . . . . . . . . . . . . . . . . . . -6-
"Governmental Authority" . . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 Carried-Over Amount" . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 RPA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Level V". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Offered Spread" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Ownership Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Ownership Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Period Losses". . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Primary Retail Deferred Payment". . . . . . . . . . . . . . . . . . . . -8-
"Prime Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Purchase Percentage". . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Replacement Effective Date" . . . . . . . . . . . . . . . . . . . . . . -8-
"Required Banks" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Required Retail Deferred Payment Level" . . . . . . . . . . . . . . . . -8-
"Responsible Officer". . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Amount Outstanding". . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Deferred Payment". . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Deferred Payment Excess" . . . . . . . . . . . . . . . . . . . . -8-
"Retail Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Paid Percentage" . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Purchase". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Revolving Credit Agreement" . . . . . . . . . . . . . . . . . . . . . . -9-
"Service Default". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Settlement Date". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Settlement Period". . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Short-Term Facility Fee Percentage" . . . . . . . . . . . . . . . . . . -9-
"Short-Term RPA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Short-Term Wholesale Aggregate Invested Amount" . . . . . . . . . . . . -9-
"Software" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Sold Retail Obligations". . . . . . . . . . . . . . . . . . . . . . . . -9-
"Total Portfolio". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Weighted Average Life". . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Net Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Selling Discount" . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
"Wholesale Contracts". . . . . . . . . . . . . . . . . . . . . . . . . .-10-
"Wholesale PSA". . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . .-10-
(a) Certain References . . . . . . . . . . . . . . . . . . . . . .-10-
(b) Currency . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
(c) Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.1 Agreement to Purchase and Sell. . . . . . . . . . . . . . . . . .-10-
(a) Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
(b) Selection and Legal Characterization. . . . . . . . . . . . . .-10-
2.2 Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . .-11-
2.3 Purchase and Sale Procedure. . . . . . . . . . . . . . . . . . . .-11-
(a) General. . . . . . . . . . . . . . . . . . . . . . . . . . . .-11-
(b) Notice and Other Requirements for Retail Purchases . . . . . .-11-
(c) Estimated Amounts. . . . . . . . . . . . . . . . . . . . . .-12-
(d) Minimum Retail Paid Percentage.. . . . . . . . . . . . . . . .-12-
(e) Exact Retail Amount Due. . . . . . . . . . . . . . . . . . . .-12-
2.4 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . .-12-
(a) Computation and Payment. . . . . . . . . . . . . . . . . . . .-12-
(b) Adjustments to Purchase Price. . . . . . . . . . . . . . . .-14-
2.5 Maximum Amount of Purchases. . . . . . . . . . . . . . . . . . . .-14-
(a) Maximum. . . . . . . . . . . . . . . . . . . . . . . . . . . .-14-
(b) Reassignment of Excess Retail Obligations. . . . . . . . . . .-14-
2.6 Interest on Overdue Payments. . . . . . . . . . . . . . . . . . .-15-
2.7 Discount and Interest Calculations. . . . . . . . . . . . . . . .-15-
ARTICLE III
SELLER'S SERVICING OBLIGATIONS: COLLECTIONS; MAINTENANCE OF
RECORDS
3.1 Collections and Applications. . . . . . . . . . . . . . . . . . . .-15-
(a) Identification of Collections. . . . . . . . . . . . . . . .-15-
(b) Deposit of Collections. . . . . . . . . . . . . . . . . . . .-15-
(c) Daily Remittance Notices. . . . . . . . . . . . . . . . . . .-16-
(d) Treatment of Funds.. . . . . . . . . . . . . . . . . . . . . .-16-
(e) Application Account. . . . . . . . . . . . . . . . . . . . . .-16-
(f) Cancellation of Daily Remittance Notice. . . . . . . . . . . .-17-
3.2 Collections by Seller. . . . . . . . . . . . . . . . . . . . . . .-17-
(a) Seller's Servicing Duties. . . . . . . . . . . . . . . . . .-17-
(b) Indemnification. . . . . . . . . . . . . . . . . . . . . . . .-18-
(c) Power of Attorney. . . . . . . . . . . . . . . . . . . . . . .-19-
(d) Service Default. . . . . . . . . . . . . . . . . . . . . . . .-19-
(e) Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . .-20-
(f) Termination of Servicing by Seller.. . . . . . . . . . . . . .-20-
(g) Reinstatement of Servicing by Seller . . . . . . . . . . . . .-21-
3.3 Maintenance of Records. . . . . . . . . . . . . . . . . . . . . .-22-
(a) Access, etc. . . . . . . . . . . . . . . . . . . . . . . . . .-22-
(b) Delivery of Records and Contracts. . . . . . . . . . . . . . .-22-
(c) Marking of Records. . . . . . . . . . . . . . . . . . . . . .-22-
(d) Segregation of Records.. . . . . . . . . . . . . . . . . . . .-22-
3.4 Rebates, Adjustments, Returns and Reductions. . . . . . . . . . . .-22-
ARTICLE IV
ADJUSTMENTS; SETTLEMENTS
4.1 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . .-23-
(a) Date of Adjustments. . . . . . . . . . . . . . . . . . . . . .-23-
(b) Anticipated Collections. . . . . . . . . . . . . . . . . . .-23-
(c) Fast Pay/Slow Pay Adjustments. . . . . . . . . . . . . . . . .-24-
(d) Applicable Adjustment Percentage. . . . . . . . . . . . . . .-24-
(e) Discount Factor. . . . . . . . . . . . . . . . . . . . . . .-25-
4.2 Settlement Statements; Charging Defaulted Obligations . . . . . . .-25-
(a) Settlement Statement. . . . . . . . . . . . . . . . . . . .-25-
(b) Defaulted Obligations. . . . . . . . . . . . . . . . . . . . .-26-
(c) Adjustments to Deferred Payment. . . . . . . . . . . . . . .-27-
(d) Required Retail Deferred Payment Level.. . . . . . . . . . . .-28-
(e) Payments to Seller After Default.. . . . . . . . . . . . . . .-28-
(f) Adjustments in Payments to Banks.. . . . . . . . . . . . . . .-28-
(g) Termination of Agreement. . . . . . . . . . . . . . . . . . .-29-
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Covenants, Representations and Warranties by the Seller.. . . . . .-29-
5.2 Repurchase of Retail Obligations. . . . . . . . . . . . . . . . .-32-
5.3 Invalidity, etc. . . . . . . . . . . . . . . . . . . . . . . . . .-32-
ARTICLE VI
CONDITIONS TO EFFECTIVENESS/PURCHASES
6.1 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . .-32-
6.2 Conditions to Each Purchase.. . . . . . . . . . . . . . . . . . . .-32-
ARTICLE VII
THE AGENT AND THE BANKS
7.1 For Benefit of Banks Only.. . . . . . . . . . . . . . . . . . . . .-34-
7.2 Status of Agent.. . . . . . . . . . . . . . . . . . . . . . . . . .-34-
7.3 Purchase and Sale.. . . . . . . . . . . . . . . . . . . . . . . . .-34-
(a) Agreements to Purchase and Sell. . . . . . . . . . . . . . .-34-
(b) Ownership Percentages. . . . . . . . . . . . . . . . . . . .-34-
(c) Purchase Price; Adjustments on Account of
Exact Amounts Due. . . . . . . . . . . . . . . . . . . . . . .-35-
(i) Computation. . . . . . . . . . . . . . . . . . . . . . .-35-
(ii) Effect of Purchase. . . . . . . . . . . . . . . . . . .-35-
(iii) Remittances - Estimated Amounts. . . . . . . . . . . .-35-
(iv) Remittances - Exact Amounts. . . . . . . . . . . . . . .-36-
(d) Confirmation of Ownership Interests. . . . . . . . . . . . . .-36-
7.4 Maximum Amounts of Purchases. . . . . . . . . . . . . . . . . . .-37-
7.5 Sharing of Earned Discounts . . . . . . . . . . . . . . . . . . . .-37-
7.6 Distributions to Banks of Payments Received by Agent. . . . . . . .-37-
7.7 Further Payments on Account of Deferred Payment Excesses and
Timing Adjustments. . . . . . . . . . . . . . . . . . . . . . . .-38-
7.8 Mechanics of Payments . . . . . . . . . . . . . . . . . . . . . . .-38-
(a) Payments by Banks. . . . . . . . . . . . . . . . . . . . . .-38-
(b) Payments by the Agent. . . . . . . . . . . . . . . . . . . .-38-
7.9 Actions by Agent. . . . . . . . . . . . . . . . . . . . . . . . . .-38-
(a) Exercise of Rights. . . . . . . . . . . . . . . . . . . . . .-38-
(b) Complete Servicing Transfer. . . . . . . . . . . . . . . . .-39-
(c) Recovery From Seller or CFC. . . . . . . . . . . . . . . . .-39-
7.10 Non-Performance by Bank. . . . . . . . . . . . . . . . . . . . . .-39-
(a) Consequences of Default. . . . . . . . . . . . . . . . . . . .-39-
(b) Purchase of Defaulting Bank's Interest.. . . . . . . . . . . .-40-
(c) Liability of Banks to Agent. . . . . . . . . . . . . . . . . .-40-
7.11 Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . .-40-
ARTICLE VIII
MISCELLANEOUS
8.1 Short-Term RPA. . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.2 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . .-41-
8.3 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.5 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . .-41-
8.6 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.9 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .-42-
EXHIBIT A SHORT-TERM RETAIL SPA:
CERTIFICATE OF RETAIL AMOUNT OUTSTANDING. . . . . . . . .-48-
EXHIBIT B SHORT-TERM RETAIL SPA: ASSIGNMENT. . . . . . . . . . . .-49-
EXHIBIT C SHORT-TERM RETAIL SETTLEMENT STATEMENT. . . . . . . . . .-50-
EXHIBIT D FORM OF OPINION OF COUNSEL FOR
THE SELLER REQUIRED FOR EACH PURCHASE . . . . . . . . . .-53-
EXHIBIT E NOTICE UNDER S. 7.3(c)(ii)(A) OF SHORT-TERM
RETAIL PURCHASE AND SERVICING AGREEMENT . . . . . . . . .-59-
EXHIBIT F-1 NOTICE UNDER S. 7.3(c)(iii)(B) OF
SHORT-TERM RETAIL PURCHASE AND SERVICING AGREEMENT. . . .-60-
EXHIBIT F-2 NOTICE UNDER S. 7.3(c)(iii)(B) OF SHORT-TERM
RETAIL PURCHASE AND SERVICING AGREEMENT . . . . . . . . .-61-
EXHIBIT G NOTICE UNDER S. 7.3(c)(iii)(C) OF SHORT-TERM
RETAIL PURCHASE AND SERVICING AGREEMENT . . . . . . . . .-62-
<PAGE>
THIS SHORT-TERM RETAIL PURCHASE AND SERVICING AGREEMENT is dated as of
May 23, 1994, among ROYAL BANK OF CANADA, a Canadian chartered bank having
offices at 200 Bay Street, South Tower, Royal Bank Plaza, Toronto, Ontario
M5J 2J5 ("Royal"), CHRYSLER CREDIT CANADA LTD. ("CCCL"), a Canadian
corporation having its principal office at 2233 Argentia Road, Mississauga,
Ontario L5N 2X7, in its capacity as seller of the Retail Obligations
hereunder (in such capacity, "Seller"), and such Chartered Banks (including
Royal) as are listed on the signature pages hereto and may become parties
to this Agreement from time to time (collectively, the "Banks"), and ROYAL
as agent for and on behalf of the Banks (in such capacity, the "Agent").
RECITALS
A. WHEREAS the Seller in the regular course of its business acquires
receivables arising from retail sales within Canada of new and used
passenger automobiles and light-duty trucks by independent and affiliated
dealers (located in Canada) in such vehicles, which receivables are
evidenced by retail instalment sale contracts between the Seller and the
retail purchasers providing for (i) payment by the retail purchasers of
amounts in instalments over a period of time and (ii) the retention of
title to or the reservation by or grant to the Seller of a lien on or a
security interest in the vehicles sold thereunder as security for such
payments (such contracts being herein called "Contracts"); and
B. WHEREAS the Seller desires to sell to the Banks from time to time all
of the Seller's right, title and interest in, to and under Contracts with
not more than 60 months remaining from the Date of Sale (as defined herein)
for such Contracts to the maturity thereof and with an original term of not
more than 73 months including, without limitation, all of the Seller's
right, title and interest in and to all indebtedness and liability for all
monies due and to become due to the Seller thereunder or in respect thereof
and all rights, claims and benefits of the Seller provided for therein or
otherwise related thereto (such Contracts and all indebtedness and
liability for all monies due and to become due to the Seller thereunder or
in respect thereof and all rights, claims and benefits of the Seller
provided for therein or otherwise related thereto, being herein
collectively called the "Retail Obligations"); and the several Banks are
agreeable to purchasing pro rata undivided interests in such Retail
Obligations on the terms and conditions contained herein;
C. WHEREAS CCCL, CFC and Royal are parties to a Retail Purchase and
Servicing Agreement dated as of January 27, 1993 (the "1993 RPA") pursuant
to which Royal agreed to purchase, and CCCL agreed to sell, retail accounts
receivable (the "1993 Obligations");
D. WHEREAS the parties hereto have entered into a Short-Term Receivables
Purchase Agreement dated as of May 23, 1994 (the "Short-Term RPA") which,
along with the Related Documents (as defined in the Short-Term RPA) will in
part replace the Standby Receivables Purchase Agreement dated January 27,
1993;
E. WHEREAS the parties hereto wish to set out herein the terms and
conditions that shall govern the purchase and sale of Retail Obligations
effective the Replacement Effective Date; and
F. WHEREAS Royal has agreed to act as administrative agent for the Banks
in effecting the purchase of the Retail Obligations on their behalf and in
administering collections and disbursements in respect of such Retail
Obligations;
NOW THEREFORE in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Short-Term Retail Purchase and
Servicing Agreement, the following capitalized terms shall have the
following meanings, unless the context shall otherwise require:
"Agent" shall mean Royal acting in its capacity as agent hereunder and
pursuant to Article VIII of the Short-Term RPA for and on behalf of the
Banks.
"Aggregate Amount Outstanding" shall mean, at the date of any
determination thereof (after giving effect to the adjustments provided for
in section 4.2), the excess, if any, of (i) the sum of the applicable
Retail Paid Percentages of (A) the Exact Retail Amounts Due upon all Retail
Obligations purchased hereunder with respect to which the Exact Retail
Amount Due shall then have been determined and (B) the Estimated Retail
Amounts Due upon all Retail Obligations purchased hereunder with respect to
which the Exact Retail Amount Due shall not then have been determined over
(ii) the excess, if any, of (A) the aggregate amount of all collections on
all Retail Obligations purchased hereunder theretofore remitted by the
Seller to the Agent pursuant to this Agreement or otherwise received by the
Agent over (B) the sum of (I) the aggregate amount theretofore applied
pursuant to clauses (ii), (iii), (iv), (v) and (vi) of subsection 4.2(c)
out of the Retail Deferred Payments applicable to the Retail Obligations
purchased hereunder and (II) the aggregate amount of the discounts deducted
by the Agent in computing the purchase price of all Retail Obligations
theretofore purchased hereunder which shall then have been earned by the
Banks.
"Agreement" shall mean this Short-Term Retail Purchase and Servicing
Agreement as the same may from time to time be amended, supplemented or
otherwise modified.
"Anticipated Collection Schedule" shall have the meaning assigned in
subsection 4.1(b).
"Applicable Adjustment Percentage" shall have the meaning assigned in
subsection 4.1(d).
"Applicable Anticipated Collection Schedule" shall mean, with respect
to the Retail Obligations sold or to be sold to the Banks hereunder on any
related Closing Dates, the Anticipated Collection Schedules applicable to
such Retail Obligations.
"Applicable Yield" shall have the meaning assigned in subsection
2.4(b).
"Application Account" shall mean the account held and maintained by,
and in the name and sole control of, the Agent at its main branch, South
Tower, Royal Bank Plaza, Toronto, Ontario and entitled the "Royal Bank of
Canada Special Application Account".
"Assignment" shall mean each instrument of assignment substantially in
the form of Exhibit B delivered pursuant to subsection 2.3(b)(iii)(B).
"Available Commitment" shall have the meaning assigned in the Short-
Term RPA.
"Bank" means any of the Chartered Banks listed on the signature pages
hereto, including Royal, and such other Chartered Banks as may become
parties to this Agreement from time to time.
"Bank's BA/CDOR Spread" in respect of a Retail Purchase shall mean the
excess, if any, notified by a Bank to the Agent of (i) the Bank's BA Rate
for one month Canadian dollar bankers' acceptances over (ii) the CDOR Rate,
in each case determined as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date; provided, however, that for purposes of the foregoing
definition the Bank's BA Rate shall be determined exclusive of the reserve
costs incorporated in clause (ii) of the definition of Bank's BA Rate.
"Bank's BA Rate" based on discount bankers' acceptances shall mean the
rate per annum from time to time notified by a Bank to the Agent and the
Seller as being the sum of (i) the rate per annum then in effect for
determining discounts on such Canadian dollar bankers' acceptances accepted
by the Bank in Canada and held for its own account (such rates to be
exclusive of any reserve costs) plus, if applicable, (ii) a percentage,
expressed as a decimal, established by the Bank at such time, such
percentage not to exceed the percentage which represents the effective cost
to the Bank of the aggregate of all primary, secondary and other reserve
requirements which are applicable to Canadian dollar deposits accepted by
such Bank in Canada for a term approximating the maturity period for such
bankers' acceptances and which are in effect at such time.
"Bank's Reserve Adjustment" in respect of a Retail Purchase shall mean
the percentage, expressed as a decimal, established by a Bank as of 10:00
a.m. Toronto time on the Fixed Rate Determination Date and notified by such
Bank to the Agent and the Seller, such percentage not to exceed the
percentage which represents the effective cost to the Bank of the aggregate
of all primary, secondary and other reserve requirements which are
applicable to Canadian dollar deposits accepted by such Bank in Canada for
a term approximating the Estimated Weighted Average Life of the Retail
Obligations to be purchased by the Banks and which are in effect at such
time.
"Blended BA/CDOR Spread" in respect of a Retail Purchase shall mean
the spread determined as the sum of the products obtained by multiplying
each Bank's BA/CDOR Spread by such Bank's Purchase Percentage.
"Blended BA Rate" shall mean the rate per annum equal to the sum of
the products obtained by multiplying each Bank's BA Rate by such Bank's
Purchase Percentage.
"Blended Reserve Adjustment" in respect of a Retail Purchase shall
mean the percentage, expressed as a decimal, determined as the sum of the
products obtained by multiplying each Bank's Reserve Adjustment by such
Bank's Purchase Percentage.
"Bond Bid Yield" applicable to a Retail Purchase shall mean a bid rate
determined by the Agent as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date for Government of Canada bonds or notes in the
approximate amount of the Estimated Fixed Rate Purchase Proceeds with
approximately the same maturity as the Estimated Weighted Average Life of
the Retail Obligations to be purchased by the Banks with interest payments
being made semi-annually.
"Branch Account" shall have the meaning assigned in subsection 3.1(b).
"Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday in Toronto, Ontario or New York, New York.
"Calculation Period" shall mean (i) the period from and including
Closing Date (unless such Closing Date is a Settlement Date, in which case
the provisions of clause (ii) of this definition shall apply) to but not
including the Settlement Date next following such Closing Date and (ii) the
period from and including a Settlement Date (including any Settlement Date
which is also a Closing Date) to but not including the next succeeding
Settlement Date.
"Cash Equivalents" shall mean (i) debt securities issued or directly
and fully guaranteed or insured by the Government of Canada or any Province
thereof or any agency or instrumentality thereof having maturities prior to
the immediately succeeding Settlement Date, (ii) instruments of deposit,
having maturities prior to the immediately succeeding Settlement Date, of
or guaranteed by the Agent or any Bank, (iii) bankers' acceptances accepted
by the Agent or any Bank, or (iv) debt securities issued by any corporation
which are rated at least R-1 (low) by Dominion Bond Rating Service Inc. or
Al (low) by CBRS Inc., in each case maturing prior to the immediately
succeeding Settlement Date.
"CDOR Rate" means, on any day, the annual rate of interest which is
the rate based on an average 30 day rate applicable to Canadian Dollar
bankers' acceptances appearing on the "Reuters Screen CDOR Page" (as
defined in the International Swap Dealer Association, Inc. definitions, as
modified and amended from time to time) as of 10:00 a.m. on such day, or if
such day is not a Business Day then on the immediately preceding Business
Day; provided, however, if such rates do not appear on the Reuters Screen
CDOR Page as contemplated, then the CDOR Rate on any day shall be
calculated as the arithmetic mean of the 30 day rates applicable to
Canadian Dollar bankers' acceptances quoted by four major Canadian Schedule
I chartered banks as of 10:00 a.m. on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day. Initially,
the four major Canadian Schedule I chartered banks will be Bank of
Montreal, The Bank of Nova Scotia, Royal and Canadian Imperial Bank of
Commerce. If less than four of the institutions described in the
immediately preceding sentence quote the aforementioned rate on the days
and at the times described above, the "CDOR Rate" shall be such other rate
or rates as the parties may agree.
"CFC" shall mean Chrysler Financial Corporation, a Michigan
corporation.
"Chartered Bank" means a bank named on Schedule I or Schedule II to
the Bank Act (Canada).
"Chrysler Canada" shall mean Chrysler Canada Ltd., a Canadian
corporation.
"Closing Date" shall have the meaning assigned in section 2.3(a).
"Commitment" and "Commitment Amount" shall have the meanings assigned
in the Short-Term RPA.
"Commitment Period" shall have the meaning assigned in the Short-Term
RPA.
"Complete Servicing Transfer" shall have the meaning assigned in
subsection 3.2(f).
"Contracts" shall have the meaning assigned in the first recital.
"Daily Remittance Notice" shall mean a written notification delivered
by the Agent to the Seller in accordance with subsection 3.1(c), requesting
a remittance to the Application Account in accordance with subsection
3.1(c) of collections received by the Seller on account of the Sold Retail
Obligations.
"Date of Sale" shall have the meaning assigned in section 2.3(a).
"Defaulted Retail Obligations" shall have the meaning assigned in
subsection 4.2(a)(ii).
"Deferred Percentage (Retail Gross)" shall mean, in respect of Retail
Obligations purchased hereunder, 8%; and "Deferred Percentage (Retail Net)"
shall mean, in respect of Retail Obligations purchased hereunder, 10%;
provided that, if on any Settlement Date the Period Losses for the three
Settlement Periods immediately preceding such Settlement Date shall exceed,
on an annualized basis, 3% of the average unpaid balance of the Total
Portfolio for such Settlement Periods, the Deferred Percentage otherwise
applicable pursuant to each of the two foregoing definitions shall be
increased for each Closing Date occurring during the Calculation Period
following such Settlement Date by an amount equal to such excess (rounded
up to the next one-half of one percent).
"Discount Factor" shall have the meaning assigned in subsection
4.1(e).
"Estimated Fixed Rate" shall mean the Agent's estimate of the Fixed
Rate determined by the Agent after consultation with the Seller and
provided to the Seller upon request from time to time.
"Estimated Fixed Rate Purchase Proceeds" shall mean the amount
notified by the Seller to the Agent as being the Seller's estimate of the
net proceeds to be paid by the Agent to the Seller in respect of a Retail
Purchase based on the Estimated Fixed Rate provided by the Agent to the
Seller.
"Estimated Retail Amount Due" shall have the meaning assigned in
section 2.3(c)(i).
"Estimated Weighted Average Life" of Retail Obligations to be
purchased by the Banks shall mean the Seller's estimate of the Weighted
Average Life of such Retail Obligations notified by the Seller to the
Agent, such estimate to be calculated based on the applicable Estimated
Fixed Rate provided by the Agent to the Seller.
"Exact Retail Amount Due" shall have the meaning assigned in section
2.3(e).
"Fixed Rate" in respect of a Retail Purchase shall mean an annual rate
which is the sum of (i) the Bond Bid Yield; plus (ii) the applicable
Offered Spread (each of (i) and (ii) converted to a rate based on monthly
rather than semi-annual interest payments); plus (iii) the positive
difference between 0.625% and the Short-Term Facility Fee Percentage (which
difference is 0.4750%); plus (iv) the Blended BA/CDOR Spread; plus (v) the
Blended Reserve Adjustment.
"Fixed Rate Determination Date" in respect of a Retail Purchase shall
mean the third Business Day prior to the related Closing Date.
"Governmental Authority" shall mean any nation or government, any
province or other political subdivision thereof and any entity exercising
executive, legislative, regulatory or administrative functions of or
pertaining to government.
"1993 Carried-Over Amount" shall mean at the date of determination,
the Retail Aggregate Invested Amount as defined in the 1993 RPA.
"1993 Commitments" shall have the meaning assigned in the Short-Term
RPA.
"1993 RPA" shall have the meaning assigned in the third recital
hereof.
"Level V" shall have the meaning assigned in the Revolving Credit
Agreement.
"Offered Spread" applicable to a Bond Bid Yield is the spread
determined by the Agent as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date to be the spread above the Bond Bid Yield normally
offered by Royal for a swap of a similar maturity and amount which converts
the Bond Bid Yield to Royal's 30 day Canadian dollar banker's acceptance
rate.
"Ownership Interest" of a Bank on any Settlement Date shall mean the
excess, if any, of (i) the aggregate purchase price paid by such Bank to
the Agent pursuant to subsection 2.4(a) (as adjusted pursuant to
subsections 7.3(c) and (d)); and including any purchase price paid on such
Settlement Date, if any) for the undivided ownership interest purchased by
such Bank in the Sold Retail Obligations over (ii) the difference between
(A) the aggregate amount of all collections, if any, received by such Bank
(excluding collections which are deemed to occur by reason of a charge to
the Retail Deferred Payment but including collections received on such
Settlement Date on account of the Settlement Periods next preceding such
Settlement Date) and (B) the sum of (x) such Bank's Purchase Percentage of
the aggregate amount of payments, if any, made to the Seller pursuant to
subsection 4.2(c) (including any such payment made on such Settlement Date)
and (y) such Bank's Purchase Percentage of the aggregate amount of the
discounts deducted by the Agent in computing the purchase price of all Sold
Retail Obligations which shall then have been earned by such Bank.
"Ownership Percentage" of a Bank shall mean a fraction the numerator
of which is such Bank's Ownership Interest and the denominator of which is
the sum of the Ownership Interests of all Banks.
"Period Losses" means all sums chargeable during the applicable period
to bad debts (or similar accounts) under CCCL's normal accounting practices
in respect of the Total Portfolio during such period, net of recoveries
during such period of sums previously charged to bad debts (or similar
accounts) in respect of the Total Portfolio.
"Person" means an individual, corporation, partnership, trust, joint
venture, unincorporated organization, body corporate, personal
representative, cooperative, association or Governmental Authority.
"Primary Retail Deferred Payment" shall have the meaning assigned in
subsection 4.2(b).
"Prime Rate" means on any day the greater of (i) the annual rate of
interest announced from time to time by the Agent as its reference rate
then in effect for determining interest rates on Canadian dollar
denominated commercial loans in Canada and (ii) the annual rate of interest
equal to the sum of (A) the CDOR Rate and (B) 1% per annum.
"Purchase Percentage" of a Bank shall have the meaning assigned in the
Short-Term RPA.
"Purchase Price" shall have the meaning assigned in section 2.4(a).
"Replacement Effective Date" shall have the meaning assigned in the
Short-Term RPA.
"Required Banks" as of any particular time shall have the meaning
assigned in the Short-Term RPA.
"Required Retail Deferred Payment Level" shall have the meaning
assigned in subsection 4.2(d).
"Responsible Officer" shall have the meaning assigned in the Short-
Term RPA.
"Retail Amount Outstanding" shall have the meaning assigned in
subsection 2.5(a).
"Retail Deferred Payment" shall have the meaning assigned in
subsection 2.4(a)(i).
"Retail Deferred Payment Excess" shall have the meaning assigned in
subsection 4.2(c).
"Retail Obligations" shall have the meaning assigned in the second
recital.
"Retail Paid Percentage" shall mean such percentage which when applied
to the Estimated Retail Amount Due upon the Retail Obligations purchased by
the Banks on any Closing Date hereunder and assuming collections on such
Retail Obligations as anticipated in accordance with the Applicable
Anticipated Collection Schedule relating to such Retail Obligations
delivered to the Agent pursuant to subsection 4.1(b) and the application of
such collections in accordance with the assumptions made in preparing such
Applicable Anticipated Collection Schedule, will cause the aggregate annual
rate of return to the Banks on the amount paid on such Closing Date by the
Agent to the Seller for such Retail Obligations (without including in such
amount paid the amount of the Retail Deferred Payment applicable to such
Retail Obligations retained by the Banks) to be equal to the Fixed Rate
applicable to the purchase of Retail Obligations hereunder.
"Retail Purchase" shall mean a purchase of Retail Obligations
hereunder made pursuant to Article II.
"Revolving Credit Agreement" shall have the meaning assigned in the
Short-Term RPA.
"Service Default" shall have the meaning assigned in subsection
3.2(d).
"Settlement Date" shall mean the third Tuesday in each calendar month
(or if the third Tuesday in any calendar month is not a Business Day then
the next day in such calendar month which is a Business Day).
"Settlement Period" shall mean, with respect to any Settlement Date,
the calendar month next preceding such Settlement Date.
"Short-Term Facility Fee Percentage" shall have the meaning assigned
in the Short-Term RPA (being 0.15%).
"Short-Term RPA" shall have the meaning assigned in the fourth
recital.
"Short-Term Wholesale Aggregate Invested Amount" shall have the
meaning assigned in the Short-Term RPA.
"Software" shall have the meaning assigned in subsection 3.2(f)(v).
"Sold Retail Obligations" shall mean the Retail Obligations purchased
by the Banks hereunder through the Agent.
"Total Portfolio" means all Contracts and all Wholesale Contracts,
whether sold or unsold, owned by CCCL or any Seller at any time during the
period immediately preceding the date of determination of Period Losses.
"Weighted Average Life" of Retail Obligations to be purchased by the
several Banks through the Agent hereunder shall mean the anticipated
weighted average life remaining on the Sold Retail Obligations as of the
Date of Sale calculated as follows based on the Applicable Anticipated
Collection Schedule: the Selling Discount divided by the Net Proceeds
divided by the Fixed Rate expressed as a decimal where "Net Proceeds" means
the Retail Paid Percentage of the Estimated Retail Amount Due and the
"Selling Discount" means the difference between the Estimated Retail Amount
Due and the sum of the Net Proceeds and the Retail Deferred Payment.
"Wholesale Contracts" shall have the meaning assigned in the Short-
Term RPA.
"Wholesale PSA" shall have the meaning assigned in the Short-Term RPA.
1.2 Other Definitional Provisions.
(a) Certain References. The words "hereof", "herein" and
"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, and section, subsection, schedule and exhibit references
are to this Agreement unless otherwise specified.
(b) Currency. All amounts and values expressed in this
Agreement are expressed in Canadian currency.
(c) Headings. The headings used in this Agreement and the Index
are for convenience of reference only and shall not affect the
interpretation of this Agreement.
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.1 Agreement to Purchase and Sell.
(a) Sale. Subject to the terms and conditions of this Agreement and
the Short-Term RPA, the Seller may at its option, sell to the several
Banks, and each Bank severally agrees to purchase as tenant in common, from
the Seller, with the Agent acting as intermediary in accordance with this
Agreement and the Short-Term RPA, from time to time on each Closing Date
during the Commitment Period undivided interests in all the right, title
and interest of the Seller in, to and under all Retail Obligations to be
described in schedules to be delivered to the Agent at least three Business
Days prior to each related Closing Date hereunder for a purchase price
equal to the product of such Bank's Purchase Percentage and the Purchase
Price of the Retail Obligations being sold on the related Closing Date.
(b) Selection and Legal Characterization. Those Retail Obligations
to be sold to the Banks hereunder on any Closing Date shall be selected
from the total portfolio of Retail Obligations then owned by the Seller on
a random basis agreed upon between the Seller and the Agent, on behalf of
the Banks. Any sale of Retail Obligations pursuant to this Agreement shall
not constitute a mortgage, pledge, lien, security interest, conditional
sale, title retention agreement or other similar encumbrance in respect of
any such Retail Obligations.
2.2 Replacement. Upon the Replacement Effective Date, subject as
hereinafter provided, the 1993 Commitments shall be terminated. Any 1993
Carried-Over Amount outstanding shall remain outstanding under and pursuant
to the 1993 RPA provided that such 1993 Carried-Over Amount shall be
credited as to 30% thereof to reduce the several Banks' obligations to make
Retail Purchases hereunder and under the Short-Term RPA and provided
further that any amount payable hereunder or thereunder as of the
Replacement Effective Date to NBD Bank, Canada, or to Hongkong Bank of
Canada shall continue to be so payable as if the 1993 RPA were still in
full force and effect.
2.3 Purchase and Sale Procedure.
(a) General. Subject to the Short-Term RPA and the terms and
conditions provided in this subsection 2.3 and in Article VII, sales of
Retail Obligations hereunder may take place on any Business Day during the
Commitment Period (each date upon which a sale of Retail Obligations may
occur hereunder being herein called a "Closing Date" applicable to such
sale). Each such sale shall be as of the close of business on the last day
of the calendar month immediately preceding the related Closing Date (each
such date being herein called a "Date of Sale" applicable to such Sold
Retail Obligations) and shall take place at the office of the Agent or at
such other place as may be agreed upon.
(b) Notice and Other Requirements for Retail Purchases. In respect of
any sale of Retail Obligations proposed to be made by the Seller hereunder:
(i) the Seller shall comply with all applicable conditions
precedent for Purchases contained in Section 4.4 of the
Short-Term RPA and for Retail Purchases contained in
Article VI of this Agreement;
(ii) the Seller shall give the Agent five Business Days'
prior written notice of the Seller's intention to sell
Retail Obligations hereunder; and
(iii) on each Closing Date hereunder the Seller shall deliver
to the Agent (A) a certificate in the form of Exhibit A
attached hereto, duly executed by a Responsible Officer
of the Seller, dated such Closing Date, setting forth
the Retail Amount Outstanding before giving effect to
the purchase and sale to be effected on such Closing
Date and (B) an Assignment, dated such Closing Date,
assigning and transferring to the Banks in proportion
to their respective Purchase Percentages, as of the
close of business on the related Date of Sale with
respect to each sale of any Retail Obligations
hereunder, all right, title and interest of the Seller
in and to the Retail Obligations described in the
schedule delivered to the Agent prior to such Closing
Date pursuant to subsection 2.1(a), a copy of which
schedule shall also be attached to such Assignment.
(c) Estimated Amounts. Not less than five Business Days prior
to each Closing Date hereunder, the Seller shall deliver to the Agent with
respect to the Retail Obligations to be sold on such Closing Date:
(i) the Seller's estimate in writing of the amount due and
to become due upon all of the Retail Obligations to be
sold to the Banks on such Closing Date (such amount and
each such estimated amount applicable to the Retail
Obligations purchased on any Closing Date being herein
called the "Estimated Retail Amount Due" upon such
Retail Obligations),
(ii) the Applicable Anticipated Collection Schedule relating
to such Retail Obligations, and,
(iii) no later than the applicable Fixed Rate Determination
Date, a statement of the Retail Paid Percentage of the
Estimated Retail Amount Due upon such Retail
Obligations.
(d) Minimum Retail Paid Percentage. The Banks shall have no
obligation to purchase any Retail Obligations on any Closing Date hereunder
unless the Retail Paid Percentage of the Estimated Retail Amount Due upon
the Retail Obligations proposed to be sold to it on such Closing Date
exceeds $5,000,000.
(e) Exact Retail Amount Due. As soon as practicable, but in any
event not later than the last Business Day of the calendar month in which
such Closing Date shall have occurred, the Seller will furnish to the Agent
a written statement of the exact amount due and to become due as of the
close of business on the related Date of Sale upon the Retail Obligations
sold to the Banks as of such Date of Sale (such amount being herein called
the "Exact Retail Amount Due" upon such Retail Obligations). If the Seller
does not furnish to the Agent a written statement of the Exact Retail
Amount Due in respect of Retail Obligations purchased on a Closing Date by
the end of the calendar month in which such Closing Date occurs, then for
the purposes of this Agreement, the Seller shall be deemed to have
furnished to the Agent a written statement of the Exact Retail Amount Due
identical to the related statement of the Estimated Retail Amount Due in
respect of the Retail Obligations purchased on such Closing Date.
2.4 Payment of Purchase Price.
(a) Computation and Payment. The aggregate purchase price
("Purchase Price") for the Retail Obligations to be purchased by and sold
to the Banks on each Closing Date hereunder shall equal the aggregate of
the net amounts payable by the Banks, or by the Agent on behalf of the
Banks, as applicable, to the Seller in respect of a purchase of Retail
Obligations hereunder after effect has been given to the following
provisions:
(i) On each Closing Date each Bank shall deduct from its
Purchase Percentage of the Estimated Retail Amount Due
upon such Retail Obligations and retain its Purchase
Percentage of an amount (such amount, as the same may
be increased or reduced as provided for herein, being
herein called the "Retail Deferred Payment" applicable
to such Retail Obligations) equal to the lesser of (x)
the Deferred Percentage (Retail Gross) of the Estimated
Retail Amount Due upon such Retail Obligations and (y)
the Deferred Percentage (Retail Net) of the Retail Paid
Percentage of the Estimated Retail Amount Due upon such
Retail Obligations; and, subject to receipt from each
Bank of its Purchase Percentage thereof, the Agent
shall pay the Seller an amount equal to the Retail Paid
Percentage of the Estimated Retail Amount Due upon such
Retail Obligations. The Retail Deferred Payment
applicable to the Sold Retail Obligations purchased on
any related Closing Date will be applied as hereinafter
provided.
(ii) Upon receipt by the Agent of the statement showing the
Exact Retail Amount Due upon such Retail Obligations:
(A) if the Exact Retail Amount Due upon such Retail
Obligations exceeds the Estimated Retail Amount
Due upon such Retail Obligations, each Bank shall,
subject to the provisions of subsection 2.5,
deduct from its Purchase Percentage of such excess
and add to the Retail Deferred Payment applicable
to such Retail Obligations its Purchase Percentage
of an amount so that the Retail Deferred Payment
equals the lesser of (x) the Deferred Percentage
(Retail Gross) of the Exact Retail Amount Due upon
such Retail Obligations and (y) the Deferred
Percentage (Retail Net) of the Retail Paid
Percentage of the Exact Retail Amount Due upon
such Retail Obligations, subject to receipt from
each Bank of its Purchase Percentage thereof, and
the Agent shall promptly pay the Seller an
additional amount equal to the Retail Paid
Percentage of such excess together with interest
on such additional amount computed for the period
from such Closing Date to the date of payment of
such additional amount at the Fixed Rate
applicable to such Retail Obligations; and
(B) if the Exact Retail Amount Due upon such Retail
Obligations is less than the Estimated Retail
Amount Due upon such Retail Obligations, the
Seller shall promptly pay the Agent an amount
equal to the Retail Paid Percentage of the
difference between the Exact Retail Amount Due
upon such Retail Obligations and the Estimated
Retail Amount Due upon such Retail Obligations,
together with interest on such amount computed for
the period from such Closing Date to the date of
payment of such amount at the Fixed Rate
applicable to such Retail Obligations, and the
Retail Deferred Payment applicable to such Retail
Obligations shall be reduced by an amount so that
the Retail Deferred Payment equals the lesser of
the amounts referred to in (A)(x) and (A)(y)
above.
(b) Adjustments to Purchase Price. The Agent, the Banks and the
Seller agree that the Purchase Price to be paid by the Agent for the Sold
Retail Obligations purchased on each Closing Date shall be adjusted from
time to time in order to ensure that the Banks shall receive an annual rate
of return (computed on a monthly basis) on their investment calculated with
respect to such Sold Retail Obligations at a rate per annum equal to the
applicable Fixed Rate (the annual rate of return specified in this
subsection 2.4(b) applicable to such Sold Retail Obligations being herein
called the "Applicable Yield" for such Sold Retail Obligations).
Accordingly, adjustments in the Purchase Price paid by the Agent for Sold
Retail Obligations shall be made on each Settlement Date as provided for in
subsection 4.1.
2.5 Maximum Amount of Purchases.
(a) Maximum. The Banks shall not be obligated to purchase any
Retail Obligations on any Closing Date hereunder if the sum of (i) the
Aggregate Amount Outstanding before giving effect to such purchase plus
(ii) the Retail Paid Percentage of the Estimated Retail Amount Due upon any
Retail Obligations to be purchased on such Closing Date (the sum of clauses
(i) and (ii) being herein called the "Retail Amount Outstanding") plus
(iii) the Short-Term Wholesale Aggregate Invested Amount would exceed the
Short-Term Commitment Amount.
(b) Reassignment of Excess Retail Obligations. Notwithstanding
the provisions of clause (i) of subsection 2.4(a), if, after the receipt by
the Agent of any written statement of Exact Retail Amount Due furnished to
the Agent pursuant to subsection 2.3(c)(i) and the calculation of the
Aggregate Retail Amount Outstanding to include the Exact Retail Amount Due
set forth on said statement, the sum of the Retail Amount Outstanding plus
the Short-Term Wholesale Aggregate Invested Amount would exceed the Short-
Term Commitment Amount, determined on the Settlement Date hereunder next
preceding the date of receipt by the Agent of such statement of Exact
Retail Amount Due and after giving effect to any purchase hereunder on such
Settlement Date, the Agent shall reassign to the Seller, without recourse,
representation or warranty, such of the Retail Obligations to which such
statement of Exact Retail Amount Due relates (selected on a random basis
agreed upon between the Seller and the Agent) as is necessary so that,
after giving effect to any reassignment of Retail Obligations then being
made, the sum of the Retail Amount Outstanding plus the Wholesale Aggregate
Invested Amount would not exceed the Short-Term Commitment Amount,
determined as aforesaid. There shall be no increase in the Retail Deferred
Payment and no payment pursuant to clause (i) of subsection 2.4(a) of this
Agreement with respect to any such Retail Obligations so reassigned.
2.6 Interest on Overdue Payments. If any amount shown by any
Settlement Statement to be payable to the Agent is not paid on the relevant
Settlement Date, such amount shall bear interest from such Settlement Date
until such amount is paid in full at a rate per annum equal to the greater
of (i) the Applicable Yield plus 2.0% and (ii) the Prime Rate plus 2.0%.
2.7 Discount and Interest Calculations. Calculations of discounts
and per annum rates under this Agreement shall be made on a monthly basis
and on the basis of a year of 365 days (or 366 days in a leap year) for
actual days elapsed.
ARTICLE III
SELLER'S SERVICING OBLIGATIONS: COLLECTIONS; MAINTENANCE OF RECORDS
3.1 Collections and Applications.
(a) Identification of Collections. The parties
acknowledge that the Seller has established a system whereby the Seller
can, within two Business Days of the receipt thereof by the branch offices
of the Seller, identify collections as attributable to the Sold Retail
Obligations, and from and after the Replacement Effective Date, the Seller
will follow the established system of collections and remittances described
in subsections 3.1(b) and 3.1(c).
(b) Deposit of Collections. All collections of proceeds
of, or other payments in connection with, the Sold Retail Obligations will
be paid by the obligors under such Sold Retail Obligations to the branch
offices of the Seller or to the credit of the Seller by direct deposit to a
branch bank account of the Seller (each such account being herein called a
"Branch Account"). Such branch offices will deposit all collections
received as soon as practicable (in accordance with customary procedures)
following receipt thereof (whether attributable to the Sold Retail
Obligations or otherwise) into a Branch Account. Unless and until the
Agent shall deliver a Daily Remittance Notice to the Seller in accordance
with subsection 3.1(c), the Seller shall transfer or cause to be
transferred to the Agent on each Settlement Date under this Agreement an
amount equal to the collections received by the Seller on account of the
Sold Retail Obligations during the Settlement Period which next precedes
such Settlement Date. The Seller shall transfer or cause to be transferred
to the Agent all collections applicable to the Sold Retail Obligations and
deposited in a Branch Account from but not including the related Date of
Sale. If the Seller shall transfer funds to the Application Account on
account of any item received by the Seller which is subsequently returned
or dishonoured, then the Seller may deduct the amount of such item from the
funds otherwise transferred to the Application Account on the first
Business Day after the Seller knows that such item has been returned or
dishonoured.
(c) Daily Remittance Notices. At the written request of
the Required Banks, and provided that and only if at the time of such
request at least one class of the senior unsecured debt of the Guarantor is
rated Level V, the Agent shall deliver a Daily Remittance Notice to the
Seller. The Seller acknowledges and agrees that the Required Banks may in
their sole discretion require the Agent to deliver a Daily Remittance
Notice at any time, except as provided in the preceding sentence, and the
Agent agrees that it may deliver a Daily Remittance Notice only at the
request of the Required Banks. From and after the second Business Day next
following receipt by the Seller of a Daily Remittance Notice in accordance
with the preceding sentence, the Seller shall, within two Business Day of
receipt by the branch office of such items, identify those collections
which are on account of the Sold Retail Obligations and shall, on the
Business Day next following the date of such identification, transfer or
cause to be transferred in immediately available funds to the Application
Account an aggregate amount equal to the collections so identified as
attributable to the Sold Retail Obligations. In addition to the foregoing
the Seller shall no later than the fourth Business Day following receipt of
a Daily Remittance Notice, transfer or cause to be transferred to the
Application Account all collections then held by the Seller (including
those collections deposited in a Branch Account) attributable to the Sold
Retail Obligations which were to have been remitted to the Agent on each
Settlement Date next following receipt of such Daily Remittance Notice. On
each Settlement Date following receipt by the Seller of a Daily Remittance
Notice, an amount equal to the collections deposited in the Application
Account during the immediately preceding Settlement Period shall be
transferred to the Agent from the Application Account. On the Business Day
next following such Settlement Date, any interest or other earnings on the
principal balance of the Application Account during the immediately
preceding Settlement Period shall be transferred to the Seller from the
Application Account.
(d) Treatment of Funds. The Agent shall treat all funds
deposited in the Application Account or otherwise received by the Agent
during a Settlement Period after the delivery of a Daily Remittance Notice
as collections for purposes of this Agreement as of the Settlement Date
immediately following such Settlement Period.
(e) Application Account. Neither the Seller nor any other
Person claiming by, through or under the Seller, shall have any right,
title or interest in, or any control over the use of, or any right to
withdraw moneys from, the Application Account. Amounts credited to the
Application Account may be invested by the Agent in Cash Equivalents, which
investments shall be liquidated as necessary, on each Settlement Date. Any
interest or other earnings on the principal balance of the Application
Account shall be for the account of the Seller and shall be distributable
in accordance with subsection 3.1(c). The Seller agrees that the Agent
shall not be responsible for any loss or liability arising in respect of
such investments (including as a result of the liquidation before maturity
of any such investments) except to the extent that such loss or liability
is a result of the Agent's gross negligence or wilful misconduct.
(f) Cancellation of Daily Remittance Notice. Upon receipt
of a Daily Remittance Notice, the Seller shall comply with the provisions
of subsections 3.1(b) through 3.1(e) until the Settlement Date applicable
to each Sold Retail Obligation next following the date on which such Daily
Remittance Notice shall be cancelled by a written notification to such
effect delivered at any time by the Agent to the Seller. Such notification
shall be delivered either at the written request of the Required Banks or
upon receipt by the Agent of satisfactory evidence that no class of the
senior unsecured debt of the Guarantor is rated Level V.
3.2 Collections by Seller.
(a) Seller's Servicing Duties. The Seller will, at the
Seller's cost and expense and as agent for the Banks and the Agent, but
subject at any time to the right of the Banks (through the Agent) to direct
and control, endeavour to collect, as and when the same becomes due, the
amounts owing on each Sold Retail Obligation, and in so doing the Seller
will apply the standard of care and diligence which would be prudent and
businesslike for the administration and collection of its own accounts
receivable; and, without restricting the generality of the foregoing, the
Seller shall comply with the following provisions of this section 3.2.
(i) Payment made on any Sold Retail Obligation shall
be applied in the direct order of maturity of
payment due thereon.
(ii) In the event of default under any Sold Retail
Obligation, the Seller shall have the power and
authority, on behalf of the Banks, but at the
Seller's cost and expense, to take such action in
respect of any Sold Retail Obligation (including,
in the case of any Sold Retail Obligation in
respect of which a security interest in goods
shall have been obtained, the repossession and
resale of such goods), as the Seller, in the
absence of contrary instructions from the Agent,
may deem advisable. In no event shall the Seller
be entitled to take any action which would make
the Agent or any Bank a party to any litigation
without the Agent's or such Bank's express prior
written consent. In the enforcement or collection
of any Sold Retail Obligation, the Seller shall be
entitled to sue the obligor in its own name, if
possible, or, if, but only if, the Agent consents
in writing, in the name of the Agent on behalf of
the Banks.
(iii) Subject to section 3.2(f), the Agent may at any time by
notice in writing terminate the authority of the Seller
to act as agent for and on behalf of the Banks and the
Agent as set forth in this subsection 3.2.
(iv) If the Seller repossesses goods, as aforesaid, or
elects to use legal proceedings to enforce any
Sold Retail Obligation, then unless and until the
Agent shall have given the Seller written notice
to the contrary, the act of repossession or of
commencing such litigation shall be deemed to be
an automatic reconveyance by the Agent and the
Banks, without recourse, representation or
warranty whatsoever, to the Seller of all of the
Agent's and the Banks' right, title and interest
in and to such Sold Retail Obligation, and upon
request by the Seller, the Agent will execute and
deliver a separate instrument confirming such
reconveyance. As the price for such reconveyance,
the Seller agrees to pay the Agent an amount equal
to all future proceeds collected on such Sold
Retail Obligation which the Agent had a right to
retain by virtue of its prior purchase.
(v) The proceeds of any reconveyance under subsection
3.2(a)(iv) shall constitute collections hereunder.
In addition, all proceeds or benefits of any
physical damage, life or disability insurance
policies which are received by the Seller and
which relate to any Sold Retail Obligations shall
be treated as collections hereunder and shall be
remitted by the Seller to the Agent on the next
Settlement Date or on such earlier date as may be
required if the Seller is in receipt of a Daily
Remittance Notice.
(vi) The Seller shall be entitled to retain late
charges and extension fees received by it in the
course of its administration of the Sold Retail
Obligations.
(b) Indemnification. The Seller hereby agrees to defend and
indemnify the Agent and the several Banks against all costs, expenses,
claims and liabilities in respect of any action taken by the Seller
relative to any Sold Retail Obligation, or arising out of any failure of
compliance of any Sold Retail Obligation with the provisions of any law or
regulation, whether federal, provincial or municipal, applicable thereto
(including, without limitation, usury and consumer protection laws and
regulations). In the event of any repossession of goods, as aforesaid, the
Seller agrees to resell such goods in a commercially reasonable manner for
the account of the Banks in accordance with the requirements of all
applicable laws and regulations and shall remit to the Agent the gross sale
proceeds thereof net of the account debtor's equity of redemption, if any.
Neither the Agent nor any Bank shall have any obligation to take any action
or commence any proceedings to realize upon any Sold Retail Obligation
(including, without limitation, any Defaulted Retail Obligation), or to
enforce any of its rights or remedies with respect thereto. Any monies
collected by the Seller pursuant to subsections 3.1 and 3.2 shall be held
in trust by the Seller and shall not constitute property of the Seller and
shall be remitted promptly to the Agent in accordance with subsection 3.1.
(c) Power of Attorney. The Seller hereby irrevocably grants to
the Agent an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of the Seller
and/or in its own name on behalf of the Banks all steps necessary or
advisable to endorse, negotiate or otherwise realize on any writing or
other right of any kind held or owned by the Seller or transmitted to or
received by the Agent as payment on account or otherwise in respect of any
Sold Retail Obligation including, without limitation, to take in the name
of the Seller and/or in its own name all steps necessary or advisable to
enforce or realize on any Sold Retail Obligations and all guarantees
thereof and collateral security therefor.
(d) Service Default. Any one of the following events that
shall occur and be continuing with respect to the Seller shall constitute a
"Service Default" hereunder:
(i) any failure by the Seller to make any payment, transfer
or deposit or to give instructions or to give notice to
the Agent to make such payment, transfer or deposit on
or before the date occurring five days after the date
such payment, transfer or deposit or such instruction
or notice is required to be made or given, as the case
may be, under the terms of this Agreement;
(ii) failure on the part of the Seller duly to observe or
perform any other covenants or agreements of the Seller
set forth in this Agreement which has a material
adverse effect on the Banks and which continues
unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the
same to be remedied, shall have been given to the
Seller by the Agent; or the Seller shall delegate its
duties under this Agreement, except as permitted by
section 3.2(c);
(iii) any representation, warranty or certification made by
the Seller in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to
have been incorrect when made, which has a material
adverse effect on the rights of the Banks and which
material adverse effect continues for a period of 60
days after the date on which written notice thereof,
requiring the same to be remedied, shall have been
given to the Seller by the Agent;
(iv) any Insolvency Event (as defined in the Wholesale PSA)
shall occur with respect to the Seller.
The Seller shall immediately notify the Agent in writing of any Service
Default; however, the failure by the Seller so to notify the Agent with
respect to the occurrence of any event listed in this section 3.2(d) shall
not affect the characterization of such event as a Service Default.
(e) Force Majeure. Notwithstanding the foregoing, a delay in or
failure of performance under section 3.2(d)(i) for a period of 10 Business
Days after the grace period specified therein or under section 3.2(d)(ii)
or 3.2(d)(iii) for a period of 60 Business Days after the grace specified
therein, shall not constitute a Service Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by the
Seller and such delay or failure was caused by an act of God or the Queen's
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve the
Seller from using its best efforts to perform its respective obligations in
a timely manner in accordance with the terms of this Agreement and the
Seller shall provide the Agent, the Seller and the Banks with a certificate
of a Responsible Officer of the Seller giving prompt notice of such failure
or delay by it, together with a description of its efforts so to perform
its obligations.
(f) Termination of Servicing by Seller. At the written request
of the Required Banks, at any time after the occurrence of a Service
Default which has not been remedied within the grace period specified
therefor under section 3.2(d) or excused pursuant to section 3.2(e), the
Agent shall by notice in writing to the Seller terminate the Seller's
functions as to all of the administrative, servicing and collection
functions provided for herein (such notice being herein referred to as
notice of a "Complete Servicing Transfer"). The Seller acknowledges and
agrees that the Required Banks may in their sole discretion require the
Agent to deliver a notice of Complete Servicing Transfer at any time
provided that at such time a Service Default has occurred and is
continuing. Upon the occurrence of a Complete Servicing Transfer, without
limitation:
(i) the Agent or its designee shall administer the
servicing functions in any manner it deems fit,
provided that the Agent or its designee will
furnish or cause to be furnished to the Seller
such information as the Seller needs to perform
its obligations under subsections 4.1 and 4.2;
(ii) the Agent shall, at any time thereafter, be
entitled to notify the obligors on any Sold Retail
Obligations to make payment of amounts due
thereunder directly to the Agent or its designee;
(iii) the Seller shall, at its own expense (x) if so
requested by the Agent, endorse each instrument,
if any, evidencing any Sold Retail Obligation to
the Agent in such manner as the Agent shall direct
and (y) further perform any and all acts and
execute any and all documents as may be reasonably
requested by the Agent in order to effect the
purposes of this Agreement and the sale of Retail
Obligations hereunder and to perfect and protect
the ownership interests of the several Banks in
the Sold Retail Obligations;
(iv) the Seller shall, at its own expense, cause to be
transmitted directly to the Agent or its designee
all cash, cheques, drafts and other instruments or
items for the payment of money which may be
received by the Seller as payment on account or
otherwise in respect of any Sold Retail
Obligation, provided that the Seller may maintain
possession of such items or instruments mistakenly
delivered to it at the time a notice of Complete
Servicing Transfer is received by the Seller, in
trust for the Agent, so long as the Seller
complies with the provisions of subsection 3.1
with regard to such items or instruments and the
proceeds thereof as if a Complete Servicing
Transfer has not occurred;
(v) the Seller and CFC will upon written request by
the Agent and at their own cost and expense (A)
deliver to the Agent or its designee the Contracts
relating to the Sold Retail Obligations, and all
books, accounts, ledgers, computer records and
other records and materials pertaining thereto,
(B) grant to the Agent or its designee a non-
exclusive royalty-free licence to use all the
application software and computer programs then
being used in connection with the administration,
servicing and collection of the Sold Retail
Obligations and owned by the Seller or CFC (the
"Software"), provided, however, that any such
licence shall be restricted to the administration,
servicing and collection of Sold Retail
Obligations and shall contain such other terms as
the Seller and CFC may reasonably require to
protect their proprietary interests in the
Software, such terms to be consistent with the
provisions and intent of this clause (B), and (C)
deliver the Software in machine readable and
printed form to the Agent or its designee,
together with such other documentation and
material which may be reasonably requested by the
Agent in support of the Software including,
without limitation, specifications, source
listings, user manuals, drawings, flow charts,
methods, practices and the like; and
(vi) do all such other acts and things as the Agent may
reasonably request for the purpose of giving
effect to the provisions and intent of this
subsection 3.2(f).
(g) Reinstatement of Servicing by Seller. Upon receipt of a
notice of a Complete Servicing Transfer, the Seller shall comply with the
provisions of subsection 3.2(f) hereof until the Settlement Date next
following the date on which such Complete Servicing Transfer shall be
cancelled by a written notification to such effect delivered at any time by
the Agent (which notification shall be delivered only at the written
request of the Required Banks in their sole discretion) to the Seller.
3.3 Maintenance of Records.
(a) Access, etc. The Seller will hold in trust for the Agent and
the several Banks at the office of the Seller referred to above, or at one
or more of the Seller's branch offices, all Sold Retail Obligations,
together with such books of account and other records as will enable the
Agent or its designee to determine at any time the status thereof. The
Seller will permit the Agent (or Deloitte & Touche on behalf of the Agent
but at the expense of the Seller) at any time and from time to time to
inspect, audit, check and make abstracts from the Seller's books, accounts,
ledger cards, computer and other records, or other papers pertaining to
such Sold Retail Obligations and the Seller will at any time and from time
to time provide access to all information necessary or appropriate for the
Agent (or Deloitte & Touche on behalf of the Agent but at the expense of
the Seller) to review and evaluate the Seller's financial controls and
procedures.
(b) Delivery of Records and Contracts. From time to time upon
the written request of the Agent, the Seller at its own expense will
deliver to the Agent: (i) a schedule of the Sold Retail Obligations
indicating as to each such Sold Retail Obligation information as to the
obligor thereon, the unpaid balance thereof and the location of the
Contract evidencing such Sold Retail Obligation and such other information
as the Agent may deem appropriate, and (ii) any such Contract and such
records pertaining thereto as the Agent may deem essential to enable it to
enforce its rights thereunder. In addition, upon the written request of
the Agent, the Seller will deliver all such Contracts and records
pertaining thereto to any agent selected by the Agent. So long as such
Contracts are in possession of the Seller, such Contracts, together with
ledger cards or other account or computer records, if any, relating
thereto, will be held in trust for and kept safely for the Agent in filing
cabinets or other suitable containers.
(c) Marking of Records. Each computer record relating to Sold
Retail Obligations and all other account records relating to such Sold
Retail Obligations maintained at the principal office of CFC will be marked
with the following legend: "Sold to certain financial institutions party to
a certain Short-Term Retail Purchase and Servicing Agreement dated as of
May 23, 1994 through Royal Bank of Canada acting as agent".
(d) Segregation of Records. Upon request of the Agent, the
Seller will: (i) segregate from all other receivables then owned or being
serviced by the Seller all Contracts relating to a Sold Retail Obligation;
(ii) hold in trust and safely keep such Contracts in separate filing
cabinets or other suitable containers marked to show the Agent's and the
Banks' interest with the legend specified in section 3.3(c) above and
maintained in such place or places as shall be designated by the Agent and
(iii) mark all Contracts relating to a Sold Retail Obligation with the
legend specified above.
3.4 Rebates, Adjustments, Returns and Reductions.
(a) The amount of any rebate, refund or adjustment of any Sold
Retail Obligation, the amount owing for any returns or cancellations or the
amount of any other reduction of any payment (including, without limitation
reductions in the anticipated amount of finance charges as the result of
any prepayment of any Sold Retail Obligation) under any Sold Retail
Obligation shall be treated as a collection thereon by the Seller for
purposes of this Agreement and shall: (i) during the period when a Daily
Remittance Notice is in effect, be deposited in the Application Account on
the second Business Day next following the day of such rebate, refund,
adjustment, return or reduction and shall be treated as a collection
thereon in accordance with subsection 3.1(c), and (ii) in all other cases,
be paid to the Agent on the next Settlement Date, provided that, with
respect to the Sold Retail Obligations purchased by the Banks as of any
Date of Sale, the Seller may, in any subsequent period of twelve
consecutive calendar months, extend any one instalment due under any such
Sold Retail Obligation for up to two periods of up to one calendar month
each, and such extensions shall not give rise to a deposit obligation or be
treated as a collection hereunder.
(b) The provisions of this subsection 3.4 shall not affect the
Seller's right to grant or receive any rebates, adjustments, returns or
reductions on any Retail Obligation prior to the Date of Sale thereof.
ARTICLE IV
ADJUSTMENTS; SETTLEMENTS
4.1 Adjustments.
(a) Date of Adjustments. Each Settlement Date is hereby
designated as a date for the purpose of making the following discount and
timing adjustments with respect to all collections received by the Seller
(whether (i) remitted to the Agent on the Settlement Date next following
receipt by the Seller or, (ii) in accordance with subsection 3.1(c),
transferred to the Application Account within two Business Days of receipt
by the branch offices of the Seller) in respect of the Sold Retail
Obligations during the Settlement Period next preceding such Settlement
Date.
(b) Anticipated Collections. Not less than five Business Days
prior to each Closing Date hereunder, the Seller shall deliver to the Agent
a schedule setting forth with respect to any sale of Retail Obligations on
such Closing Date, the anticipated collections for each Settlement Period
on the Retail Obligations to be sold to the Banks as of the related Date of
Sale (expressed in cumulative percentages of such Retail Obligations) (each
schedule of anticipated collections for each Settlement Period applicable
to the Sold Retail Obligations purchased on any Closing Date being herein
referred to as an "Anticipated Collection Schedule" applicable to such
Retail Obligations). Each Anticipated Collection Schedule delivered after
the Replacement Effective Date, whether delivered prior to or after the
delivery by the Agent of a Daily Remittance Notice, will be prepared on the
assumption that all amounts collected by the Seller during each Settlement
Period applicable to the Sold Retail Obligations to which such Anticipated
Collection Schedule relates will be received by the Agent on the Settlement
Date applicable to such Sold Retail Obligations next succeeding such
Settlement Period.
(c) Fast Pay/Slow Pay Adjustments. The Seller does not
guarantee collection of the Sold Retail Obligations. However, with respect
to the Retail Obligations purchased by the Banks hereunder as of any
related Date of Sale, if the cumulative aggregate amount of collections
received by the Seller or, in accordance with subsection 3.1, by the Agent,
for any related Settlement Period on such Retail Obligations purchased by
the Banks as of any related Date of Sale is less than the cumulative
aggregate amount of anticipated collections therefor, the Seller shall pay
the Agent on the next succeeding Settlement Date as a discount adjustment,
an amount determined by multiplying the amount of the Applicable Adjustment
Percentage (as hereinafter defined) of the amount of the deficiency by a
Discount Factor (as hereinafter defined) based upon the Fixed Rate
applicable to such Retail Obligations for the period from and including
such Settlement Date to the next succeeding Settlement Date. On the other
hand, if the cumulative aggregate amount of such collections exceeds the
cumulative aggregate amount of such anticipated collections, the Agent
shall credit to the Seller, as a discount adjustment, an amount determined
by multiplying the Applicable Adjustment Percentage of the amount of the
excess by a Discount Factor based upon the Fixed Rate applicable to such
Retail Obligations for the period from and including such Settlement Date
to the next succeeding Settlement Date. The Primary Retail Deferred
Payment applicable to such Retail Obligations shall be increased by the
amount referred to in the preceding sentence and applied as provided in
section 4.2(c) hereof.
(d) Applicable Adjustment Percentage. As used herein, the term
"Applicable Adjustment Percentage" shall mean, in respect of any Sold
Retail Obligations purchased by the Banks as of the related Date of Sale,
that percentage determined by dividing:
(i) the difference between (A) the anticipated amount of
the collections to be received by the Agent on the
Settlement Date next succeeding a Settlement Period
applicable to such Sold Retail Obligations (in
accordance with the assumptions made in preparing the
related Anticipated Collection Schedule) on account of
such Sold Retail Obligations and (B) the anticipated
amount to be released by the Agent to the Seller from
the Primary Retail Deferred Payment applicable to such
Sold Retail Obligations pursuant to subsection 4.2(c),
on such Settlement Date (in accordance with the
assumptions made in preparing the related Anticipated
Collection Schedule), by
(ii) the anticipated amount of the collections to be
received by the Agent on account of such Sold Retail
Obligations on such Settlement Date (in accordance with
the assumptions made in preparing the related
Anticipated Collection Schedule).
(e) Discount Factor. As used herein, the term "Discount Factor"
shall mean, with respect to the period from one Settlement Date to the next
succeeding Settlement Date, a fraction, the numerator of which is
(i) the product obtained by multiplying (A) the decimal
equivalent of the Fixed Rate applicable to the purchase
of the relevant Retail Obligations by (B) a fraction,
the numerator of which is the number of days from and
including such Settlement Date to but not including the
next succeeding Settlement Date and the denominator of
which is the number of days in the year (i.e. 365, or
366 in a leap year),
and the denominator of which is
(ii) the said numerator described in (i) plus one.
4.2 Settlement Statements; Charging Defaulted Obligations to the
Deferred Payment; Adjustments to the Deferred Payment.
(a) Settlement Statement. Not later than five Business Days
prior to each Settlement Date, until all the Sold Retail Obligations have
been paid in full and all amounts owing to the Agent on account thereof
have been transferred to the Agent, the Seller shall submit to the Agent a
Settlement Statement for each group of Retail Obligations purchased
hereunder or under the 1993 RPA on a related Closing Date, substantially in
the form of Exhibit C hereto, which shall set forth with respect to the
Sold Retail Obligations, among other things:
(i) the total collections received by the Agent on such
Retail Obligations up to and including the last day of
the next preceding Settlement Period applicable to such
Sold Retail Obligations, including collections pursuant
to subsection 3.4 and collections on Defaulted Retail
Obligations theretofore charged to the Retail Deferred
Payment applicable to such Retail Obligations and for
which the Seller shall not have previously accounted to
the Agent;
(ii) the balance on such Retail Obligations (A) on which the
obligor thereon is in default in an amount payable
thereon for three or more consecutive months and/or (B)
with respect to which any of the events of the kind
described in clauses (a) through (k) of section 7.1 of
the Short-Term RPA shall have occurred in respect of
the obligor or its assets or liabilities (such Retail
Obligations being herein collectively called "Defaulted
Retail Obligations"); and
(iii) such other information as the Agent may request for the
purpose of effecting an accounting and settlement hereunder.
The form of Settlement Statement provided in Exhibit C will be varied to
the extent necessary to give effect to the provisions and intent of this
Agreement, it being acknowledged and agreed that in the event of any
inconsistency between the provisions of this Agreement and any Settlement
Statement delivered pursuant to this Agreement, the provisions of this
Agreement will prevail. If any application of any Retail Deferred Payment
Excess is required on any Settlement Date pursuant to clauses (i), (ii),
(iii), (iv) and (v) of subsection 4.2(c), then concurrently with the
delivery of each Settlement Statement provided for above, the Seller shall
submit to the Agent a further statement or statements in a form to be
agreed upon between the Agent and the Seller, which statement or statements
shall give effect to the application of the Retail Deferred Payment Excess.
(b) Defaulted Obligations. Subject as hereinafter provided,the
Agent may, at its option, on the Settlement Date on which a Sold Retail
Obligation is first identified as a Defaulted Retail Obligation, charge to
the Retail Deferred Payment related to the group of Sold Retail Obligations
of which such Defaulted Retail Obligation is a part (such related Retail
Deferred Payment being herein called the "Primary Retail Deferred Payment")
an amount equal to the outstanding balance on such Defaulted Retail
Obligation, and the Agent may, at its option, at any time charge any other
amount due with respect to the Sold Retail Obligations (including, without
limitation, amounts payable to the Agent pursuant to subsection 4.1(b), but
without prejudice to any right of the Agent to collect such other amounts
directly from the Seller) which is then owed to the Agent under this
Agreement and which has not been paid by the Seller in accordance with its
terms, to such Primary Retail Deferred Payment; provided that if such
Primary Retail Deferred Payment is less than the outstanding balance on
such Defaulted Retail Obligation or such other amount which is then being
charged thereto, the Agent may charge the difference to any other Retail
Deferred Payment the balance of which has not theretofore been remitted to
the Seller.
Defaulted Retail Obligations so charged to a Retail Deferred
Payment shall be retained by the Agent, and any collections thereafter made
thereon (together with any other amounts received by the Agent on account
of any other obligation of the Seller theretofore charged to such Retail
Deferred Payment) shall be credited to the applicable Retail Deferred
Payment and shall be dealt with as provided in subsection 4.2(c).
The Agent agrees with the Banks that in each case where the Agent
exercising the option provided in the first sentence of this subsection
4.2(b) elects not to charge to the Primary Retail Deferred Payment an
amount equal to the outstanding balance on a Sold Retail Obligation at the
time such Sold Retail Obligation is first identified as a Defaulted Retail
Obligation, the Agent shall give the Banks written notice of such election
within 20 days of the exercise thereof, describing in such notice in
reasonably complete detail the circumstances surrounding such election and
explaining why, in the Agent's reasonable opinion and in light of the
circumstances so described, the exercise of such election would not
reasonably be expected to prejudice the interests of the Banks.
(c) Adjustments to Deferred Payment. If after completion of the
transactions provided for in subsection 4.1(b) and in subsections
4.2(a)(ii) and 4.2(b), in each case on any Settlement Date, the Retail
Deferred Payments applicable to any Sold Retail Obligations exceed the
Required Retail Deferred Payment Level applicable to such Sold Retail
Obligations, then the amount of such excess (herein called the "Retail
Deferred Payment Excess" applicable to such Sold Retail Obligations) shall
be applied in the following order on such Settlement Date:
(i) to the payment to the Agent of amounts thereof up to an
aggregate amount equal to the aggregate amount of the
unpaid balances payable under Defaulted Retail
Obligations purchased on each Closing Date which have
not been charged against their related Primary Retail
Deferred Payments less the aggregate amount of all
previous applications pursuant to this clause 4.2(c)(i)
relative to such Defaulted Retail Obligations purchased
on each such Closing Date (applied firstly to the
payment of such amounts relative to the Defaulted
Retail Obligations purchased on any Closing Date with
the largest aggregate unpaid balance, and then to the
payment of such amounts relative to the Defaulted
Retail Obligations purchased on other Closing Dates in
descending order of their respective aggregate unpaid
balances);
(ii) to the credit of Retail Deferred Payments applicable to
those Sold Retail Obligations whose related Primary
Retail Deferred Payments are in amounts less than their
respective Required Retail Deferred Payment Levels
(applied firstly to the Primary Retail Deferred Payment
with the greatest percentage deficiency relative to its
Required Retail Deferred Payment Level, and then to the
other Primary Retail Deferred Payments in descending
order of their respective percentage deficiencies
relative to their Required Retail Deferred Payment
Levels);
(iii) to the payment of any amounts payable by the
Seller to the Agent under subsection 4.1;
(iv) to the payment of any other amounts payable by the
Seller to the Agent under this Agreement or under the
Short-Term RPA;
(v) to the payment to the Agent of the amounts of any
liabilities, losses, costs, damages and expenses
suffered or incurred by the Agent or any Bank as a
result of any claims or proceedings by obligors under
Contracts which are included in the Sold Retail
Obligations and which relate to the vehicles that are
the subject matter of such Contracts or the financing
thereof; provided that the amount to be applied in
respect of any Retail Obligation under this clause
4.2(c)(v) shall be limited to the unpaid balance of
such Contract on the related Date of Sale; and
(vi) subject to subsection 4.2(e), any remainder to the Seller.
(d) Required Retail Deferred Payment Level. As used herein, the
term "Required Retail Deferred Payment Level" applicable to any Sold Retail
Obligations shall mean the amount which is the greater of:
(A) the product of (I) the Deferred Percentage (Retail
Gross) with respect to such Retail Obligations
(determined as of such Settlement Date) times (II) the
unpaid balance of all such Retail Obligations, and
(B) the lesser of (I) the then unpaid balance of all such
Retail Obligations or (II) 4% of the sum of the Exact
Retail Amounts Due upon all such Retail Obligations as
of the Date of Sale thereof.
provided, however, that anything contained in this Agreement to the
contrary notwithstanding, in no event shall the aggregate of the Retail
Deferred Payments applicable to those Retail Obligations which have unpaid
balances of 4% or less of their respective Exact Retail Amounts Due thereon
as of their respective Dates of Sale exceed the greater of (x) $2,287,500
and (y) an amount equal to 5.45% of the maximum value of the Retail Amount
Outstanding on any Settlement Date (the "Maximum"), and if such aggregate
does exceed the Maximum, then the respective amounts of such Retail
Deferred Payments shall be reduced proportionately so that the aggregate
thereof equals the Maximum.
(e) Payments to Seller After Default. After the occurrence of
any material default by the Seller in the observance or performance of any
of the terms or conditions of this Agreement or after the occurrence of any
of the Commitment Termination Events referred to in Article VII of the
Short-Term RPA and so long as such default or event is continuing, any
Retail Deferred Payment Excess applicable to Sold Retail Obligations which
remains after the applications provided for in clauses (i), (ii), (iii),
(iv) and (v) of subsection 4.2(c) shall be paid to the Seller only if at or
prior to the time of such applications the Agent has received repayment in
full of the Banks' investment in the Sold Retail Obligations together with
the total return on such investment contemplated by subsection 2.4(b).
(f) Adjustments in Payments to Banks. Notwithstanding any
other provision of this Agreement, it is agreed that it is the intention of
the parties that the Banks shall receive repayment of the Banks'
investments in Sold Retail Obligations purchased hereunder and shall
receive an annual rate of return (computed on a monthly basis) on the
Banks' investments in such Sold Retail Obligations for the period from each
Closing Date or Settlement Date, as the case may be, to the next succeeding
Settlement Date at the rates per annum described in subsection 2.4(b), and
that any Retail Deferred Payment Excess which would otherwise be payable to
the Seller on any Settlement Date pursuant to subsection 4.2(c)(vi) shall
be paid to the Agent if and to the extent necessary to give effect to such
intention with respect to the Sold Retail Obligations.
(g) Termination of Agreement. This Agreement will terminate
when all Sold Retail Obligations and all amounts payable to the Agent and
the Banks hereunder shall have been paid in full and any remaining Retail
Deferred Payment Excess shall have been applied in accordance with
subsection 4.2(c), and the Agent and the Banks shall have no further
agreement to purchase Retail Obligations hereunder; provided, however, that
the covenants, representations, warranties and indemnities of the Seller
and CFC to the Agent and the Banks set forth in this Agreement shall
survive such termination.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Covenants, Representations and Warranties by the Seller. The
Seller hereby covenants, represents and warrants to the Agent and to each
of the several Banks that:
(a) on each Closing Date hereunder:
(i) each Retail Obligation which is then being sold to the
Banks will be sold to the Banks free and clear of all
security interests, liens, charges and other
encumbrances;
(ii) each Retail Obligation to be sold to the Banks on such
Closing Date will arise out of and include a Contract
which (x) conforms in all respects to the definition of
the term "Contract" set forth in the first recital to
this Agreement and (y) has not more than 60 months
remaining from the Date of Sale for such Contract to
the maturity thereof and (z) had an original term of
not more than 73 months;
(iii) each such Retail Obligation will represent the genuine,
legal, valid and binding payment obligation in writing
of the obligor thereon, enforceable in accordance with
its terms (subject to all applicable bankruptcy,
insolvency or other laws affecting creditors' rights
generally and any limitations on the availability of
equitable remedies),
(iv) each such Retail Obligation will comply with all legal
requirements of the jurisdiction where it originated;
(v) each such Retail Obligation will not be a Defaulted
Retail Obligation; and
(vi) each such Retail Obligation will be secured by a first
perfected security interest or other first lien or
charge in the vehicle or vehicles financed thereby;
(b) the amount of the indebtedness outstanding on the Retail
Obligations sold to the Banks as of each Date of Sale hereunder will be the
amount set forth in the written statement of the Exact Retail Amount Due
upon such Retail Obligations to be furnished pursuant to subsection 2.3(e);
(c)(i) subject to timely registrations in accordance with
applicable legislation, each Assignment, when executed and delivered
pursuant hereto, (A) will vest in the Banks all of the right, title and
interest of the Seller in and to the Retail Obligations described therein
and (B) will constitute a valid assignment of Retail Obligations to the
Agent on behalf of the several Banks effective as against all creditors of
and purchasers from the Seller; (ii) the Seller will not have sold,
pledged, assigned or transferred, or granted any security interest in, such
Retail Obligations, and (iii) the Seller will not sell, pledge, assign or
transfer, or grant any security interest in, such Retail Obligations, or
any interest therein, to any other Person;
(d) all the requirements of all laws and regulations, whether
federal, provincial or municipal (including, without limitation, usury and
consumer protection laws and regulations), in respect of any of the Sold
Retail Obligations subject to such laws and regulations have been and will
be duly complied with;
(e) the Sold Retail Obligations are not, and will not be,
subject to any set-off, counterclaim, or other defence, whether arising out
of the transactions represented by the Sold Retail Obligations or
independently thereof;
(f) the Seller will not rescind or cancel any Sold Retail
Obligation or modify any term or provision of any thereof without the prior
written consent of the Agent, except that, while acting as agent for
collection hereunder, the Seller may, in the ordinary course of business
and upon accounting to the Agent as provided in subsection 3.4, grant
rebates or adjustments;
(g) the Seller will duly fulfil all obligations on its part to
be fulfilled under or in connection with the Sold Retail Obligations and
will do nothing to impair the rights, claims and benefits of the Banks or
the Agent under or with respect to the Sold Retail Obligations;
(h) the Seller will not prepare any financial statements which
shall account for nor will it in any other respect account for the
transactions contemplated hereby in a manner which is inconsistent with the
Banks' undivided ownership interest in the Sold Retail Obligations;
(i) the Seller is a corporation duly organized, validly existing
and in good standing under the laws of Canada, and has full power,
authority and legal right to execute and deliver this Agreement and each
Assignment and to perform and observe the terms and provisions hereof and
thereof;
(j) the execution and delivery of this Agreement and each
Assignment have been duly authorized by the Seller; and this Agreement and
each Assignment, when executed and delivered pursuant hereto,
(i) will constitute legal, valid and binding obligations or
acts, as the case may be, of the Seller in accordance
with their respective terms,
(ii) will not violate any provision of any law or regulation
or any order or decree of any court, arbitrator or
agency of government,
(iii) will not violate any provision of the articles of
incorporation or bylaws of the Seller or any
indenture, agreement or other undertaking to which
it is a party or by which it, or any of its assets
or properties, is bound or affected, and
(iv) will not be in conflict with, result in a breach of or,
with or without notice or lapse of time, constitute a
default under, any such indenture, agreement or other
undertaking or result in the creation or imposition of
any security interest, lien, charge or encumbrance of
any nature whatsoever upon any of such assets or
properties;
(k) the Seller will, in accordance with the Seller's written
practices and procedures, be responsible for ensuring that the obligors
under the Retail Obligations maintain collateral protection insurance;
(l) the Seller is duly qualified and in good standing in each
jurisdiction in which failure to qualify would render any Sold Retail
Obligation unenforceable by the Seller or the Agent;
(m) all instruments required by applicable legislation to be
registered or filed in order to protect, perfect and preserve the rights of
the Agent and the Banks in all the Sold Retail Obligations purchased by the
Banks through the Agent hereunder have been or shall be, within the time
prescribed by the applicable legislation, duly completed and executed by
the required parties and registered or filed in each appropriate office in
each applicable jurisdiction, and at the request of the Agent the Seller
will provide the Agent with appropriate evidence of the completion of such
registrations or filings;
(n) the Seller will not modify any term or provision of its
standard forms of Contracts in use in Canada in a manner which would
materially and adversely affect the position of the Agent or the Banks as
assignees thereof; and
(o) all representations and warranties of CCCL and the Guarantor
contained in the Short-Term RPA are and shall be true and correct as of the
date of each Retail Purchase.
5.2 Repurchase of Retail Obligations. If any of the foregoing
covenants, representations or warranties in respect of any Sold Retail
Obligation shall prove to have been materially incorrect at the applicable
Date of Sale or thereafter, or shall be materially breached, and such
incorrectness or breach shall not be corrected prior to the Settlement Date
in the calendar month after such incorrectness or breach became known to
the Seller, then on such Settlement Date, the Seller will pay the Agent
with respect to any affected Sold Retail Obligation, an amount equal to the
unpaid balance of such Sold Retail Obligation. Any amount paid by the
Seller under this provision shall be treated as a collection for purposes
of this Agreement. Upon receipt of such payment and all other amounts then
due to the Agent under this Agreement in respect of any so affected Sold
Retail Obligation, the Agent shall reassign its and the Banks' interest in
such affected Sold Retail Obligation, as applicable, to the Seller without
recourse, representation or warranty. The foregoing repurchase obligation
shall apply notwithstanding that the Agent at any time may have had or
should have had any knowledge of or with respect to such incorrectness or
breach.
5.3 Invalidity, etc. The obligations of the Seller to the Agent and
the Banks under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Sold Retail Obligation.
ARTICLE VI
CONDITIONS TO EFFECTIVENESS/PURCHASES
6.1 Effective Date. This Agreement shall become effective on the
Replacement Effective Date subject to the satisfaction of all conditions
precedent to the effectiveness of the Short-Term RPA contained in Article
IV thereof.
6.2 Conditions to Each Purchase. The obligation of the Banks to make
each purchase of Retail Obligations hereunder through the Agent (including
their initial purchase) on any Closing Date hereunder is subject to the
satisfaction of each and every of the following conditions:
(a) all conditions provided in the Short-Term RPA to each
Purchase (as defined in the Short-Term RPA) of Retail Obligations hereunder
shall have been satisfied;
(b) the Agent shall have received from each Bank, in immediately
available funds in accordance with section 7.3(c)(iii)(D), the full amount
of each such Bank's Purchase Percentage of the Retail Paid Percentage of
the Estimated Retail Amount Due upon the Retail Obligations to be purchased
on the Closing Date, provided that if the Agent shall not have received
from a Bank the full amount of such Bank's Purchase Percentage of the
Retail Paid Percentage of the Estimated Retail Amount Due upon such Retail
Obligations, then the amount of Retail Obligations which shall be purchased
on such Closing Date shall be reduced by an amount equal to the lesser of
(x) such defaulting Banks's Purchase Percentage of such Retail Obligations
and (y) such portion of such defaulting Bank's Purchase Percentage as the
other Banks shall not purchase;
(c) the Seller shall not be in default in the observance or
performance of any of the terms or conditions of this Agreement or of the
Short-Term RPA;
(d) the representations and warranties of the Seller set forth
in subsections 5.1 and of the Seller and CFC set forth in Article III of
the Short-Term RPA, shall be true and correct in all material respects on
and as of each Closing Date hereunder;
(e) the Seller shall have delivered to the Agent and to each of
the Banks the favourable written opinion of counsel for the Seller, dated
the relevant Closing Date, substantially in the form of Exhibit E hereto,
and covering such other legal matters as the Agent or its counsel may
reasonably request;
(f) there shall have been delivered to the Agent a certificate
executed by a Responsible Officer of the Seller, dated the relevant Closing
Date, to the effect that all instruments required by applicable legislation
to be registered or filed in order to protect, perfect and preserve the
rights of the Banks in all the Retail Obligations which are being sold by
the Seller to the Banks on such Closing Date have been or will be, within
the time prescribed by the applicable legislation, duly executed by the
required parties thereto and registered and filed in each appropriate
office in each applicable jurisdiction (which certificate shall also have
annexed thereto a schedule setting forth each such instrument and each such
office in which such registrations or filings have been or will be made and
such certificate shall also state that such instruments are the only
instruments required and such offices are the only offices in which
registration or filing is required by applicable legislation in order to
perfect the interest of the Banks in such Retail Obligations against all
creditors of and purchasers from the Seller);
(g) all legal matters incident to the execution and delivery of
this Agreement and to the purchases by the Banks of such Retail Obligations
shall be satisfactory to counsel for the Agent;
(h) the Seller shall have delivered to the Agent and each of the
Banks a certificate signed on behalf of the Seller by any of its
Responsible Officers to the effect that all conditions precedent to the
obligation of the Banks to purchase Retail Obligations on such Closing Date
have been satisfied; and
(i) the Period Losses as determined as of the Settlement Date
next preceding the Settlement Date next preceding such Closing Date, for
the 3 (three) month period immediately preceding the date of determination
shall not have exceeded 5% of the average unpaid balance of the Total
Portfolio during the 3 (three) month period immediately preceding such date
of determination.
ARTICLE VII
THE AGENT AND THE BANKS
7.1 For Benefit of Banks Only. The provisions of this Article
VII relating to the rights and obligations the Agent and the Banks inter se
shall be operative as between the Agent and the Banks only, and the Seller
shall have no rights hereunder or be entitled to rely for any purposes upon
such provisions.
7.2 Status of Agent. The Banks hereby confirm that the Agent
shall act as their administrative agent hereunder on their behalf in
accordance with and pursuant to Article VIII of the Short-Term RPA, and,
for greater certainty but without restricting the generality of the
foregoing, the Banks confirm that the Agent is irrevocably authorized and
directed to do all such things as may be necessary or reasonably incidental
to administering all collections and disbursements hereunder and to make
all such determinations and take all such actions as may be required from
time to time hereunder. Except as expressly modified or supplemented
herein, the Agent's rights, duties and liabilities hereunder shall be
governed by Article VIII of the Short-Term RPA in its entirety, including
without limitation all such provisions thereof relating to delegation of
duties, exculpation, reliance by the Agent, notice of default, non-reliance
on the Agent, and indemnification.
7.3 Purchase and Sale.
(a) Agreements to Purchase and Sell. Subject to the terms and
conditions set forth in this Agreement and in the Short-Term RPA, each Bank
hereby severally confirms and agrees with the Agent that on each Closing
Date it will purchase, with the Agent acting as intermediary as provided
herein, an undivided ownership interest in the Retail Obligations purchased
on such date equal to such Bank's Purchase Percentage of such Retail
Obligations for a portion of the purchase price calculated in accordance
with subsection 7.3(c)(i), and each Bank severally agrees with the Agent to
pay such Bank's respective portion of the Purchase Price on the terms and
conditions provided in this Article VII.
(b) Ownership Percentages. Each Bank's undivided interest in
the Sold Retail Obligations shall be, at any time, equal to such Bank's
Ownership Percentage thereof.
(c) Purchase Price; Adjustments on Account of Exact Amounts Due.
(i) Computation. The portion of the Purchase Price to be
paid by each several Bank for its addition to its
Ownership Interest in each group of Retail Obligations
purchased hereunder shall be an amount equal to such
Bank's Purchase Percentage of the Retail Paid
Percentage of the Estimated Retail Amount Due required
to be paid by the Agent to the Seller under this
Agreement on the Closing Date on which such Retail
Obligations are sold, plus or minus the amount of any
subsequent adjustment required by this subsection
7.3(c)(i) and subsections 7.6 and 7.7.
(ii) Effect of Purchase. Immediately upon the purchase, as
aforesaid, by a Bank of an addition to its Ownership
Interest, such Bank's Ownership Interest shall increase
by an amount equal to the purchase price paid by such
Bank for such addition on such date.
(iii) Remittances - Estimated Amounts. Promptly after
receipt by the Agent of notice from the Seller
designating a Closing Date, the Agent shall notify each
Bank thereof, and:
(A) promptly after receipt by the Agent of the
Seller's advice as to the Estimated Weighted
Average Life and the Estimated Fixed Rate Purchase
Proceeds, the Agent shall give notice to each Bank
of such estimates as well as the Estimated Fixed
Rate substantially in the form of Exhibit E
hereto;
(B) each Bank will promptly give notice to the Agent
of its Bank's BA/CDOR Spread and its Bank's
Reserve Adjustment by 10:30 a.m. (Toronto time) on
the Fixed Rate Determination Date substantially in
the form of Exhibit F-1 hereto, whereupon the
Agent will by 11:00 a.m. (Toronto time) calculate
and advise the Seller of the Fixed Rate by notice
substantially in the form of Exhibit F-2 hereto;
(C) promptly after receipt by the Agent on a Fixed
Rate Determination Date of the Seller's advice as
to the Weighted Average Life of the Retail
Obligations to be purchased by the Banks on the
Closing Date as well as the Retail Paid Percentage
of the Estimated Retail Amount Due upon the Retail
Obligations to be purchased, the Agent will give
notice to each Bank thereof as well as the amount
of such Bank's Purchase Percentage of the Retail
Paid Percentage of the Estimated Retail Amount Due
upon such Retail Obligations substantially in the
form of Exhibit G hereto; and
(D) the Bank will remit payment of its Purchase
Percentage of the Retail Paid Percentage of the
Estimated Retail Amount Due upon such Retail
Obligations to the Agent for receipt by the Agent
not later than 12:00 noon (Toronto time) on such
Closing Date.
(iv) Remittances - Exact Amounts. Promptly after receipt by
the Agent from the Seller of the statement of the Exact
Retail Amount Due upon the Retail Obligations purchased
by the Banks on any Closing Date, the Agent will advise
each Bank by giving notice substantially in the form of
Exhibit H hereto of:
(A) the amount of any payment to be made by the Agent
to the Seller under subsection 2.4(a) as an
adjustment (to reflect correction of estimates) of
the Estimated Retail Amount Due upon such Retail
Obligations; and
(B) the amount of such Bank's share of such payment
calculated on a pro rata basis according to such
Bank's Purchase Percentage of such Retail
Obligations.
Each Bank shall remit to the Agent, for receipt by the
Agent not later than 12:00 noon (Toronto time) on the
next Business Day following delivery of such advice to
such Bank, the amount of such Bank's share of such
payment. If the Exact Retail Amount Due upon the
Retail Obligations purchased by the Banks on any
Closing Date is less than the Estimated Retail Amount
Due upon such Retail Obligations, then upon receipt by
the Agent of the payment by the Seller to be made
pursuant to subsection 2.4(a), the Agent will promptly
remit the proceeds thereof to the Banks pro rata
according to their respective Purchase Percentages of
such Retail Obligations.
(d) Confirmation of Ownership Interests. Promptly after each
Settlement Date if there remains outstanding any Sold Retail Obligation,
the Agent will send to each Bank a written confirmation of such Bank's
Ownership Interest in the Sold Retail Obligations as of such Settlement
Date. The Agent shall hold this Agreement, all Sold Retail Obligations and
all funds on deposit in the Application Account (until paid to the Banks in
accordance with the terms hereof) for the benefit of the Banks in
accordance with the provisions and intent of this Agreement until the
Ownership Interests of the Banks have been reduced to zero and their
commitment to purchase has been terminated.
7.4 Maximum Amounts of Purchases. Notwithstanding anything
contained in this Agreement to the contrary, no Bank shall be required to
purchase an addition to its Ownership Interest, whether under subsections
7.3(a) or 7.3(c), such that after giving effect thereto (whether based upon
estimated or exact statements of the amount due) the amount of such Bank's
Ownership Interest would exceed the difference between (A) the Bank's
Commitment Amount and (B) the Bank's Purchase Percentage of the Short-Term
Wholesale Aggregate Invested Amount.
7.5 Sharing of Earned Discounts: Each Bank's pro rata share of
the aggregate amount of the discounts deducted by the Agent in computing
the purchase price of the Retail Obligations purchased under this Agreement
which shall have been earned by such Bank shall be calculated on the basis
that such Bank's annual rate of return (computed on a monthly basis) on its
investment calculated with respect to each Sold Retail Obligation shall be
equal to the Applicable Yield for such Sold Retail Obligation calculated as
if references to the "Blended BA/CDOR Spread" and "Blended Reserve
Adjustment" in the definition of "Fixed Rate" were references to the
related "Bank's BA/CDOR Spread" and "Bank's Reserve Adjustment" for such
Bank.
7.6 Distributions to Banks of Payments Received by Agent.
(a) Collections: All payments received by the Agent from the
Seller or otherwise on account of collection of amounts owing or payable on
or in respect of Sold Retail Obligations, or on account of the adjustments
required pursuant to Article IV with respect to such Sold Retail
Obligations, and any interest and other payments relating to such Sold
Retail Obligations which are received by the Agent from the Seller and
which are to be shared by all the Banks according to the provisions and
intent of this Agreement (other than the payments referred to below in
subsections 7.6(b), (c) and (d)), will be promptly remitted by the Agent to
the Banks (i) firstly, to the extent of the aggregate amount of the
discounts deducted by the Agent in computing the purchase price of all Sold
Retail Obligations which shall have been earned and not yet remitted
hereunder, pro rata according to their respective shares of the earned
discount calculated in accordance with subsection 7.5; and (ii) secondly,
to the extent of the balance, pro rata according to their respective
Purchase Percentages.
(b) All payments received by the Agent on account of the
commitment fee required pursuant to the Short-Term RPA shall be promptly
remitted by the Agent to the Banks pro rata according to their respective
Purchase Percentages.
(c) All payments received by the Agent on account of the
Facility Fees and Utilization Fees required by the Short-Term RPA and on
account of the reimbursement by the Seller for the costs, expenses, claims
and liabilities of the Agent shall be retained by the Agent for its own
account.
(d) All payments received by the Agent for the account of any
Bank pursuant to Article IX of the Short-Term RPA shall be promptly
remitted by the Agent to such Bank.
7.7 Further Payments on Account of Deferred Payment Excesses and
Timing Adjustments. Promptly after receipt by the Agent of each Settlement
Statement applicable to Sold Retail Obligations purchased by the Banks on
any Closing Date, the Agent will advise each Bank of (i) the amount of any
payment to be made by the Agent to the Seller on the relevant Settlement
Date pursuant to subsection 4.2(c)(vi) out of the Retail Deferred Payment
Excess applicable to any Sold Retail Obligations, and (ii) the amount of
such Bank's share of any such payments calculated on a pro rata basis
according to such Bank's Purchase Percentage. Each Bank shall remit to the
Agent, for receipt by the Agent not later than 2:00 p.m. (Toronto time) on
such Settlement Date, the amount of such Bank's share of any such payments.
7.8 Mechanics of Payments
(a) Payments by Banks. All payments to be remitted hereunder by
the Banks to the Agent shall be paid by the Banks to the credit of an
account maintained by the Agent at its branch located at Royal Bank Plaza,
200 Bay Street, Toronto, Ontario entitled "Chrysler Credit Canada Ltd.
Banks' Remittance Account".
(b) Payments by the Agent. All payments to be remitted
hereunder by the Agent to the Banks shall be promptly remitted by the Agent
to them at their respective offices in Toronto after receipt from the
Seller, and in any event any payments received by the Agent from the Seller
by 2:00 p.m. (Toronto time) on any day will be remitted to the Banks by
4:00 p.m. (Toronto time) on the same day.
7.9 Actions by Agent.
(a) Exercise of Rights.
(i) The Agent shall have the right but shall be under no
obligation: (A) to exercise any of the rights and powers which it has or
may have under or in respect of this Agreement or any Sold Retail
Obligation or any related document or instrument, (B) to take any actions
or proceedings to enforce any of the obligations or liabilities of the
Seller or CFC under or in respect of this Agreement or of the obligor or
any other person under or in respect of any Sold Retail Obligation or any
related document or instrument, or (C) to take any actions or proceedings
to realize upon or enforce the security or any of the other rights
constituted by any Sold Retail Obligation or any related document or
instrument. The Agent will advise the other Banks of any material actions
taken or proposed to be taken by it under this Agreement.
(ii) Notwithstanding the foregoing subsection 7.9(a)(i), the
Agent will exercise any such rights or powers or take any such actions or
proceedings when expressly requested in writing to do so by Banks having a
then aggregate Ownership Percentage of more than 50%, or if there are no
Sold Retail Obligations, by Banks having a then aggregate Purchase
Percentage of more than 50%, following a meeting to which all Banks have
been invited on not less than two Business Days' notice to discuss the
proposed request; provided, however, that (A) the Agent shall under no
circumstances be under any obligation to take over itself the
administration, servicing and collection of any of the Sold Retail
Obligations pursuant to subsection 3.2(f) of this Agreement, and (B) any
decision to deliver a Daily Remittance Notice to the Seller in accordance
with subsection 3.1(c) of this Agreement or to take over the
administration, servicing and collection of any of the Sold Retail
Obligations pursuant to subsection 3.2(f) of this Agreement may only be
taken upon the written request of the Required Banks.
(b) Complete Servicing Transfer. If the administration,
servicing and collection of the Sold Retail Obligations is taken over by
the Agent or by one of the other Banks as the Agent's designee pursuant to
subsection 3.2(f) of this Agreement, then the Agent or such other Bank
shall be reimbursed its costs and expenses in connection with such
administration, servicing and collection on a basis to be agreed upon by
all the Banks at that time. If such administration, servicing and
collection is taken over by a third party selected by the Banks, then the
costs and expenses of such third party will be paid severally by all the
Banks pro rata according to their respective Ownership Percentages at the
time when such costs or expenses were incurred or accrued. This subsection
7.9(b) shall survive the termination of this Agreement.
(c) Recovery From Seller or CFC. Any amounts paid by the Banks
to the Agent under subsection 7.9(b) hereof which are subsequently
recovered by the Agent from the Seller or CFC will be repaid by the Agent
to the Banks.
7.10 Non-Performance by Bank.
(a) Consequences of Default. In the event any Bank (in
this section 7.10 the "Defaulting Bank") shall fail to perform any
obligation to be performed by it hereunder, the Agent may terminate, and
thereby acquire, or place with other parties, the entire Ownership Interest
of such Defaulting Bank in the Sold Retail Obligations (whereupon such
Defaulting Bank shall cease to have an interest in such Sold Retail
Obligations) without, however, relieving such Defaulting Bank from any
liability for damages, costs and expenses suffered by the Agent or any
other Bank as a result of such failure on the part of such Defaulting Bank.
For the purposes of any distributions to Banks of the amounts referred to
in subsection 7.6(a) pursuant to clause (ii) of subsection 7.6(a), the
Purchase Percentage of any Defaulting Bank shall be adjusted appropriately
to reflect such Defaulting Bank's remaining Ownership Interest. For the
purposes of any distributions to Banks of the amounts referred to in
subsections 7.6(a) or 7.6(b), the Purchase Percentage of any Defaulting
Bank shall be deemed to be nil from and after the time of default.
(b) Purchase of Defaulting Bank's Interest. Without limiting
the foregoing, in the event that the Defaulting Bank shall fail to remit to
the Agent on any Closing Date such Bank's portion of the Retail Paid
Percentage of the Estimated Retail Amount Due on such date, then each other
Bank whose Maximum Commitment is not then fully utilized (after giving
effect to any purchase on such date other than the purchase described in
this subsection 7.10) agrees to purchase, in an amount not exceeding the
such Bank's Available Commitment, such Defaulting Bank's addition to its
Ownership Interest in the Sold Retail Obligation to be purchased on such
date and shall pay to the Agent, as the purchase price therefor, an amount
determined for each Bank (other than the Defaulting Bank) by multiplying
(i) the lesser of (A) such Defaulting Bank's portion of the Paid Percentage
of the Estimated Retail Amount Due on such date or (B) the sum of each
Bank's Available Commitment (other than the Defaulting Bank) times (ii) the
then percentage equivalent of a fraction the numerator of which is such
Bank's Available Commitment and the denominator of which is the sum of each
Bank's Available Commitment (other than the Defaulting Bank). Any
additional interest purchased by a Bank pursuant to this subsection 7.10
shall be deemed a part of such Bank's investment for purposes of the
definition of "Ownership Interest" as of the date of such purchase. The
purchase of an additional interest pursuant to this subsection 7.10 shall
not relieve the Defaulting Bank from any liability for damages, costs and
expenses suffered by the Seller, the Agent or any other Bank as a result of
such failure on the part of such Defaulting Bank.
(c) Liability of Banks to Agent. Each Bank hereby expressly
acknowledges that it shall be liable for any damages, costs or expenses
suffered by the Seller, the Agent or any other Bank as a result of any
failure to remit to the Agent on any Closing Date its portion of the Retail
Paid Percentage of the Estimated Retail Amount Due including, without
limitation, in the case of the Seller, all damages suffered as a result of
any failure of the Agent to purchase any Retail Obligations pursuant to
subsection 2.1.
7.11 Information. The Agent will forward or make available, as
it deems appropriate, to each Bank copies of
(a) each Settlement Statement received by the Agent from the
Seller; and
(b) all other documents or information so received and
considered pertinent by the Agent or reasonably requested by
the Bank.
ARTICLE VIII
MISCELLANEOUS
8.1 Short-Term RPA. This Agreement shall be subject in all
respects to the Short-Term RPA. In case of any conflict between the
provisions of the Short-Term RPA and this Agreement, the provisions of the
Short-Term RPA shall prevail.
8.2 Further Assurances. The Seller agrees that it will, at any
time and from time to time, do and perform any and all acts and execute any
and all further instruments required or reasonably requested by the Agent
to effect more fully the purposes of this Agreement and the sales of the
Retail Obligations hereunder, including without limitation, the execution
of any financing statements, financing change statements, affidavits,
notices or assignments relating to such Retail Obligations for filing under
the provisions of the legislation of any applicable jurisdiction.
8.3 Payments. Each payment to be made by the Seller or a Bank
hereunder shall be made by 2:00 p.m. (Toronto time) on the required payment
date and each payment to be made by the Agent hereunder shall be made by
2:00 p.m. (Toronto time) on the required payment date. Any such payments
shall be made in lawful money of Canada and each payment to be made by the
Seller or a Bank hereunder shall be made at the office of the Agent set
forth above without set-off or counterclaim and, with respect to any daily
collections required to be made hereunder, shall be deposited in the
Application Account pursuant to subsection 3.1.
8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario.
8.5 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
8.6 Amendments. This Agreement may not be modified, amended,
waived, supplemented or terminated except in accordance with the Short-Term
RPA.
8.7 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of (i) such provision in
any other jurisdiction or (ii) any other provision hereof in such or any
other jurisdiction.
8.8 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy or telex,
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, certified or registered
mail, or by courier, in the case of telecopy notice, when received, or, in
the case of telex notice, when sent, answerback received, addressed to the
parties as set forth in the signature pages hereto, or to such other
address as may be hereafter notified by the respective parties hereto and
any Person that may hereafter become a Bank, provided that any notice,
request or demand to or upon the Agent or the Banks pursuant to subsection
2.3(b)(ii) shall not be effective until received.
8.9 Successors and Assigns. This Agreement shall be binding
upon the parties hereto and shall enure to the benefit of the Seller, the
Agent, the Banks and their respective successors and assigns except that
the Seller may not assign or transfer any of its rights under this
Agreement without the prior written consent of the Required Banks.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P, Corp. Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir. Auto. Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-2009
Telex: 06-524712
BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P,Corp.&Invst.Bnkg.Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259 Title: Vice President
Telecopier: 416-594-2266
Telex: 06-218241
CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: Vice President
Toronto, Ontario
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
SWISS BANK CORPORATION
(CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Associate Dir. Mrch. Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Mrch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
Exhibit 10-M
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.
as Retail Seller and Initial Wholesale Seller
CHRYSLER FINANCIAL CORPORATION
as Guarantor
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
MORGAN BANK OF CANADA
SWISS BANK CORPORATION (CANADA)
as Banks
ROYAL BANK OF CANADA
as Agent
___________________________________________________________________________
$175,000,000
LONG-TERM RECEIVABLES PURCHASE AGREEMENT
May 23, 1994
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . - 1 -
ARTICLE II - AMOUNT AND TERMS OF COMMITMENTS
2.1 Replacement. . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
2.2 Commitment.. . . . . . . . . . . . . . . . . . . . . . . . . - 2 -
2.3 Related Documents. . . . . . . . . . . . . . . . . . . . . . - 2 -
(a) Long-Term Retail PSA . . . . . . . . . . . . . . . . . . . . - 2 -
(b) Long-Term Wholesale Series Supplement. . . . . . . . . . . . - 2 -
2.4 Procedure for Purchase.. . . . . . . . . . . . . . . . . . . - 3 -
(a) Seller Procedure . . . . . . . . . . . . . . . . . . . . . . - 3 -
(b) Agent/Bank Deposit Procedure.. . . . . . . . . . . . . . . . - 3 -
2.5 Utilization Fee. . . . . . . . . . . . . . . . . . . . . . . - 3 -
2.6 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
2.7 Default Interest . . . . . . . . . . . . . . . . . . . . . . - 4 -
2.8 Termination or Reduction of Commitments. . . . . . . . . . . - 4 -
(a) Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
(b) Fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4 -
(c) Minimum Reduction. . . . . . . . . . . . . . . . . . . . . . - 4 -
2.9 Increase in Commitments. . . . . . . . . . . . . . . . . . . - 4 -
2.10 Rate of Return.. . . . . . . . . . . . . . . . . . . . . . . - 5 -
(a) Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . - 5 -
(b) Wholesale. . . . . . . . . . . . . . . . . . . . . . . . . . - 5 -
2.11 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . - 5 -
(a) Pro Rata Treatment.. . . . . . . . . . . . . . . . . . . . . - 5 -
(b) Payments to Agent. . . . . . . . . . . . . . . . . . . . . . - 5 -
(c) Distribution of Payments by Agent. . . . . . . . . . . . . . - 5 -
2.12 Addition of Wholesale Sellers. . . . . . . . . . . . . . . . - 6 -
ARTICLE III- REPRESENTATIONS AND WARRANTIES
3.1 Corporate Existence; Compliance with Law . . . . . . . . . . - 7 -
3.2 Corporate Power; Authorization; Enforceable. . . . . . . . . - 7 -
3.3 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.4 No Material Litigation.. . . . . . . . . . . . . . . . . . . - 8 -
3.5 No Default.. . . . . . . . . . . . . . . . . . . . . . . . . - 8 -
3.6 Voting Control.. . . . . . . . . . . . . . . . . . . . . . . - 8 -
ARTICLE IV - CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of Long-Term RPA.. . . . . . . . - 8 -
4.2 Notice of Replacement Effective Date.. . . . . . . . . . . .- 11 -
4.3 Failure to Reach Replacement Effective Date. . . . . . . . .- 11 -
4.4 Conditions to Each Purchase. . . . . . . . . . . . . . . . .- 11 -
ARTICLE V - COVENANTS
5.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .- 13 -
5.2 Voting Control . . . . . . . . . . . . . . . . . . . . . . .- 14 -
5.3 (a) Activities of the Seller . . . . . . . . . . . . . . . . . .- 14 -
(b) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . .- 14 -
(c) Guarantees . . . . . . . . . . . . . . . . . . . . . . . . .- 14 -
(d) Investments. . . . . . . . . . . . . . . . . . . . . . . . .- 15 -
(e) Agreements . . . . . . . . . . . . . . . . . . . . . . . . .- 15 -
(f) Maintenance of Separate Existence. . . . . . . . . . . . . .- 15 -
5.4 Accounting . . . . . . . . . . . . . . . . . . . . . . . . .- 16 -
5.5 Collateral Protection Insurance. . . . . . . . . . . . . . .- 16 -
ARTICLE VI - GUARANTEE
6.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . .- 16 -
6.2 Absolute and Unconditional Obligations . . . . . . . . . . .- 16 -
6.3 Discretion of Banks. . . . . . . . . . . . . . . . . . . . .- 17 -
6.4 General. . . . . . . . . . . . . . . . . . . . . . . . . . .- 17 -
ARTICLE VII - COMMITMENT TERMINATION EVENTS
7.1 Commitment Termination Events. . . . . . . . . . . . . . . .- 18 -
ARTICLE VIII - THE AGENT
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . .- 20 -
8.2 Delegation of Duties.. . . . . . . . . . . . . . . . . . . .- 20 -
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . .- 20 -
8.4 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . .- 21 -
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . .- 21 -
8.6 Non-Reliance on Agent and Other Banks. . . . . . . . . . . .- 22 -
8.7 Indemnification of Agent.. . . . . . . . . . . . . . . . . .- 22 -
8.8 Agent in Its Individual Capacity.. . . . . . . . . . . . . .- 23 -
8.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . .- 23 -
8.10 Exchange of Information. . . . . . . . . . . . . . . . . . .- 24 -
8.11 Netting of Payment.. . . . . . . . . . . . . . . . . . . . .- 24 -
8.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . . .- 24 -
8.13 For Benefit of Banks Only. . . . . . . . . . . . . . . . . .- 24 -
ARTICLE IX - INDEMNIFICATION
9.1 Payment of Expenses and Taxes. . . . . . . . . . . . . . . .- 24 -
9.2 Statements, Reports etc. . . . . . . . . . . . . . . . . . .- 26 -
9.3 Increased Costs. . . . . . . . . . . . . . . . . . . . . . .- 26 -
9.4 Reemployment Costs . . . . . . . . . . . . . . . . . . . . .- 27 -
9.5 Changes in Capital Requirements. . . . . . . . . . . . . . .- 28 -
9.6 Replacement of Banks . . . . . . . . . . . . . . . . . . . .- 30 -
9.7 Survival.. . . . . . . . . . . . . . . . . . . . . . . . . .- 30 -
ARTICLE X - MISCELLANEOUS
10.1 Amendments and Waivers.. . . . . . . . . . . . . . . . . . .- 31 -
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .- 32 -
10.3 No Waiver; Cumulative Remedies.. . . . . . . . . . . . . . .- 32 -
10.4 Survival of Representations and Warranties.. . . . . . . . .- 33 -
10.5 Successors and Assigns . . . . . . . . . . . . . . . . . . .- 33 -
10.6 Participation. . . . . . . . . . . . . . . . . . . . . . . .- 33 -
10.7 Optional Sale. . . . . . . . . . . . . . . . . . . . . . . .- 33 -
10.8 Sale of Interests. . . . . . . . . . . . . . . . . . . . . .- 34 -
10.9 Adjustments; Set-Off.. . . . . . . . . . . . . . . . . . . .- 35 -
10.10 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . .- 36 -
10.11 Severability.. . . . . . . . . . . . . . . . . . . . . . . .- 36 -
10.12 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . .- 36 -
10.13 Governing Law. . . . . . . . . . . . . . . . . . . . . . . .- 37 -
10.14 Submission To Jurisdiction; Waivers. . . . . . . . . . . . .- 37 -
10.15 Further Assurances . . . . . . . . . . . . . . . . . . . . .- 37 -
10.16 Termination. . . . . . . . . . . . . . . . . . . . . . . . .- 38 -
<PAGE>
SCHEDULES
SCHEDULE 1.1 DEFINITIONS
SCHEDULE 2.4 NOTICE OF REQUESTED PURCHASE
SCHEDULE 2.8 NOTICE OF REDUCTION OF LONG-TERM COMMITMENT AMOUNT
SCHEDULE 4.1(b) FORM OF TERMINATION AGREEMENT
SCHEDULE 4.1(m)(i) FORM OF LEGAL OPINION OF GENERAL COUNSEL OF THE
GUARANTOR
SCHEDULE 4.1(m)(ii) FORM OF LEGAL OPINION OF COUNSEL TO CCCL
SCHEDULE 4.1(n) ACKNOWLEDGEMENT FROM CCCL AND THE WHOLESALE CUSTODIAN
SCHEDULE 10.8(a) FORM OF COMMITMENT TRANSFER SUPPLEMENT
<PAGE>
THIS LONG-TERM RECEIVABLES PURCHASE AGREEMENT, dated May 23,
1994, among CHRYSLER CREDIT CANADA LTD., a Canadian corporation ("CCCL"),
in its capacity as seller of Retail Obligations under the Long-Term Retail
PSA referred to below (in such capacity, the "Retail Seller") and in its
capacity as seller of undivided ownership interests in Wholesale Pooled
Property (in such capacity, the "Initial Wholesale Seller"), the Additional
Wholesale Sellers from time to time parties to this Long-Term RPA, CHRYSLER
FINANCIAL CORPORATION, a Michigan corporation ("CFC"), ROYAL BANK OF
CANADA, a Canadian chartered bank ("Royal"), Chartered Banks from time to
time parties to this Long-Term RPA (collectively, the "Banks") and ROYAL as
agent for the Banks hereunder (in such capacity, the "Agent")
WITNESSES:
WHEREAS CCCL, CFC and Royal are parties to the Standby
Receivables Purchase Agreement dated January 27, 1993 (the "1993 RPA") and
the Related Agreements (as defined therein);
WHEREAS the parties hereto wish to replace the 1993 RPA in
part with this Long-Term RPA except as otherwise provided in this Long-Term
RPA;
NOW THEREFORE in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE I - DEFINITIONS
1.1 Defined Terms. The capitalized terms used herein which are
defined in, or by reference in, Schedule 1.1 hereto shall have the meanings
specified therein.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Long-Term RPA shall have their defined meanings when used in the
Related Documents or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Related Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms not defined in Schedule 1.1 and accounting terms partly defined in
Schedule 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Long-Term RPA shall refer to this Long-
Term RPA as a whole and not to any particular provision of this Long-Term
RPA, and references to Articles, Sections, subsections and Schedules are
references to articles, sections, subsections of and schedules to this
Long-Term RPA unless otherwise specified. All references to "this Long-
Term RPA" or "the Long-Term RPA" means this Long-Term RPA or "the Long-Term
RPA" as the same may be amended, supplemented or otherwise modified from
time to time.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The headings used in this Long-Term RPA are for convenience
of reference only and shall not affect the interpretation of this Long-Term
RPA.
ARTICLE II - AMOUNT AND TERMS OF COMMITMENTS
2.1 Replacement. Upon the Replacement Effective Date, the 1993
Commitments shall be terminated. If any 1993 Long-Term Carried-Over
Invested Amount is then outstanding and the 1993 Related Documents are not
terminated pursuant to the 1993 Termination Agreement, such 1993 Long-Term
Carried-Over Invested Amount shall remain outstanding under and pursuant to
the 1993 RPA and the 1993 Related Documents, provided that, as set forth in
the definitions of 1993 Long-Term Carried-Over Invested Amount and
Aggregate 1994 Invested Amount, such 1993 Long-Term Carried-Over Invested
Amount shall be credited to reduce the Banks' obligations to make Purchases
hereunder.
2.2 Commitment. Subject to the terms and conditions hereof,
during the Commitment Period each Bank severally agrees to purchase from
the Retail Seller, Retail Obligations (each such purchase, a "Retail
Purchase") and to purchase from the Wholesale Sellers undivided ownership
interests in Wholesale Pooled Property (each such purchase, a "Wholesale
Purchase") in amounts such that at any one time such Bank's Purchase
Percentage of the Long-Term Aggregate Invested Amount shall not exceed such
Bank's Commitment Amount.
2.3 Related Documents.
(a) Long-Term Retail PSA. Retail Purchases hereunder shall be
made pursuant to the terms and conditions of the Long-Term Retail PSA.
(b) Long-Term Wholesale Series Supplement. Wholesale Purchases
hereunder shall be made pursuant to the terms and conditions of the Long-
Term Wholesale Series Supplement, and each Bank's undivided ownership
interests in the Wholesale Pooled Property shall be evidenced by a Long-
Term Wholesale Certificate issued to such Bank pursuant to the Wholesale
PSA and the Long-Term Wholesale Series Supplement.
2.4 Procedure for Purchase.
(a) Seller Procedure. The Sellers may utilize the Commitments
during the Commitment Period on any Business Day, provided that:
(i) Notice. CCCL shall give the Agent irrevocable notice
in the form of, and containing the particulars set out
in, Schedule 2.4 hereto (which notice must be received
by the Agent prior to 10:00 a.m., Toronto time, at
least five Business Days prior to the requested
Purchase Date); and
(ii) Minimum Purchase Amount. On each Purchase Date, the
Purchases under the Commitments will be in an aggregate
amount equal to at least $5,000,000 in respect of a
Retail Purchase and $10,000,000 in respect of a
Wholesale Purchase.
(b) Agent/Bank Deposit Procedure. Upon receipt of any such
notice from CCCL, the Agent shall promptly notify each Bank thereof. Each
Bank shall deposit in the Clearing Account an amount in immediately
available funds equal to the amount of the Purchase Price or portion
thereof required to be paid by it in respect of such Purchase prior to
11:00 a.m., Toronto time, on the Purchase Date requested. The Agent shall
cause all such amounts to be withdrawn from the Clearing Account and shall
make the aggregate amount so withdrawn available to the Seller by
depositing the proceeds thereof in the account of the Seller with the
Agent.
2.5 Utilization Fee. CCCL agrees to pay to the Agent for the
account of each Bank an additional fee (the "Utilization Fee") in respect
of each month during which Utilization exceeds 33-1/3%, from and including
the Replacement Effective Date to but excluding the later of (i) the
Commitment Termination Date and (ii) the date on which the Long-Term
Aggregate Invested Amount is zero (such later date, the "Final Date"). The
Utilization Fee shall be payable monthly in arrears on (a) the first
Business Day of each calendar month (or portion thereof) and (b) on the
Final Date (for the period ended on such date for which no payment has been
received pursuant to clause (a) above) (each such month or period, a
"Utilization Period"). The Utilization Fee for each Utilization Period
shall be equal to the product of (x) the average daily Long-Term Aggregate
Invested Amount during such Utilization Period, (y) an annual rate equal to
.125% and (z) a fraction the numerator of which is the actual number of
days elapsed in the Utilization Period and the denominator of which is 365
(or 366, in leap years).
2.6 Facility Fee. The Seller shall pay to the Agent for the
account of each Bank, a facility fee (the "Facility Fee") for each day from
and including the Replacement Effective Date to but excluding the Final
Date. Such Facility Fee shall be payable quarterly in arrears on (a) the
first Business Day of each of January, April, July and October (for the
three-month period (or portion thereof) ended on the last day of the
immediately preceding month) and (b) on the Final Date (for the period
ended on such date for which no payment has been received pursuant to
clause (a) above) (each such period, a "Fee Period"). The Facility Fee for
each Fee Period shall be an amount equal to the product of (x) the average
daily Long-Term Commitment Amount during such Fee Period, (y) an annual
rate equal to the Long-Term Facility Fee Percentage, and (z) a fraction the
numerator of which is the actual number of days elapsed in the Fee Period
and the denominator of which is 365 (or 366, in leap years).
2.7 Default Interest. Facility Fees, Utilization Fees or other
fees that are not paid when due shall bear interest, payable on demand,
from the date when due until paid in full (both before and after judgment)
at the Default Rate.
2.8 Termination or Reduction of Commitments. The Sellers may
terminate the Commitments or, from time to time, reduce the Long-Term
Commitment Amount, provided that:
(a) Notice. CCCL shall give the Agent irrevocable notice in the
form of and containing the particulars set out in Schedule 2.8 (which
notice must be received by the Agent at least five Business Days prior to
such cancellation or reduction);
(b) Fees. On the date of any such cancellation CCCL shall pay
in full any accrued and unpaid Facility Fees, Utilization Fees or other
amounts owing to the Agent or the Banks hereunder; and
(c) Minimum Reduction. Any such reduction shall be in an amount
at least equal to $5,000,000 and be a whole multiple of $1,000,000 and
shall permanently reduce the Long-Term Commitment Amount then in effect.
2.9 Increase in Commitments.
From time to time the Seller may propose to the Agent in
writing that the Long-Term Commitment Amount be increased either by
increasing the Commitment of one or more Banks (each, an "Increasing Bank")
or by introducing one or more new Chartered Banks as a Bank hereunder
(each, a "New Bank"). Each proposed increase will be subject to receipt by
the Agent of the prior written consent of each Increasing Bank whose
Commitment is proposed to be increased and shall become effective upon
receipt by the Agent of duly executed supplements as provided in subsection
10.1 of this Long-Term RPA evidencing an aggregate increase in Commitment
Amounts equal to the aggregate amount of such increase in respect of the
Increasing Bank's Commitment or New Bank's Commitment, as applicable, and,
in the case of a New Bank, duly executed counterparts of this Long-Term RPA
and the Related Documents evidencing the addition of such New Bank as a
party thereto and a Long-Term Wholesale Certificate duly certified by the
Custodian and issued to such New Bank in accordance with the Wholesale PSA.
From and after the date on which any such proposed increase becomes
effective pursuant to the provisions of this subsection 2.9, the aggregate
dollar amount set forth in the definition of "Long-Term Commitment Amount"
in this Long-Term RPA shall be increased by the amount so proposed by the
Seller in respect of the Increasing Banks' or New Banks' Commitments. No
such increase shall diminish or otherwise affect the entitlement of any
Bank to any amounts payable hereunder or under the Related Documents in
respect of any Purchases made prior to the date such increase becomes
effective.
2.10 Rate of Return.
(a) Retail. The rate of return or yield due to the Banks on all
or any portion of their investment in Retail Obligations shall be as set
forth in the Long-Term Retail PSA.
(b) Wholesale. The rate of return or yield due to the Banks on
all or any portion of their investment in Wholesale Pooled Property shall
be as set forth in the Long-Term Wholesale Series Supplement.
2.11 Pro Rata Treatment and Payments.
(a) Pro Rata Treatment. Each Purchase hereunder, each payment
by CCCL on account of any Facility Fees and Utilization Fees hereunder and
any reduction of the Long-Term Commitment Amount shall be made according to
the respective Purchase Percentages of each of the Banks.
(b) Payments to Agent. All payments (including prepayments) by
any CCCL Party shall be made to the Agent for the account of the Banks or
the Agent, as applicable, by 2:00 p.m., Toronto time, at the office of the
Agent referred set out in the signature pages hereto in Dollars, in
immediately available funds and without set-off or counterclaim.
(c) Distribution of Payments by Agent. The Agent shall promptly
distribute such payments to each Bank entitled to receive a portion thereof
in accordance with the terms and conditions of this Long-Term RPA, the
Long-Term Retail PSA and the Long-Term Wholesale Series Supplement at the
respective office of each such Bank in Toronto set out opposite such Bank's
name on the signature pages hereto and in any event any payments received
by the Agent from the Seller by 2:00 p.m., Toronto time, on any day will be
distributed to each Bank by 4:00 p.m., Toronto time, on the same day.
2.12 Addition of Wholesale Sellers.
(a) Subject to the terms and conditions hereof, from time to
time a Designated Affiliate may become an additional Wholesale Seller (an
"Additional Wholesale Seller") provided that:
(i) the conditions precedent set forth in Section 7.04(b)
of the Wholesale PSA have been satisfied;
(ii) the Designated Affiliate executes a Supplement to this
Long-Term RPA and a Wholesale PSA Supplement to the
Wholesale PSA; and
(iii) the Designated Affiliate executes a Wholesale
Assignment and Assumption Agreement, in form and
substance satisfactory to the Agent.
(b) A Designated Affiliate shall become an Additional Wholesale
Seller effective on the date (the "Additional Seller Date") that the Agent
has received a certificate of a Responsible Officer of CCCL stating that
all conditions precedent to the addition of such Wholesale Seller as a
party have been satisfied. From and after the Additional Seller Date with
respect to each Additional Wholesale Seller, through but excluding the
Additional Seller Date with respect to any successive Additional Wholesale
Seller, all Wholesale Purchases shall be made from the Active Wholesale
Seller.
(c) CCCL hereby unconditionally and irrevocably covenants and
agrees that it will cause each Additional Wholesale Seller duly and
punctually to perform and observe all of the terms, conditions, covenants,
agreements and indemnities of each Additional Wholesale Seller under this
Long-Term RPA and the Related Documents strictly in accordance with the
terms hereof and thereof, and that if for any reason whatsoever, any such
Additional Wholesale Seller shall fail to so perform and observe such
terms, conditions, covenants, agreements and indemnities, CCCL will duly
and punctually perform and observe the same. The provisions of Sections
6.2, 6.3 and 6.4 of this Long-Term RPA shall apply mutatis mutandis to this
guarantee by CCCL.
ARTICLE III- REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Long-Term RPA and to
make the Purchases, each of CCCL and the Guarantor hereby represents and
warrants to the Agent and each Bank, in addition to and not in substitution
for, the representations and warranties contained in the Related Documents,
as follows:
3.1 Corporate Existence; Compliance with Law. Each CCCL Party is:
(a) duly incorporated and organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation and organization;
(b) has the corporate power and authority, and the legal right,
to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it
is currently engaged;
(c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of
its business requires such qualification, except where the
failure so to qualify could not, have a Material Adverse
Effect; and
(d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not have a
Material Adverse Effect.
3.2 Corporate Power; Authorization; Enforceable Obligations.
Each CCCL Party has the corporate power and authority, and the legal right,
to make, deliver and perform this Long-Term RPA and the Related Documents
and has taken all necessary corporate action to authorize the Purchases on
the terms and conditions of this Long-Term RPA and the Related Documents
and to authorize the execution, delivery and performance of this Long-Term
RPA and the Related Documents. No consent or authorization of, filing with
or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Purchases hereunder or with the
execution, delivery, performance, validity or enforceability of this Long-
Term RPA or the Related Documents, except such consents, authorizations or
filings as have been obtained or made. This Long-Term RPA has been, and
each Related Document will be, when executed and delivered, duly executed
and delivered on behalf of each CCCL Party party thereto. This Long-Term
RPA constitutes, and each Related Document when executed and delivered will
constitute, a legal, valid and binding obligation of each CCCL Party party
thereto, enforceable against such CCCL Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
3.3 No Conflict. The execution, delivery and performance of
this Long-Term RPA and the Related Documents, the Purchases hereunder and
the use of the proceeds thereof will not violate, conflict with, or result
in a breach of, the Constating Documents, any Requirement of Law or any
Contractual Obligation of any CCCL Party.
3.4 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of CCCL or the Guarantor, threatened by or against any
CCCL Party or against any of its properties or revenues:
(a) with respect to this Long-Term RPA or the Related Documents
or any of the transactions or arrangements contemplated
hereby or by the Related Documents (including without
limitation, with respect to the income, large corporations
or capital tax attributes or consequences of the
transactions or arrangements contemplated hereby or by the
Related Documents or the Retail Obligations or the Wholesale
Pooled Property or the filing positions taken by any CCCL
Party with respect thereto under any federal or provincial
income, large corporations or capital tax legislation), or
(b) which could have a Material Adverse Effect.
3.5 No Default. No Commitment Termination Event has occurred
and is continuing.
3.6 Voting Control. CCCL legally and beneficially owns all of
the issued and outstanding shares of each class of Voting Capital Stock of
each Designated Affiliate which is an Additional Wholesale Seller. The
Guarantor legally and beneficially owns all the issued and outstanding
shares of each class of Voting Capital Stock of CCCL.
ARTICLE IV - CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness of Long-Term RPA. This Long-
Term RPA shall become effective on the date (the "Replacement Effective
Date") which is the latest of May 23, 1994 and the dates on which the
conditions to the effectiveness of the Long-Term Retail PSA set forth
therein shall have been satisfied, on which the conditions to the
effectiveness of the Long-Term Wholesale Series Supplement and the issue of
the Long-Term Wholesale Certificates set forth in the Long-Term Wholesale
Series Supplement and the Wholesale PSA shall have been satisfied and on
which the Agent shall have received the following all in form and substance
satisfactory to the Agent:
(a) evidence satisfactory to the Agent that the Aggregate
Combined Commitment Amount shall be no less than
$250,000,000 on the Replacement Effective Date;
(b) the 1993 Termination Agreement, executed and delivered by a
Responsible Officer of each party to the 1993 RPA;
(c) this Long-Term RPA, executed and delivered by a duly
authorized officer of each CCCL Party party hereto and of
each of the Banks listed on the signature pages hereto;
(d) the Short-Term RPA, executed and delivered by a duly
authorized officer of each CCCL Party party thereto and of
each of the Banks listed on the signature pages thereto;
(e) (i) the Long-Term Retail PSA, executed and delivered by a
duly authorized officer of each CCCL Party party
thereto, and of each Bank listed on the signature pages
hereto, and
(ii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Long-Term Retail
PSA set forth therein have been satisfied;
(f) (i) the Short-Term Retail PSA, executed and delivered by a
duly authorized officer of each CCCL Party party
thereto, and of each Bank listed on the signature pages
thereto, and
(ii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Short-Term
Retail PSA set forth therein have been satisfied;
(g) (i) the Long-Term Wholesale Series Supplement, executed and
delivered by a duly authorized officer of the Wholesale
Custodian, each CCCL Party party thereto and each Bank
listed on the signature pages hereto,
(ii) the Long-Term Wholesale Certificates duly issued,
executed and authenticated by the Wholesale Custodian,
and
(iii) certificates of a Responsible Officer of CCCL that the
conditions to the effectiveness of the Long-Term
Wholesale Series Supplement and the issue of the Long-
Term Wholesale Certificates set forth in the Long-Term
Wholesale Series Supplement and in the Wholesale PSA
have been satisfied;
(h) (i) the Short-Term Wholesale Series Supplement, executed
and delivered by a duly authorized officer of the
Wholesale Custodian, each CCCL Party party thereto and
each Bank listed on the signature pages thereto,
(ii) the Short-Term Wholesale Certificates duly issued,
executed and authenticated by the Wholesale Custodian,
and
(iii) a certificate of a Responsible Officer of CCCL that the
conditions to the effectiveness of each Short-Term
Wholesale Series Supplement and the issue of the Short-
Term Wholesale Certificates set forth each Short-Term
Wholesale Series Supplement and in the Wholesale PSA
have been satisfied;
(i) a copy of the resolutions of the board of directors (or the
executive committee thereof) of each CCCL Party authorizing
the execution, delivery and performance of this Long-Term
RPA and the other Related Documents to which it is a party,
certified by the Secretary or an Assistant Secretary of such
CCCL Party;
(j) true and complete copies of the Constating Documents of each
CCCL Party, certified as complete and correct copies thereof
by the Secretary or an Assistant Secretary of such CCCL
Party;
(k) a certificate of a Responsible Officer of each CCCL Party
that the consummation of the transactions contemplated
hereby will not contravene, violate or conflict with, as to
any CCCL Party, the Constating Documents, any Requirement of
Law or any Contractual Obligation of such Person;
(l) a certificate of a Responsible Officer of each CCCL Party,
(i) attaching copies of all consents, authorizations and
filings referred to in Section 3.2, and
(ii) stating that such consents, authorizations and filings
are in full force and effect;
(m) the favourable written opinion of the general counsel of the
Guarantor, substantially in the form of Schedule 4.1(m)(i)
and the favourable written opinion of counsel to CCCL
substantially in the form of Schedule 4.1(m)(ii); and
(n) an acknowledgement from CCCL and the Wholesale Custodian to
the effect that the Wholesale Custodian has no beneficial
interest in the Wholesale Pooled Property, substantially in
the form of Schedule 4.1(n).
4.2 Notice of Replacement Effective Date. Upon satisfaction of
the conditions set forth in Section 4.1, the Agent shall deliver to each
CCCL Party and Bank a notice stating that such conditions have been
satisfied and setting forth the Replacement Effective Date and the 1993
Long-Term Carried-Over Invested Amount, if any (including a specification
of the "Wholesale Amount Outstanding" and the "Retail Amount Outstanding",
if any, (each as defined in the 1993 RPA)).
4.3 Failure to Reach Replacement Effective Date. If all the
conditions set forth in Section 4.1 have not been satisfied on or prior to
June 30, 1994, this Long-Term RPA shall be of no further force and effect
unless each of the Banks listed on the signature pages hereto on or prior
to such date shall have consented, in writing, to an extension of such
date.
4.4 Conditions to Each Purchase. The obligation of each Bank to
make any Purchase requested to be made by it on any Purchase Date
(including, without limitation, its initial Purchase) is subject to the
satisfaction of all the conditions precedent set forth in the Long-Term
Retail PSA with respect to Retail Purchases, all the conditions precedent
set forth in the Long-Term Wholesale Series Supplement with respect to
Wholesale Purchases, and the following conditions with respect to all
Purchases (including, in each case, receipt by the Agent from the Banks of
all amounts required to be paid to the Agent in respect of the Purchases):
(a) no Commitment Termination Event, nor any event which, with
the giving of notice, the lapse of time, or both, or the
satisfaction of any other condition, would be a Commitment
Termination Event, shall have occurred and be continuing;
(b) no Credit Event of Default nor any event which, with the
giving of notice, the lapse of time, or both, or the
satisfaction of any other condition, would be a Credit Event
of Default, shall have occurred and be continuing;
(c) the representations and warranties set forth in Article III
and in the Related Documents shall be true and correct in
all material respects on and as of such Purchase Date;
(d) no CCCL Party shall be in default in the payment of any
amount hereunder or in the observance or performance of any
covenant or other agreement contained in this Long-Term RPA,
the Related Documents or the Revolving Credit Agreement;
(e) neither CCCL nor the Guarantor shall be in default (i) in
the payment of interest on any Indebtedness of, or assumed
by, such Person, in excess of $5,000,000 principal in the
case of CCCL or U.S. $20,000,000 principal in the case of
the Guarantor, which default shall have continued for a
period of 5 days, or (ii) in payment of the principal of any
such Indebtedness when due;
(f) no default shall have occurred and be continuing with
respect to, or under any instrument securing or providing
for the issuance of, Indebtedness of, or assumed by, CCCL or
the Guarantor which default shall have continued unremedied
for a period to permit acceleration of the maturity of such
Indebtedness;
(g) receipt by the Agent on such Purchase Date of the following
all in form and substance satisfactory to the Agent:
(i) a certificate of a Responsible Officer of CCCL stating
that the conditions set forth in this Section 4.4 have
been satisfied;
(ii) the favourable written opinion of counsel for the
applicable Seller, dated the relevant Purchase Date,
substantially in the form of Exhibit D to the Long-Term
Retail PSA and Exhibit E to the Long-Term Wholesale
Series Supplement, as applicable, and covering such
other legal matters as the Banks or their counsel may
reasonably request;
(iii) a certificate executed by a Responsible Officer of the
Seller, dated the relevant Purchase Date, to the effect
that all instruments required by applicable legislation
to be registered or filed in order to protect, perfect
and preserve the rights of the Banks in all the Retail
Obligations which are being sold by the Seller to the
Banks on such Purchase Date and the Purchased Property
have been or will be, within the time prescribed by the
applicable legislation, duly executed by the required
parties thereto and registered and filed in each
appropriate office in each applicable jurisdiction
(which certificate shall also have annexed thereto a
schedule setting forth each such instrument and each
such office in which such registrations or filings have
been or will be made and such certificate shall also
state that such instruments are the only instruments
required and such offices are the only offices in which
registration or filing is required by applicable
legislation in order to protect, perfect and preserve
the interest of the Banks in such Retail Obligations
and the Purchased Property against all creditors of and
purchasers from the Seller);
(h) all legal matters incident to the execution and delivery of
this Long-Term RPA and to the Retail Purchases and Wholesale
Purchases shall be satisfactory to counsel for the Banks;
(i) the Period Losses as determined as of the Distribution Date
next preceding the Distribution Date next preceding such
Purchase Date, for the 12 month period immediately preceding
the date of determination shall not have exceeded 2% of the
average unpaid balance of the Total Portfolio during the 12
month period immediately preceding such date of
determination; and
(j) there shall have occurred no change in CCCL's retail credit
quality system that would result in a material adverse
change in the quality of the Retail Obligations and no
change in CCCL's dealer grading and credit policies or
CCCL's policies relating to demonstration vehicles that
would result in a material adverse change in the quality of
the Wholesale Obligations.
ARTICLE V - COVENANTS
In addition to and not in substitution for the covenants
contained in the Related Documents, CCCL and the Guarantor hereby agree
that, so long as the Commitments remain in effect, there is any Long-Term
Aggregate Invested Amount outstanding, any Long-Term Wholesale Certificate
remains outstanding or any amount is owing to any Bank or the Agent
hereunder or under any of the Related Documents, CCCL and the Guarantor
shall and shall cause each of the other CCCL Parties to comply with the
following, as applicable:
5.1 Notices. CCCL shall promptly give notice to the Agent of
the occurrence of any Commitment Termination Event, any Wholesale Early
Amortization Event, any "Early Amortization Event" under, and as defined
in, any series supplement issued pursuant to the Wholesale PSA (other than
the Long-Term Wholesale Series Supplement) and any event which, with the
giving of notice, the lapse of time, or both, or the satisfaction of any
other condition would be a Commitment Termination Event, Credit Event of
Default, Wholesale Early Amortization Event, or Early Amortization Event.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of CCCL and the applicable CCCL Party setting forth
details of the occurrence referred to therein and stating what action, if
any, CCCL or the applicable CCCL Party proposes to take with respect
thereto.
5.2 Voting Control. CCCL shall maintain legal and beneficial
ownership of all the issued and outstanding shares of each class of Voting
Capital Stock of each Designated Affiliate which becomes an Additional
Wholesale Seller. The Guarantor shall maintain legal and beneficial
ownership of all of the issued and outstanding shares of each class of
Voting Capital Stock of CCCL.
5.3 (a) Activities of the Seller. No Additional Wholesale Seller
will engage in any business or activity of any kind or enter into any
transaction other than
(i) the business, activities and transactions contemplated
and authorized by this Long-Term RPA or the Related
Documents, or
(ii) the business of acquiring, selling or financing
wholesale and retail receivables and related activities
and transactions
(such business, activities and transactions, collectively, "Permitted
Transactions").
(b) Indebtedness. No Additional Wholesale Seller will create,
incur or assume any Indebtedness or issue any securities or sell or
transfer any receivables to any Person which issues securities in respect
of any such receivables other than the Custodian under the Wholesale PSA,
unless
(i) such Indebtedness or securities have no recourse to any
assets of the Additional Wholesale Seller other than
the specified assets to which such Indebtedness or
securities relate, and
(ii) the Rating Agency Condition shall have been satisfied
in connection therewith prior to the incurrence or
issuance thereof.
(c) Guarantees. No Additional Wholesale Seller will become or
remain liable, directly or contingently, in connection with any
indebtedness or other liability of any other Person, whether by guarantee,
endorsement (other than endorsements of negotiable instruments for deposit
or collection in the ordinary course of business), agreement to purchase or
purchase, agreement to supply or advance funds, or otherwise, except in
connection with Permitted Transactions and unless the Rating Agency
Condition shall have been satisfied with respect thereto.
(d) Investments. No Additional Wholesale Seller will make or
suffer to exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of Indebtedness, acquisition
of the business or assets, or otherwise) in, any Affiliate, unless prior
thereto the Rating Agency Condition shall have been satisfied with respect
thereto.
(e) Agreements. No Additional Wholesale Seller will become a
party to, or permit any of its properties to be bound by, any indenture,
mortgage, instrument, contract, agreement, lease or other undertaking,
except this Long-Term RPA, the Related Documents and any document related
to a Permitted Transaction, or amend or modify its Constating Documents or
cancel, terminate, amend, supplement, modify or waive any of the provisions
of any Related Documents or request, consent or agree to or suffer to exist
or permit any such cancellation, termination, amendment, supplement,
modification or waiver unless, in any such case, the Rating Agency
Condition shall have been satisfied with respect thereto.
(f) Maintenance of Separate Existence. Each Additional
Wholesale Seller shall do all things necessary to maintain its corporate
existence separate and apart from CCCL, the Guarantor and other Affiliates
of the Additional Wholesale Seller, including, without limitation,
(i) practicing and adhering to corporate formalities, such
as maintaining appropriate corporate books and records;
(ii) maintaining all of its deposit and other bank accounts
and all of its assets separate from those of any other
Person;
(iii) maintaining all of its financial records separate and
apart from those of any other Person;
(iv) accounting for and managing all of its liabilities
separately from those of any of its Affiliates;
(v) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or
other insolvency proceeding involving the Additional
Wholesale Seller, CCCL, the Guarantor, or any other
Affiliate of the Additional Wholesale Seller, to
substantively consolidate the Additional Wholesale
Seller with CCCL, the Guarantor or any other Affiliate
of the Additional Wholesale Seller;
(vi) conducting transactions with its Affiliates only on an
arm's length basis; and
(vii) conducting all of its business (whether written or
oral) solely in its own name.
5.4 Accounting. No CCCL Party will prepare any financial
statements which shall account for nor will they in any other respect
account for the transactions contemplated hereby in a manner which is
inconsistent with the Banks' ownership of the Retail Obligations or the
Banks' undivided ownership interests in the Wholesale Pooled Property.
5.5 Collateral Protection Insurance. The Seller will, in
accordance with CCCL's customary practices and procedures, ensure that the
obligors under the Retail Obligations and the Wholesale Obligations
maintain collateral protection insurance.
ARTICLE VI - GUARANTEE
6.1 Guarantee. The Guarantor hereby unconditionally and
irrevocably covenants and agrees that it will cause CCCL, each Seller and
the Servicer duly and punctually to perform and observe all of the terms,
conditions, covenants, agreements and indemnities of CCCL, each Seller and
the Servicer under this Long-Term RPA and the Related Documents strictly in
accordance with the terms hereof and thereof, and that if for any reason
whatsoever any such Person shall fail to so perform and observe such terms,
conditions, covenants, agreements and indemnities, the Guarantor will duly
and punctually perform and observe the same.
6.2 Absolute and Unconditional Obligations. The liabilities and
obligations of the Guarantor under this Guarantee shall be absolute and
unconditional under all circumstances and shall be performed by the
Guarantor regardless of:
(a) whether the Banks shall have taken any steps to collect from
CCCL, each Seller and the Servicer any of the amounts
payable by such Person to the Banks under this Long-Term RPA
or the Related Documents or shall have otherwise exercised
any of their rights or remedies under this Long-Term RPA
against such Person or against any obligor under any of the
Retail Obligations or the Wholesale Obligations;
(b) the validity, legality or enforceability of this Long-Term
RPA or of any of the Related Documents, or the disaffirmance
of any thereof in any insolvency, bankruptcy or
reorganization proceedings relating to any such Person;
(c) any law, regulation or decree now or hereafter in effect
which might in any manner affect any of the terms or
provisions of this Long-Term RPA or any Related Document or
any of the rights of the Banks as against any such Person or
which might cause or permit to be invoked any alteration in
the time, amount, manner of payment or performance of this
Long-Term RPA or any Related Document;
(d) the merger or consolidation or amalgamation of any such
Person into or with any corporation or any sale or transfer
by such Person of all or any part of its property; and
(e) any other circumstances whatsoever (with or without a notice
to or knowledge of the Guarantor) which may or might in any
manner or to any extent vary the risk of the Guarantor, or
might otherwise constitute a legal or equitable discharge of
a surety or guarantor; it being the purpose and intent of
the Guarantor that the liabilities and obligations of the
Guarantor under this Guarantee shall be absolute and
unconditional under any and all circumstances, and shall not
be discharged except by payment and performance as provided
in this Long-Term RPA.
6.3 Discretion of Banks. Without in any way affecting or
impairing the liabilities and obligations of the Guarantor under this
Guarantee, the Banks may at any time and from time to time in their
discretion, without the consent of, or notice to the Guarantor:
(a) extend or change the time, manner, place or terms of payment
of any or all of the amounts payable by CCCL, each Seller
and the Servicer to the Banks under this Long-Term RPA or
the Related Documents or amend, supplement, waive, extend or
otherwise modify any of the terms of this Long-Term RPA or
the Related Documents; and
(b) settle or compromise any of the amounts payable by CCCL,
each Seller and the Servicer to the Banks under this Long-
Term RPA or the Related Documents or subordinate the same to
the claims of others.
6.4 General. The provisions of this Guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time payment
of any of the amounts payable by CCCL, each Seller and the Servicer to the
Banks under this Long-Term RPA or the Related Documents is rescinded or
must otherwise be restored or returned by the Banks upon the insolvency,
bankruptcy or reorganization of any such Person, or otherwise, all as
though such payment had not been made. The Guarantor hereby waives:
(a) notice of the occurrence of any default hereunder;
(b) any requirement of diligence or promptness on the part of
the Banks in making demand, commencing suit or exercising
any other right or remedy under this Long-Term RPA or the
Related Documents, or otherwise; and
(c) any right to require the Banks to exercise any right or
remedy against any such Person prior to enforcing any of its
rights against the Guarantor under this Guarantee.
ARTICLE VII - COMMITMENT TERMINATION EVENTS
7.1 Commitment Termination Events: If any of the following
events shall occur and be continuing:
(a) any Wholesale Early Amortization Event described in Section
9.01 of the Wholesale PSA or in Section 7.1(c) of the Long-
Term Wholesale Series Supplement shall occur;
(b) if the Wholesale PSA is amended, modified or supplemented
without the prior written consent of the Required Banks
whether or not such consent is required by the terms of the
Wholesale PSA, provided that this clause 7.1(b) shall not
apply to any amendment, modification or supplement which is
permitted to be made under the terms of the Wholesale PSA
without the consent of any of the investors under any of the
series supplements to the Wholesale PSA;
(c) any Credit Event of Default shall occur;
(d) any CCCL Party shall fail to pay any amount payable
hereunder, within 5 Business Days after any such amount
becomes due in accordance with the terms hereof;
(e) any representation or warranty made by any CCCL Party herein
or in any other Related Document or which is contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with this Long-
Term RPA shall prove to have been incorrect in any material
respect on or as of the date made except a representation
and warranty contained in Section 2.04 of the Wholesale PSA
or in Section 5.1 of the Long-Term Retail PSA if the Seller
has repurchased the Wholesale Obligations or the Retail
Obligations, as applicable, in respect of which the
representations and warranties were made;
(f) any CCCL Party shall default in the observance or
performance of any covenant or other agreement contained in
this Long-Term RPA or any Related Document and such default
continues unremedied for a period of 30 days;
(g) the giving of any notice of an intention to commence or the
commencement of any voluntary or involuntary case or
proceeding under any bankruptcy, insolvency, incorporation
or other law now or hereafter in effect of any jurisdiction
for the:
(i) bankruptcy, liquidation, winding-up, dissolution or
suspension of general operations of,
(ii) composition, rescheduling, reorganization, arrangement
or readjustment of, or other relief from, or stay of
proceedings to enforce, some or all of the debts of,
(iii) appointment of a trustee, receiver, receiver and
manager, liquidator, administrator, custodian or other
official for, or for all or a material part of the
assets of, or
(iv) possession, foreclosure or retention, or sale or other
disposition of, or other proceedings to enforce
security over, all or a material part of the assets of,
any CCCL Party or the taking of any action by any CCCL Party
in furtherance of or indicating its consent to, approval of,
or acquiescence in, any of the foregoing;
(h) any CCCL Party shall be unable to or shall admit its
inability to, pay its debts as such debts become due, or is,
or is adjudged or declared to be, or shall admit to being,
bankrupt or insolvent;
(i) a writ, execution or attachment or similar process is issued
or levied against all or a material part of the property of
any CCCL Party in connection with any judgment against such
CCCL Party, in any amount which affects property of such
CCCL Party;
(j) any secured creditor, encumbrancer or lienor, or any
trustee, receiver, receiver and manager, agent, bailiff or
other similar official appointed by or acting for any
secured creditor, encumbrancer or lienor, takes possession
of, or forecloses or retains, or sells or otherwise disposes
of, all or a material part of the assets of any CCCL Party
or any such Person gives notice of its intention to do so;
or
(k) any CCCL Party suspends or ceases, or takes any corporate
action to suspend or cease, its business;
then, and in any such event, (A) if such event is an event specified in
Section 7.1(g), 7.1(h), 7.1(i), 7.1(j) or 7.1(k), the Commitments shall
immediately terminate without notice of any kind, which is hereby waived by
the CCCL Parties and (B) if such event is any other event specified in this
Article, so long as such event shall be continuing, the Agent may, with the
consent of the Required Banks, or the Agent shall, upon the request of the
Required Banks, declare by notice to CCCL that the Commitments are
terminated forthwith, whereupon the Commitments shall immediately
terminate.
ARTICLE VIII - THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Royal as the agent of such Bank under this Long-Term RPA and the
Related Documents and each such Bank irrevocably authorizes Royal, as the
agent for such Bank to take such action on its behalf under the provisions
of this Long-Term RPA and the Related Documents and to exercise such powers
and perform such duties as are expressly delegated to the Agent by the
terms of this Long-Term RPA and the Related Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary in this Long-Term RPA, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Long-Term RPA or any Related Document or otherwise exist
against the Agent.
8.2 Delegation of Duties. The Agent may perform any of its
duties under this Long-Term RPA and the Related Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-
fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates
(except the Custodian in its capacity as such) shall be:
(a) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with this Long-
Term RPA or any Related Document (except for its or such
Person's own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by
any CCCL Party or any officer thereof contained in this
Long-Term RPA or any Related Document or in any certificate,
report, statement or other document referred to or provided
for in, or received by the Agent under or in connection
with, this Long-Term RPA or any Related Document or for the
value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Long-Term RPA or any Related Document
or for any failure of any CCCL Party to perform its
obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Long-Term RPA or any
Related Document, or to inspect the properties, books or records of any
CCCL Party.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any
CCCL Party), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Long-Term RPA or any Related Document unless it shall
first receive such advice or concurrence of the Required Banks as it deems
appropriate and be indemnified to its satisfaction by the Banks against any
and all Liabilities and Costs which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Long-Term RPA and the Related Documents in accordance with a request of the
Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks.
8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Commitment Termination Event
hereunder unless the Agent has received notice from a Bank or a CCCL Party
referring to this Long-Term RPA, describing such Commitment Termination
Event and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give notice thereof
to the Banks. The Agent shall take such action with respect to such
Commitment Termination Event as shall be reasonably directed by the
Required Banks; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Commitment Termination Event, as it shall deem advisable in the best
interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates (except the Custodian in
its capacity as such) has made any representations or warranties to it and
that no act by the Agent hereinafter taken, including any review of the
affairs of the CCCL Parties, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents
to the Agent that it has, independently and without reliance upon the
Agent, or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the CCCL Parties, the Retail Obligations and the
Wholesale Obligations and made its own decision to make its Purchases
hereunder and enter into this Long-Term RPA and the other Related Documents
to which it is a party. Each Bank also represents that it will,
independently and without reliance upon the Agent, or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Long-Term RPA and the Related
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the CCCL Parties, the Retail Obligations
and the Wholesale Obligations. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, financial or other condition, prospects or
creditworthiness of the CCCL Parties, the Retail Obligations or the
Wholesale Obligations which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification of Agent. The Banks agree to indemnify the
Agent in its capacity as such (to the extent not promptly reimbursed by the
CCCL Parties and without limiting the obligation of the CCCL Parties to do
so), ratably according to their respective Purchase Percentages, from and
against any and all Liabilities and Costs which may at any time (including,
without limitation, at any time following the termination of this Long-Term
RPA and the Related Documents) be imposed on, incurred by or asserted
against the Agent, in any way relating to or arising out of this Long-Term
RPA, any of the Related Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection
with any of the foregoing including without limitation all Liabilities and
Costs imposed on, incurred by, or asserted against the Agent:
(a) in exercising any of the rights and powers which the Agent
may have under or in respect of this Long-Term RPA or any
Related Document or any Retail Obligation or Wholesale
Obligation or any related document or instrument, or in
taking any actions or proceedings to enforce any of the
obligations or liabilities of any CCCL Party under or in
respect of this Long-Term RPA or any Related Document or of
the obligor or any other Person under or in respect of any
Retail Obligation or Wholesale Obligation or any related
document or instrument, or in taking any actions or
proceedings to realize upon or enforce the security or any
of the other rights constituted by any Retail Obligation or
Wholesale Obligation or any related document or instrument;
or
(b) resulting or arising from any claims, demands, suits,
actions or other proceedings brought by or on behalf of any
of the obligors or other parties under or in respect of any
of the Retail Obligations or Wholesale Obligations or the
vehicles financed thereby;
provided that no Bank (other than Royal) shall be liable for the payment of
any portion of such Liabilities and Costs, resulting solely from the
Agent's gross negligence or willful misconduct.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the CCCL Parties as though the Agent were not the
Agent hereunder and under the Related Documents. With respect to any
Interests the Agent in its individual capacity as a Bank may from time to
time hold, the Agent shall have the same rights and powers under this Long-
Term RPA and the Related Documents as any Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent under this
Long-Term RPA and the Related Documents, then the Required Banks shall
appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by CCCL, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and
the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent
or any of the parties to this Long-Term RPA. After any retiring Agent's
resignation as Agent, the provisions of this Article shall enure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Long-Term RPA and the Related Documents.
8.10 Exchange of Information. The CCCL Parties agree that each
of the Banks and the Agent may provide to any of the others of them such
information concerning the business, operations, property, financial and
other condition and creditworthiness of the CCCL Parties, Retail
Obligations or the Wholesale Obligations, as, in the opinion of such Bank
or the Agent, is relevant under or in connection with this Long-Term RPA
and the Related Documents.
8.11 Netting of Payment. Notwithstanding anything to the
contrary contained in this Long-Term RPA, the Agent may net against any
amount which is payable by the Agent to any Bank pursuant to this Long-Term
RPA, any amount which is payable by such Bank to the Agent pursuant to this
Long-Term RPA.
8.12 Survival. The agreements in this Article VIII shall survive
termination of this Long-Term RPA and the Related Documents.
8.13 For Benefit of Banks Only. The provisions of this Article
relating to the rights and obligations of the Agent and the Banks inter se
shall be operative as between the Agent and the Banks only, and no CCCL
Party shall have any rights hereunder or be entitled to rely for any
purposes upon such provisions.
ARTICLE IX - INDEMNIFICATION
9.1 Payment of Expenses and Taxes. CCCL agrees, on demand:
(a) to pay or reimburse the Agent for its reasonable out-of-
pocket costs and expenses incurred in connection with the
negotiation, preparation, execution and delivery of, and any
amendment, supplement or modification to, this Long-Term RPA
and the Related Documents and any other documents prepared
in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby
and thereby, (including, without limitation, the reasonable
fees and disbursements of one counsel to the Agent and to
the several Banks);
(b) to pay or reimburse the Agent for all reasonable fees and
disbursements of counsel to the Agent in connection with the
ongoing administration of this Long-Term RPA and the Related
Documents;
(c) to pay or reimburse the Agent and each Bank for all their
costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Long-
Term RPA, the Related Documents and any such other documents
(including, without limitation, fees and disbursements of
one counsel to the Agent and to the several Banks),
(d) to pay, indemnify, and hold each Bank and the Agent harmless
from, any and all recording and filing fees and any and all
Liabilities and Costs with respect to any licence fees,
duties and taxes (including without limitation any goods and
services, sales, use, stamp, excise, gross receipts or
personal property taxes), and other assessments which may at
any time be payable, if any, or determined to be payable or
asserted in connection with the execution and delivery of,
or consummation or administration of any of the transactions
or arrangements contemplated by, or any amendment,
supplement or modification of, or any waiver or consent
under or in respect of, this Long-Term RPA, the Related
Documents and any such other documents or the Retail
Obligations or the Wholesale Pooled Property,
(e) to pay, indemnify and hold each Bank and the Agent harmless
from and against all Liabilities and Costs arising from the
Retail Contracts and the Wholesale Contracts or the
underlying collateral (including any product warranty
related claims, but excluding credit losses),
(f) to pay, indemnify and hold each Bank and the Agent harmless
from and against all Liabilities and Costs arising from the
inaccuracy or breach of any of the representations and
warranties contained in this Long-Term RPA or the Related
Documents or the failure of any CCCL Party to perform or
observe any covenants, agreements or other terms or
provisions contained in this Long-Term RPA and the Related
Documents, and
(g) to indemnify the Agent and each Bank from and against
Liabilities and Costs (other than legal fees and
disbursements) of any kind whatsoever (and, with respect to
any proceeding or related proceedings, the reasonable fees
and disbursements of one firm of counsel to the relevant
Banks in connection with such proceeding(s)) which may at
any time (including, without limitation, at any time
following repayment of the Long-Term Aggregate Invested
Amount) be imposed on, incurred by or asserted against such
Bank in any way relating to or arising out of this Long-Term
RPA, the Guarantee, the Related Documents or any other
documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any
action taken or omitted by such Bank under or in connection
with any of the foregoing,
(all the foregoing, collectively, the "Indemnified
Liabilities"),
provided, that CCCL shall have no obligation hereunder to
the Agent or any Bank with respect to Indemnified Liabilities arising from
(i) the gross negligence or willful misconduct of the Agent, its Affiliates
or any such Bank, (ii) legal proceedings commenced against the Agent, its
Affiliates or any such Bank by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, or (iii) legal proceedings
commenced against the Agent, its Affiliates or any such Bank by any other
Bank or by any Transferee and further provided, that the Indemnified
Liabilities referred to in (d) shall not include, with respect to any Bank,
any taxes imposed on the net income of such Bank except to the extent that
(i) such taxes are payable by such Bank as a consequence of (A) the
Investor Master Custodial Certificate held by such Bank not being
characterized as evidencing an undivided ownership interest in the
Wholesale Pooled Property or (B) the Custodial Arrangement (as defined in
the Wholesale PSA) not being characterized solely as an agency and (ii) as
a result of such characterization the amount of taxes payable by such Bank
exceeds the amount of taxes that would have been payable had (C) the
Investor Master Custodial Certificates been characterized as evidencing an
undivided ownership interest in the Wholesale Pooled Property or the
Custodial Arrangement and (D) the Custodial Arrangement been characterized
solely as an agency.
9.2 Statements, Reports etc. All statements, reports,
certificates, opinions and other documents or information required to be
furnished to the Banks or the Agent by the Seller under this Long-Term RPA
shall be supplied by the Seller, without cost to the Banks or the Agent.
9.3 Increased Costs. In the event that any Applicable Law or
any change therein or in the interpretation or application thereof or
compliance by any Bank with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
enacted or made subsequent to the date hereof:
(a) does or shall subject such Bank to any Tax, or change
the basis of taxation or increase any existing Tax, on
payments of any amounts payable by the Seller to such
Bank (except for taxes on the overall net income of
such Bank imposed by the jurisdiction in which it is
incorporated or resident or from which it is acting for
the purposes of this Long-Term RPA, but including taxes
on capital or other similar taxes);
(b) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank; or
(c) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank
of purchasing or holding any such Bank's Interests hereunder or to reduce
any amount receivable in respect thereof (such increase in costs or
reduction in amounts receivable, "Increased Costs") then, in any such case,
the Seller shall promptly pay to the Agent for the account of such Bank,
upon the written demand of such Bank to the Seller (with a copy to the
Agent), so long as such Increased Costs are not otherwise included in the
amounts required to be paid to such Bank pursuant to Section 9.4, 9.5 or
9.6, any additional amounts necessary to compensate such Bank for such
Increased Costs which such Bank deems to be material as determined by such
Bank with respect to its Purchases. If a Bank becomes entitled to claim
any additional amounts pursuant to this Section, it shall promptly notify
the Seller, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by a Bank, through the Agent,
to the Seller shall be conclusive in the absence of manifest error.
9.4 Reemployment Costs. CCCL agrees to indemnify each Bank and
to hold each Bank harmless from any Liabilities and Costs, including, but
not limited to, any such Liabilities and Costs arising from interest or
fees payable by such Bank to lenders of funds obtained by it to purchase or
hold such Bank's Interests, which such Bank may sustain or incur as a
consequence of:
(a) default by the Seller in the performance of its obligations
hereunder; or
(b) default by the Seller in selling Interests on a Purchase
Date or in converting or continuing the annual rate of
return to or in, as applicable, a rate based on a Bank's BA
Rate, in each case after having given notice of a sale or
electing to have the Bank's BA Rate applied; or
(c) the application of any collections in reduction of such
Bank's investment in the Interests at any time such that any
portion of the Long-Term Aggregate Invested Amount in
respect of which the Seller elects to have the rate of
return based on a Bank's BA Rate for bankers' acceptances
maturing over a period of time ending on a Distribution Date
does not remain outstanding during the entire period for
which such Bank's BA Rate is to apply, or
(d) the Exact Retail Amount Due (as defined in the Long-Term
Retail PSA) upon Retail Obligations purchased by the Bank on
a Fixed Rate basis being different from the Estimated Retail
Amount Due (as defined in the Long-Term Retail PSA) upon
such Retail Obligations. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted
by a Bank to CCCL shall be conclusive absent manifest error.
9.5 Changes in Capital Requirements.
(a) In the event that, in the opinion of counsel for any Bank
(which may, in the discretion of such Bank, be such Bank's internal
counsel), compliance with any law, rule, regulation or guideline, or any
change therein or in the interpretation or application thereof, or
compliance by any Bank with any request or directive from any central bank
or Governmental Authority (whether or not such requirement has the force of
law) enacted or made subsequent to the date hereof shall affect the amount
of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and the amount of such capital that is
required or expected to be maintained is increased by or based upon the
Commitment of such Bank under this Long-Term RPA (such requirement, a
"Change in Capital Requirement"), such Bank shall so notify CCCL and the
Agent within one-hundred eighty (180) days after such Bank shall have
obtained actual knowledge of the costs associated with its compliance with
such Change in Capital Requirement (but in no event later than 365 days
after such Bank is first required to comply with such Change in Capital
Requirement).
(b) At the time of such notification such affected Bank shall
provide CCCL and the Agent with a written statement setting forth the
amount that would adequately compensate such affected Bank for the
Liabilities and Costs associated with its compliance with such Change in
Capital Requirement and setting forth in reasonable detail the assumptions
upon which such affected Bank calculated such amount and a copy of the
opinion of counsel for the Bank referred to in the preceding paragraph.
(c) Such affected Bank shall allocate to the Seller the
Liabilities and Costs associated with such Change in Capital Requirement in
such a way that the proportion of (i) such Liabilities and Costs that are
allocated to the Seller to (ii) the total of such Liabilities and Costs of
such affected Bank associated with such Change in Capital Requirement as it
relates to all commitments of such Bank to its customers of similar
creditworthiness as the Seller, is substantially the same as the proportion
of (i) the Commitment of such affected Bank under this Long-Term RPA to
(ii) the total of all commitments by such affected Bank to its customers of
similar creditworthiness as the Seller.
(d) CCCL and such affected Bank shall thereafter negotiate in
good faith an agreement to increase that portion of the Facility Fees
payable to such affected Bank under Section 2.6 of this Long-Term RPA,
which, in the opinion of such affected Bank, will adequately compensate
such affected Bank for such costs. If such increase is approved in writing
by CCCL within ninety (90) days from the date of the notice to CCCL from
such affected Bank, the Facility Fees payable by CCCL shall include the
amount of such agreed increase (but subject to subsection 9.5(e)), and CCCL
will so notify the Agent. If CCCL and such affected Bank are unable to
agree on such an increase within ninety (90) days from the date of the
notice to CCCL from such affected Bank, CCCL shall by written notice to
such affected Bank within one hundred and twenty (120) days from the date
of the aforesaid notice to CCCL from such affected Bank, elect either to
(i) terminate the Commitment of such affected Bank (each such Bank, a
"Terminated Bank") (subject to subsection 9.5(e)) or (ii) (subject to
subsection 9.5(e)) increase the Facility Fees payable to such affected Bank
by the amount requested by such affected Bank, and CCCL will so notify the
Agent. Without limiting the foregoing, if CCCL elects to take the action
described in clause (ii) of the preceding sentence, it may simultaneously
therewith reduce the Commitment of such affected Bank by an amount chosen
by CCCL. If CCCL fails to provide notice to such affected Bank as
described in the second preceding sentence by such one hundred twentieth
day, CCCL shall be deemed to have taken the action described in clause (ii)
of such second preceding sentence without reduction of the Commitment of
such affected Bank.
(e) CCCL (A) may from time to time after such one hundred
twentieth day reduce the compensation to be received pursuant to this
Section 9.5 by any affected Bank as a result of any Change in Capital
Requirement, to the average compensation (the "Average Compensation") CCCL
has agreed, as provided above, to pay the affected Banks as a result of
such Change in Capital Requirement (such average compensation to be
measured by a percentage of the aggregate Commitments of such affected
Banks) and (B) shall pay to each Terminated Bank an amount equal to the
excess, if any, of (i) the lesser of (I) the aggregate Facility Fees that
would have been payable to such Terminated Bank from the date of such
Terminated Bank's notice to CCCL pursuant to this Section 9.5 to the date
the Commitment of such Terminated Bank is terminated had such Facility Fees
been determined by reference to the Average Compensation, and (II) the
aggregate Facility Fees that would have been payable to such Terminated
Bank during such period had such Facility Fees been increased by an amount
necessary to adequately compensate such Terminated Bank (as determined by
such Terminated Bank in accordance with the applicable provisions of this
Section 9.5) for the costs attributable to the relevant Change in Capital
Requirement, over (ii) the aggregate Facility Fees actually paid to such
Terminated Bank during such period.
(f) On the day the Commitment of a Terminated Bank is terminated
pursuant to subsection 9.5(d), (i) the Seller shall pay in full any accrued
and unpaid Facility Fees, Utilization Fees or other amounts owing to such
Terminated Bank hereunder, and (ii) notwithstanding such termination, CCCL
and CFC shall continue to remain fully liable to such Terminated Bank for
the satisfaction of all obligations and the payment of all amounts due or
to become due under this Long-Term RPA and the relevant Related Documents
(except for Facility Fees and Utilization Fees) as if such Commitment had
not been terminated until all such obligations have been satisfied and all
such amounts paid in full; and (iii) CCCL shall pay to the Terminated Bank
on each date on which the Facility Fees would have been payable to such
Terminated Bank had such Commitment not been terminated an amount equal to
the increase in such Terminated Bank's portion of the Facility Fees which
such Terminated Bank requested pursuant to subsection 9.5(d), adjusted to
give effect to the termination of such Terminated Bank's Commitment, during
the remaining term of this Long-Term RPA so long as the Terminated Bank's
investment in Retail Obligations or Wholesale Pooled Property remains
greater than zero.
(g) Upon the occurrence of any Change in Capital Requirement,
any Bank whose commitment hereunder is affected by such Change in Capital
Requirement shall transfer its commitment to another branch office (or, if
such Bank so elects, to an Affiliate) of such Bank, provided that such
transfer shall be made only if such Bank shall have determined in good
faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that, (i) on the basis of existing
circumstances, such transfer will avoid the increased costs resulting from
such Change in Capital Requirement and will not result in any additional
Liabilities and Costs to such Bank or to CCCL (unless CCCL agrees to pay
such additional Liabilities and Costs of such Bank or CCCL, as the case may
be) and (ii) such transfer is otherwise consistent with the interests of
such Bank. A transfer of a Bank's Commitment pursuant to this subsection
9.5(g) shall be effected pursuant to the provisions of Section 10.8,
provided that no consent to such transfer shall be required from the Seller
or the Agent.
9.6 Replacement of Banks
The Seller shall be permitted to replace any Bank which (a)
requests reimbursement for amounts owing pursuant to Section 9.3 and as a
result thereof any of the actions described in such Section is required to
be taken, (b) defaults in its obligation to make Purchases hereunder, or
(c) ceases to be a party to the Revolving Credit Agreement, provided that
(i) such replacement does not conflict with any Applicable Law, (ii) no
Commitment Termination Event shall have occurred and be continuing at the
time of such replacement, (iii) the Seller shall be liable to such
replaced Bank under subsection 9.4(c) to the extent such replaced Bank
incurs any Liabilities or Costs contemplated in such subsection as a result
of such replacement, (iv) the replacement Bank, if not already a Bank, and
the terms and conditions of such replacement, shall be reasonably
satisfactory to the Agent, (v) the replaced Bank shall be obligated to make
such replacement in accordance with the provisions of Section 10.8, (vi)
until such time as such replacement shall be consummated, the Seller shall
pay all additional amounts (if any) required pursuant to Sections 9.3 or
9.5, as the case may be, and (vii) any such replacement shall not be deemed
to be a waiver of any rights which the Seller, the Agent or any other Bank
shall have against the replaced Bank.
9.7 Survival. The agreements in this Article shall survive the
termination of this Long-Term RPA and the Related Documents and are in
addition to, and not in substitution for, any other indemnification granted
by any CCCL Party in any Related Document.
ARTICLE X - MISCELLANEOUS
10.1 Amendments and Waivers.
(a) Neither this Long-Term RPA, any Related Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section.
(b) With the written consent of the Required Banks, the Agent
and CCCL may, from time to time, enter into written amendments, supplements
or modifications hereto and to the Related Documents for the purpose of
adding any provisions to this Long-Term RPA or the Related Documents or
changing in any manner the rights of the Banks or of the CCCL Parties
hereunder or thereunder or waiving, on such terms and conditions as the
Agent may specify in such instrument, any of the requirements of this Long-
Term RPA or the Related Documents;
provided, however, that no such waiver and no such amendment, supplement or
modification shall
(i) extend the Commitment Period,
(ii) change the Long-Term Commitment Amount,
(iii) change any Bank's Commitment Amount,
(iv) reduce any fee payable to any Bank hereunder,
(v) reduce the rate of return or extend the time for
payment of yield,
(vi) reduce the amount or extend the maturity of any Long-
Term Wholesale Certificate or any instalment thereof,
(vii) change the definition of "Commitment Termination Date"
or "Commitment Termination Event" or its consequences,
(viii) reduce the percentages set forth in "Required
Participation Percentage" or "Subordinated Percentage"
in the Long-Term Wholesale Series Supplement or reduce
the percentage specified in the definition of "Reserve
Fund Required Amount" in the Long-Term Wholesale Series
Supplement,
(ix) change the definition of "Applicable Yield" or
"Deferred Payment" in the Long-Term Retail PSA,
(x) amend, modify or waive any provision of this
subsection,
(xi) reduce the percentage specified in the definition of
Required Banks or waive any of the provisions of
Section 4.4,
(xii) amend, modify or waive any provision of the Guarantee, or
(xiii) amend the Long-Term Wholesale Series Supplement without
the satisfaction of the Rating Agency Condition if so
required by the Wholesale PSA,
in each case without the consent of each Bank.
(c) Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding
upon the CCCL Parties, the Banks and the Agent. In the case of any waiver,
the CCCL Parties, the Banks and the Agent shall be restored to their former
position and rights hereunder and under the Related Documents, and any
Commitment Termination Event waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other
Commitment Termination Event, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy or telex,
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, certified or registered
mail, or by courier, in the case of telecopy notice, when received, or, in
the case of telex notice, when sent, answerback received, addressed to the
parties as set forth in the signature pages hereto, or to such other
address as may be hereafter notified by the respective parties hereto
provided that any notice, request or demand to or upon the Agent or the
Banks pursuant to Section 2.4 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof.
Nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Long-Term RPA.
10.5 Successors and Assigns. This Long-Term RPA shall be binding
upon and enure to the benefit of the CCCL Parties, the Banks, the Agent,
and their respective successors and assigns, except that no CCCL Party may
assign or transfer any of its rights or obligations under this Long-Term
RPA without the prior written consent of the Required Banks (other than in
connection with an Additional Wholesale Seller pursuant to the terms
hereof).
10.6 Participation. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any
time sell to one or more Chartered Banks ("Participants") participating
interests in any Commitment of such Bank, any Long-Term Wholesale
Certificate or any other Interests of such Bank hereunder. In the event of
any such sale by a Bank of participating interests to a Participant, such
Bank's obligations under this Long-Term RPA to the other parties to this
Long-Term RPA shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof for all purposes under this Long-
Term RPA, and CCCL, the Seller and the Agent shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Long-Term RPA. In the case of a sale by a Bank of a
participating interest in Wholesale Pooled Property represented by a Long-
Term Wholesale Certificate, such Bank shall remain the registered holder of
such Long-Term Wholesale Certificate.
10.7 Optional Sale. The Agent may at any time during the
Commitment Period offer to sell all or any portion of the Banks' Interests
comprising Sold Retail Obligations (as defined in the Long-Term Retail PSA)
for cash (a) if the Long-Term Retail Aggregate Invested Amount (plus
accrued interest, fees and other amounts payable by the Seller hereunder to
the date of such sale) after giving effect to such sale, would be reduced
to zero and (b) if after giving effect to such sale no Service Default (as
defined in the Long-Term Retail PSA) shall be then continuing. Proceeds of
such sale shall be treated as and applied as a collection on account of
Sold Retail Obligations under and in accordance with the Long-Term Retail
PSA. Following the receipt of a bona fide offer to purchase all or any
portion of the Banks' Interests in the said Sold Retail Obligations from
any Person other than the Seller which the Agent wishes to accept (a "Third
Party Offer"), the Agent shall give notice thereof to the Seller, which
notice shall constitute an irrevocable offer to sell such Interests to the
Seller for an amount and on the terms and conditions specified in the Third
Party Offer. The Seller will be under no obligation to accept such offer.
If the Seller does not accept such offer within five (5) Business Days
after receiving notice thereof, the Agent may accept the Third Party Offer.
10.8 Sale of Interests.
(a) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
any Bank, and, with the consent of CCCL and the Agent (which in each case
shall not be unreasonably withheld) to one or more additional Chartered
Banks ("Purchasing Banks") all or a portion of its rights and obligations
under this Long-Term RPA, the Related Documents and the Long-Term Wholesale
Certificates pursuant to a Commitment Transfer Supplement, executed by such
Purchasing Bank, such transferor Bank, the Guarantor and the Agent (and, in
the case of a Purchasing Bank that is not then a Bank, by CCCL), and
delivered to the Agent for its acceptance and recording in the Register
provided that (i) prior to the termination of the Commitments (whether on
the Commitment Termination Date or otherwise), any such sale shall include
a proportionate share of each of such transferor Bank's Commitments, Retail
Obligations and interests in Wholesale Pooled Property, and after any
termination of the Commitments, any such sale may be of any combination of
Retail Obligations and interests in Wholesale Pooled Property and (ii) the
principal amount of such Bank's Commitment so sold (or, if no Commitments
are outstanding, the principal amount of interests in Wholesale Pooled
Property and Retail Obligations so sold) shall be in an aggregate amount of
$5,000,000 or more.
(b) Upon such execution, delivery, acceptance, and recording,
from and after the Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, (i) the Purchasing Bank thereunder shall be
a party hereto and the Related Documents and, to the extent provided in
such Commitment Transfer Supplement, have the rights and obligations of a
Bank hereunder with a Commitment as set forth therein, and (ii) the
transferor Bank thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Long-Term
RPA (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and obligations under
this Long-Term RPA and the Related Documents, such transferor Bank shall
cease to be a party hereto).
(c) Such Commitment Transfer Supplement shall be deemed to amend
this Long-Term RPA to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Bank and the resulting adjustment
of Purchase Percentages arising from the purchase by such Purchasing Bank
of all or a portion of the rights and obligations of such transferor Bank
under this Long-Term RPA and the Related Documents. On or prior to the
Transfer Effective Date determined pursuant to such Commitment Transfer
Supplement, the Wholesale Custodian, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Long-Term Wholesale
Certificate a new Long-Term Wholesale Certificate issued in the name of
such Purchasing Bank pursuant to the Long-Term Wholesale Series Supplement
and, if the transferor Bank has retained Commitments hereunder, a new Long-
Term Wholesale Certificate issued in the name of the transferor Bank.
(d) The Agent shall maintain at its address referred to on the
signature pages hereto or such other address of which the Agent may give
notice in accordance with Section 10.2, a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Banks and the Commitments of,
and principal amount of the Retail Obligations and interests in Wholesale
Pooled Property sold to, each Bank from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
CCCL Parties, the Agent and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Retail Obligations, the
interests in Wholesale Pooled Property and the Long-Term Wholesale
Certificates recorded therein for all purposes of this Long-Term RPA. The
Register shall be available for inspection by the CCCL Parties or any Bank
at any reasonable time and from time to time upon reasonable prior notice.
Within two (2) Business Days after the end of each month during the term of
this Long-Term RPA, the Agent shall provide a copy of the Register to the
Seller.
(e) Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and a Purchasing Bank (and, in the case of a
Purchasing Bank that is not then a Bank or an Affiliate thereof, by CCCL
and the Agent), the Agent shall (i) promptly accept such Commitment
Transfer Supplement and (ii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the Register
and give notice of such acceptance and recordation to the Banks and CCCL.
(f) Each CCCL Party authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning such CCCL Party and its Affiliates which has been delivered to
such Bank by or on behalf of such CCCL Party pursuant to this Long-Term RPA
or which has been delivered to such Bank by or on behalf of such CCCL Party
in connection with such Bank's credit evaluation of such CCCL Party and its
Affiliates prior to becoming a party to this Long-Term RPA.
10.9 Adjustments; Set-Off.
(a) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of its investments in Wholesale Pooled Property
or Retail Obligations, or any return or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off or counterclaim, pursuant to events or proceedings of the nature
referred to in Sections 7.1(g), 7.1(h), 7.1(i), 7.1(j) or 7.1(k) or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's
investments in Wholesale Pooled Property or Retail Obligations, or return
or interest thereon, such benefitted Bank shall purchase for cash from the
other Banks such portion of each such other Bank's investments in Wholesale
Pooled Property or Retail Obligations, or shall provide such other Banks
with the benefits of any such collateral, or the proceeds thereof, as shall
be necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. Each CCCL Party agrees that
each Bank so purchasing a portion of another Bank's investments in
Wholesale Pooled Property or Retail Obligations may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Banks provided
by law, each Bank shall have the right, without prior notice to any CCCL
Party, any such notice being expressly waived by each CCCL Party to the
extent permitted by applicable law, upon any amount becoming due and
payable by such CCCL Party hereunder or under the Related Documents
(whether at the stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Bank or any branch or agency thereof to
or for the credit or the account of such CCCL Party, provided, however,
that no Bank which maintains any bank account for the Wholesale Custodian
shall exercise any right of set-off or counterclaim or similar right with
respect to amounts on deposit in such bank account. Each Bank agrees
promptly to notify CCCL and the Agent after any such set-off and
application made by such Bank, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
10.10 Counterparts. This Long-Term RPA may be executed by one or more
of the parties to this Long-Term RPA in any number of separate
counterparts, and all of such counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this
Long-Term RPA signed by all the parties shall be lodged with CCCL and the
Agent.
10.11 Severability. Any provision of this Long-Term RPA which 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.
10.12 Entire Agreement. Except as otherwise provided herein with
respect to the 1993 RPA and the Short-Term RPA, this Long-Term RPA
represents the entire agreement of the CCCL Parties, the Agent and the
Banks with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank
relative to subject matter hereof not expressly set forth or referred to
herein or in the Related Documents.
10.13 Governing Law. This Long-Term RPA and the rights and obligations
of the parties under this Long-Term RPA shall be governed by, and construed
and interpreted in accordance with, the law of the Province of Ontario and
the federal laws of Canada applicable therein.
10.14 Submission To Jurisdiction; Waivers. Each CCCL Party hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Long-Term RPA and the Related
Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive jurisdiction of the courts of the Province of
Ontario;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Person at its
address set forth in the signature pages hereto or at such
other address of which the Agent shall have been notified
pursuant to Section 10.2;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special,
exemplary, punitive or consequential damages.
10.15 Further Assurances. Each CCCL Party agrees that it will from
time to time and at any time, do and perform any and all acts and execute
any and all further instruments required or reasonably requested by the
Agent to effect more fully the purposes and intent of this Long-Term RPA,
the Long-Term Wholesale Series Supplement, the Long-Term Retail PSA and the
Purchases contemplated hereunder or thereunder, including without
limitation, the execution of any financing statements, financing change
statements and all affidavits, notices or assignments for filing under the
provisions of the legislation of any jurisdiction.
10.16 Termination. This Long-Term RPA terminates on the later of the
termination of the Long-Term Retail PSA and the termination of the Long-
Term Wholesale Series Supplement.
IN WITNESS WHEREOF the parties hereto have caused this Long-
Term RPA to be duly executed as of the date and year first above written.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P, Corp.Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
<PAGE>
Branch of Account Commitment
(Millions)
$35 ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
$31.5 CANADIAN IMPERIAL BANK OF
COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir. Auto. Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
$31.5 THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-3770
Telex: 06-524712
$14 BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
$14 THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P,Corp.&Invst.Bnkg.Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
$10.5 BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
$10.5 CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259
Telecopier: 416-594-2266 Title: Vice President
Telex: 06-218241
$10.5 CREDIT LYONNAIS CANADA
One Financial Place
1 Adelaide Street East By: "David Farmer"
Suite 2505
Toronto, Ontario Title: Vice President
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
$10.5 MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
$7 SWISS BANK CORPORATION
(CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Asc. Dir. Mrch. Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Mrch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
Exhibit 10-N
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.
as Seller
- and -
ROYAL BANK OF CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
THE BANK OF NOVA SCOTIA
BANK OF MONTREAL
THE TORONTO-DOMINION BANK
BANK OF AMERICA CANADA
CHEMICAL BANK OF CANADA
CREDIT LYONNAIS CANADA
MORGAN BANK OF CANADA
SWISS BANK CORPORATION (CANADA)
as Banks
- and -
ROYAL BANK OF CANADA
as Agent
____________________________________________________________________________
LONG-TERM RETAIL PURCHASE AND SERVICING AGREEMENT
May 23, 1994
____________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . -2-
"Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
"Aggregate Amount Outstanding" . . . . . . . . . . . . . . . . . . . . . -2-
"Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
"Anticipated Collection Schedule". . . . . . . . . . . . . . . . . . . . -2-
"Applicable Adjustment Percentage" . . . . . . . . . . . . . . . . . . . -3-
"Applicable Anticipated Collection Schedule" . . . . . . . . . . . . . . -3-
"Applicable Yield" . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Application Account". . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Assignment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Available Commitment" . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's BA/CDOR Spread". . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's BA Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
"Bank's Reserve Adjustment". . . . . . . . . . . . . . . . . . . . . . . -3-
"Blended BA/CDOR Spread" . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Blended BA Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Blended Reserve Adjustment" . . . . . . . . . . . . . . . . . . . . . . -4-
"Bond Bid Yield" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Branch Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Calculation Period" . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"Cash Equivalents" . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
"CDOR Rate". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"CFC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Chartered Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Chrysler Canada". . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Commitment" and "Commitment Amount" . . . . . . . . . . . . . . . . . . -5-
"Commitment Period". . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Complete Servicing Transfer". . . . . . . . . . . . . . . . . . . . . . -5-
"Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Daily Remittance Notice". . . . . . . . . . . . . . . . . . . . . . . . -5-
"Date of Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
"Defaulted Retail Obligations" . . . . . . . . . . . . . . . . . . . . . -6-
"Deferred Percentage (Retail Gross)" . . . . . . . . . . . . . . . . . . -6-
"Deferred Percentage (Retail Net)" . . . . . . . . . . . . . . . . . . . -6-
"Discount Factor". . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Fixed Rate" . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Fixed Rate Purchase Proceeds" . . . . . . . . . . . . . . . . -6-
"Estimated Retail Amount Due". . . . . . . . . . . . . . . . . . . . . . -6-
"Estimated Weighted Average Life". . . . . . . . . . . . . . . . . . . . -6-
"Exact Retail Amount Due". . . . . . . . . . . . . . . . . . . . . . . . -6-
"Fixed Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
"Fixed Rate Determination Date". . . . . . . . . . . . . . . . . . . . . -6-
"Governmental Authority" . . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 Carried-Over Amount" . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"1993 RPA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Level V". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Long-Term Facility Fee Percentage". . . . . . . . . . . . . . . . . . . -7-
"Long-Term RPA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Long-Term Wholesale Aggregate Invested Amount". . . . . . . . . . . . . -7-
"Offered Spread" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Ownership Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
"Ownership Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Period Losses". . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Primary Retail Deferred Payment". . . . . . . . . . . . . . . . . . . . -8-
"Prime Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Purchase Percentage". . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Replacement Effective Date" . . . . . . . . . . . . . . . . . . . . . . -8-
"Required Banks" . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Required Retail Deferred Payment Level" . . . . . . . . . . . . . . . . -8-
"Responsible Officer". . . . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Amount Outstanding". . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Deferred Payment". . . . . . . . . . . . . . . . . . . . . . . . -8-
"Retail Deferred Payment Excess" . . . . . . . . . . . . . . . . . . . . -8-
"Retail Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Retail Paid Percentage" . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Retail Purchase". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Revolving Credit Agreement" . . . . . . . . . . . . . . . . . . . . . . -9-
"Service Default". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Settlement Date". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Settlement Period". . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Software" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Sold Retail Obligations". . . . . . . . . . . . . . . . . . . . . . . . -9-
"Total Portfolio". . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Weighted Average Life". . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Net Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
"Selling Discount" . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
"Wholesale Contracts". . . . . . . . . . . . . . . . . . . . . . . . . .-10-
"Wholesale PSA". . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . .-10-
(a) Certain References . . . . . . . . . . . . . . . . . . . . . .-10-
(b) Currency . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
1.3 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.1 Agreement to Purchase and Sell. . . . . . . . . . . . . . . . . .-10-
(a) Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
(b) Selection and Legal Characterization. . . . . . . . . . . . . .-10-
2.2 Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . .-11-
2.3 Purchase and Sale Procedure. . . . . . . . . . . . . . . . . . . .-11-
(a) General. . . . . . . . . . . . . . . . . . . . . . . . . . . .-11-
(b) Notice and Other Requirements for Retail Purchases . . . . . .-11-
(c) Estimated Amounts. . . . . . . . . . . . . . . . . . . . . .-12-
(d) Minimum Retail Paid Percentage.. . . . . . . . . . . . . . . .-12-
(e) Exact Retail Amount Due. . . . . . . . . . . . . . . . . . . .-12-
2.4 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . .-12-
(a) Computation and Payment. . . . . . . . . . . . . . . . . . . .-12-
(b) Adjustments to Purchase Price. . . . . . . . . . . . . . . .-14-
2.5 Maximum Amount of Purchases. . . . . . . . . . . . . . . . . . . .-14-
(a) Maximum. . . . . . . . . . . . . . . . . . . . . . . . . . . .-14-
(b) Reassignment of Excess Retail Obligations. . . . . . . . . . .-14-
2.6 Interest on Overdue Payments. . . . . . . . . . . . . . . . . . .-15-
2.7 Discount and Interest Calculations. . . . . . . . . . . . . . . .-15-
ARTICLE III
SELLER'S SERVICING OBLIGATIONS: COLLECTIONS; MAINTENANCE OF
RECORDS
3.1 Collections and Applications. . . . . . . . . . . . . . . . . . . .-15-
(a) Identification of Collections. . . . . . . . . . . . . . . .-15-
(b) Deposit of Collections. . . . . . . . . . . . . . . . . . . .-15-
(c) Daily Remittance Notices. . . . . . . . . . . . . . . . . . .-15-
(d) Treatment of Funds.. . . . . . . . . . . . . . . . . . . . . .-16-
(e) Application Account. . . . . . . . . . . . . . . . . . . . . .-16-
(f) Cancellation of Daily Remittance Notice. . . . . . . . . . . .-16-
3.2 Collections by Seller. . . . . . . . . . . . . . . . . . . . . . .-17-
(a) Seller's Servicing Duties. . . . . . . . . . . . . . . . . .-17-
(b) Indemnification. . . . . . . . . . . . . . . . . . . . . . . .-18-
(c) Power of Attorney. . . . . . . . . . . . . . . . . . . . . . .-18-
(d) Service Default. . . . . . . . . . . . . . . . . . . . . . . .-19-
(e) Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . .-19-
(f) Termination of Servicing by Seller.. . . . . . . . . . . . . .-20-
(g) Reinstatement of Servicing by Seller . . . . . . . . . . . . .-21-
3.3 Maintenance of Records. . . . . . . . . . . . . . . . . . . . . .-21-
(a) Access, etc. . . . . . . . . . . . . . . . . . . . . . . . . .-21-
(b) Delivery of Records and Contracts. . . . . . . . . . . . . . .-22-
(c) Marking of Records. . . . . . . . . . . . . . . . . . . . . .-22-
(d) Segregation of Records.. . . . . . . . . . . . . . . . . . . .-22-
3.4 Rebates, Adjustments, Returns and Reductions. . . . . . . . . . . .-22-
ARTICLE IV
ADJUSTMENTS; SETTLEMENTS
4.1 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . .-23-
(a) Date of Adjustments. . . . . . . . . . . . . . . . . . . . . .-23-
(b) Anticipated Collections. . . . . . . . . . . . . . . . . . .-23-
(c) Fast Pay/Slow Pay Adjustments. . . . . . . . . . . . . . . . .-23-
(d) Applicable Adjustment Percentage. . . . . . . . . . . . . . .-24-
(e) Discount Factor. . . . . . . . . . . . . . . . . . . . . . .-24-
4.2 Settlement Statements; Charging Defaulted Obligations . . . . . . .-25-
(a) Settlement Statement. . . . . . . . . . . . . . . . . . . .-25-
(b) Defaulted Obligations. . . . . . . . . . . . . . . . . . . . .-26-
(c) Adjustments to Deferred Payment. . . . . . . . . . . . . . .-26-
(d) Required Retail Deferred Payment Level.. . . . . . . . . . . .-28-
(e) Payments to Seller After Default.. . . . . . . . . . . . . . .-28-
(f) Adjustments in Payments to Banks.. . . . . . . . . . . . . . .-28-
(g) Termination of Agreement. . . . . . . . . . . . . . . . . . .-29-
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Covenants, Representations and Warranties by the Seller.. . . . . .-29-
5.2 Repurchase of Retail Obligations. . . . . . . . . . . . . . . . .-32-
5.3 Invalidity, etc. . . . . . . . . . . . . . . . . . . . . . . . . .-32-
ARTICLE VI
CONDITIONS TO EFFECTIVENESS/PURCHASES
6.1 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . .-32-
6.2 Conditions to Each Purchase.. . . . . . . . . . . . . . . . . . . .-32-
ARTICLE VII
THE AGENT AND THE BANKS
7.1 For Benefit of Banks Only.. . . . . . . . . . . . . . . . . . . . .-34-
7.2 Status of Agent.. . . . . . . . . . . . . . . . . . . . . . . . . .-34-
7.3 Purchase and Sale.. . . . . . . . . . . . . . . . . . . . . . . . .-34-
(a) Agreements to Purchase and Sell. . . . . . . . . . . . . . .-34-
(b) Ownership Percentages. . . . . . . . . . . . . . . . . . . .-34-
(c) Purchase Price; Adjustments on Account of
Exact Amounts Due. . . . . . . . . . . . . . . . . . . . . . .-34-
(i) Computation. . . . . . . . . . . . . . . . . . . . . . .-34-
(ii) Effect of Purchase. . . . . . . . . . . . . . . . . . .-35-
(iii) Remittances - Estimated Amounts. . . . . . . . . . . .-35-
(iv) Remittances - Exact Amounts. . . . . . . . . . . . . . .-36-
(d) Confirmation of Ownership Interests. . . . . . . . . . . . . .-36-
7.4 Maximum Amounts of Purchases. . . . . . . . . . . . . . . . . . .-36-
7.5 Sharing of Earned Discounts . . . . . . . . . . . . . . . . . . . .-37-
7.6 Distributions to Banks of Payments Received by Agent. . . . . . . .-37-
7.7 Further Payments on Account of Deferred Payment Excesses and
Timing Adjustments. . . . . . . . . . . . . . . . . . . . . . . .-37-
7.8 Mechanics of Payments . . . . . . . . . . . . . . . . . . . . . . .-38-
(a) Payments by Banks. . . . . . . . . . . . . . . . . . . . . .-38-
(b) Payments by the Agent. . . . . . . . . . . . . . . . . . . .-38-
7.9 Actions by Agent. . . . . . . . . . . . . . . . . . . . . . . . . .-38-
(a) Exercise of Rights. . . . . . . . . . . . . . . . . . . . . .-38-
(b) Complete Servicing Transfer. . . . . . . . . . . . . . . . .-39-
(c) Recovery From Seller or CFC. . . . . . . . . . . . . . . . .-39-
7.10 Non-Performance by Bank. . . . . . . . . . . . . . . . . . . . . .-39-
(a) Consequences of Default. . . . . . . . . . . . . . . . . . . .-39-
(b) Purchase of Defaulting Bank's Interest.. . . . . . . . . . . .-39-
(c) Liability of Banks to Agent. . . . . . . . . . . . . . . . . .-40-
7.11 Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . .-40-
ARTICLE VIII
MISCELLANEOUS
8.1 Long-Term RPA. . . . . . . . . . . . . . . . . . . . . . . . . . .-40-
8.2 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . .-40-
8.3 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.5 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . .-41-
8.6 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-41-
8.9 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .-41-
EXHIBIT A LONG-TERM RETAIL SPA:
CERTIFICATE OF RETAIL AMOUNT OUTSTANDING . . . . . . . .-47-
EXHIBIT B LONG-TERM RETAIL SPA: ASSIGNMENT . . . . . . . . . . . .-48-
EXHIBIT C LONG-TERM RETAIL SETTLEMENT STATEMENT . . . . . . . . . .-50-
EXHIBIT D FORM OF OPINION OF COUNSEL FOR THE SELLER
REQUIRED FOR EACH PURCHASE. . . . . . . . . . . . . . . .-52-
EXHIBIT E NOTICE UNDER S. 7.3(c)(ii)(A) OF LONG-TERM
RETAIL PURCHASE AND SERVICING AGREEMENT . . . . . . . . .-58-
EXHIBIT F-1 NOTICE UNDER S. 7.3(c)(iii)(B) OF
LONG-TERM RETAIL PURCHASE AND SERVICING AGREEMENT . . . .-59-
EXHIBIT F-2 NOTICE UNDER S. 7.3(c)(iii)(B) OF LONG-TERM RETAIL
PURCHASE AND SERVICING AGREEMENT . . . . . . . . . . . .-60-
EXHIBIT G NOTICE UNDER S. 7.3(c)(iii)(C) OF LONG-TERM RETAIL
PURCHASE AND SERVICING AGREEMENT . . . . . . . . . . . . -61-
<PAGE>
THIS LONG-TERM RETAIL PURCHASE AND SERVICING AGREEMENT is dated as of
May 23, 1994, among ROYAL BANK OF CANADA, a Canadian chartered bank having
offices at 200 Bay Street, South Tower, Royal Bank Plaza, Toronto, Ontario
M5J 2J5 ("Royal"), CHRYSLER CREDIT CANADA LTD. ("CCCL"), a Canadian
corporation having its principal office at 2233 Argentia Road, Mississauga,
Ontario L5N 2X7, in its capacity as seller of the Retail Obligations
hereunder (in such capacity, "Seller"), and such Chartered Banks (including
Royal) as are listed on the signature pages hereto and may become parties
to this Agreement from time to time (collectively, the "Banks"), and ROYAL
as agent for and on behalf of the Banks (in such capacity, the "Agent").
RECITALS
A. WHEREAS the Seller in the regular course of its business acquires
receivables arising from retail sales within Canada of new and used
passenger automobiles and light-duty trucks by independent and affiliated
dealers (located in Canada) in such vehicles, which receivables are
evidenced by retail instalment sale contracts between the Seller and the
retail purchasers providing for (i) payment by the retail purchasers of
amounts in instalments over a period of time and (ii) the retention of
title to or the reservation by or grant to the Seller of a lien on or a
security interest in the vehicles sold thereunder as security for such
payments (such contracts being herein called "Contracts"); and
B. WHEREAS the Seller desires to sell to the Banks from time to time all
of the Seller's right, title and interest in, to and under Contracts with
not more than 60 months remaining from the Date of Sale (as defined herein)
for such Contracts to the maturity thereof and with an original term of not
more than 73 months including, without limitation, all of the Seller's
right, title and interest in and to all indebtedness and liability for all
monies due and to become due to the Seller thereunder or in respect thereof
and all rights, claims and benefits of the Seller provided for therein or
otherwise related thereto (such Contracts and all indebtedness and
liability for all monies due and to become due to the Seller thereunder or
in respect thereof and all rights, claims and benefits of the Seller
provided for therein or otherwise related thereto, being herein
collectively called the "Retail Obligations"); and the several Banks are
agreeable to purchasing pro rata undivided interests in such Retail
Obligations on the terms and conditions contained herein;
C. WHEREAS CCCL, CFC and Royal are parties to a Retail Purchase and
Servicing Agreement dated as of January 27, 1993 (the "1993 RPA") pursuant
to which Royal agreed to purchase, and CCCL agreed to sell, retail accounts
receivable (the "1993 Obligations");
D. WHEREAS the parties hereto have entered into a Long-Term Receivables
Purchase Agreement dated as of May 23, 1994 (the "Long-Term RPA") which,
along with the Related Documents (as defined in the Long-Term RPA) will in
part replace the Standby Receivables Purchase Agreement dated January 27,
1993;
E. WHEREAS the parties hereto wish to set out herein the terms and
conditions that shall govern the purchase and sale of Retail Obligations
effective the Replacement Effective Date; and
F. WHEREAS Royal has agreed to act as administrative agent for the Banks
in effecting the purchase of the Retail Obligations on their behalf and in
administering collections and disbursements in respect of such Retail
Obligations;
NOW THEREFORE in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Long-Term Retail Purchase
and Servicing Agreement, the following capitalized terms shall have the
following meanings, unless the context shall otherwise require:
"Agent" shall mean Royal acting in its capacity as agent hereunder and
pursuant to Article VIII of the Long-Term RPA for and on behalf of the
Banks.
"Aggregate Amount Outstanding" shall mean, at the date of any
determination thereof (after giving effect to the adjustments provided for
in section 4.2), the excess, if any, of (i) the sum of the applicable
Retail Paid Percentages of (A) the Exact Retail Amounts Due upon all Retail
Obligations purchased hereunder with respect to which the Exact Retail
Amount Due shall then have been determined and (B) the Estimated Retail
Amounts Due upon all Retail Obligations purchased hereunder with respect to
which the Exact Retail Amount Due shall not then have been determined over
(ii) the excess, if any, of (A) the aggregate amount of all collections on
all Retail Obligations purchased hereunder theretofore remitted by the
Seller to the Agent pursuant to this Agreement or otherwise received by the
Agent over (B) the sum of (I) the aggregate amount theretofore applied
pursuant to clauses (ii), (iii), (iv), (v) and (vi) of subsection 4.2(c)
out of the Retail Deferred Payments applicable to the Retail Obligations
purchased hereunder and (II) the aggregate amount of the discounts deducted
by the Agent in computing the purchase price of all Retail Obligations
theretofore purchased hereunder which shall then have been earned by the
Banks.
"Agreement" shall mean this Long-Term Retail Purchase and Servicing
Agreement as the same may from time to time be amended, supplemented or
otherwise modified.
"Anticipated Collection Schedule" shall have the meaning assigned in
subsection 4.1(b).
"Applicable Adjustment Percentage" shall have the meaning assigned in
subsection 4.1(d).
"Applicable Anticipated Collection Schedule" shall mean, with respect
to the Retail Obligations sold or to be sold to the Banks hereunder on any
related Closing Dates, the Anticipated Collection Schedules applicable to
such Retail Obligations.
"Applicable Yield" shall have the meaning assigned in subsection
2.4(b).
"Application Account" shall mean the account held and maintained by,
and in the name and sole control of, the Agent at its main branch, South
Tower, Royal Bank Plaza, Toronto, Ontario and entitled the "Royal Bank of
Canada Special Application Account".
"Assignment" shall mean each instrument of assignment substantially in
the form of Exhibit B delivered pursuant to subsection 2.3(b)(iii)(B).
"Available Commitment" shall have the meaning assigned in the Long-
Term RPA.
"Bank" means any of the Chartered Banks listed on the signature pages
hereto, including Royal, and such other Chartered Banks as may become
parties to this Agreement from time to time.
"Bank's BA/CDOR Spread" in respect of a Retail Purchase shall mean the
excess, if any, notified by a Bank to the Agent of (i) the Bank's BA Rate
for one month Canadian dollar bankers' acceptances over (ii) the CDOR Rate,
in each case determined as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date; provided, however, that for purposes of the foregoing
definition the Bank's BA Rate shall be determined exclusive of the reserve
costs incorporated in clause (ii) of the definition of Bank's BA Rate.
"Bank's BA Rate" based on discount bankers' acceptances shall mean the
rate per annum from time to time notified by a Bank to the Agent and the
Seller as being the sum of (i) the rate per annum then in effect for
determining discounts on such Canadian dollar bankers' acceptances accepted
by the Bank in Canada and held for its own account (such rates to be
exclusive of any reserve costs) plus, if applicable, (ii) a percentage,
expressed as a decimal, established by the Bank at such time, such
percentage not to exceed the percentage which represents the effective cost
to the Bank of the aggregate of all primary, secondary and other reserve
requirements which are applicable to Canadian dollar deposits accepted by
such Bank in Canada for a term approximating the maturity period for such
bankers' acceptances and which are in effect at such time.
"Bank's Reserve Adjustment" in respect of a Retail Purchase shall mean
the percentage, expressed as a decimal, established by a Bank as of 10:00
a.m. Toronto time on the Fixed Rate Determination Date and notified by such
Bank to the Agent and the Seller, such percentage not to exceed the
percentage which represents the effective cost to the Bank of the aggregate
of all primary, secondary and other reserve requirements which are
applicable to Canadian dollar deposits accepted by such Bank in Canada for
a term approximating the Estimated Weighted Average Life of the Retail
Obligations to be purchased by the Banks and which are in effect at such
time.
"Blended BA/CDOR Spread" in respect of a Retail Purchase shall mean
the spread determined as the sum of the products obtained by multiplying
each Bank's BA/CDOR Spread by such Bank's Purchase Percentage.
"Blended BA Rate" shall mean the rate per annum equal to the sum of
the products obtained by multiplying each Bank's BA Rate by such Bank's
Purchase Percentage.
"Blended Reserve Adjustment" in respect of a Retail Purchase shall
mean the percentage, expressed as a decimal, determined as the sum of the
products obtained by multiplying each Bank's Reserve Adjustment by such
Bank's Purchase Percentage.
"Bond Bid Yield" applicable to a Retail Purchase shall mean a bid rate
determined by the Agent as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date for Government of Canada bonds or notes in the
approximate amount of the Estimated Fixed Rate Purchase Proceeds with
approximately the same maturity as the Estimated Weighted Average Life of
the Retail Obligations to be purchased by the Banks with interest payments
being made semi-annually.
"Branch Account" shall have the meaning assigned in subsection 3.1(b).
"Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday in Toronto, Ontario or New York, New York.
"Calculation Period" shall mean (i) the period from and including
Closing Date (unless such Closing Date is a Settlement Date, in which case
the provisions of clause (ii) of this definition shall apply) to but not
including the Settlement Date next following such Closing Date and (ii) the
period from and including a Settlement Date (including any Settlement Date
which is also a Closing Date) to but not including the next succeeding
Settlement Date.
"Cash Equivalents" shall mean (i) debt securities issued or directly
and fully guaranteed or insured by the Government of Canada or any Province
thereof or any agency or instrumentality thereof having maturities prior to
the immediately succeeding Settlement Date, (ii) instruments of deposit,
having maturities prior to the immediately succeeding Settlement Date, of
or guaranteed by the Agent or any Bank, (iii) bankers' acceptances accepted
by the Agent or any Bank, or (iv) debt securities issued by any corporation
which are rated at least R-1 (low) by Dominion Bond Rating Service Inc. or
Al (low) by CBRS Inc., in each case maturing prior to the immediately
succeeding Settlement Date.
"CDOR Rate" means, on any day, the annual rate of interest which is
the rate based on an average 30 day rate applicable to Canadian Dollar
bankers' acceptances appearing on the "Reuters Screen CDOR Page" (as
defined in the International Swap Dealer Association, Inc. definitions, as
modified and amended from time to time) as of 10:00 a.m. on such day, or if
such day is not a Business Day then on the immediately preceding Business
Day; provided, however, if such rates do not appear on the Reuters Screen
CDOR Page as contemplated, then the CDOR Rate on any day shall be
calculated as the arithmetic mean of the 30 day rates applicable to
Canadian Dollar bankers' acceptances quoted by four major Canadian Schedule
I chartered banks as of 10:00 a.m. on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day. Initially,
the four major Canadian Schedule I chartered banks will be Bank of
Montreal, The Bank of Nova Scotia, Royal and Canadian Imperial Bank of
Commerce. If less than four of the institutions described in the
immediately preceding sentence quote the aforementioned rate on the days
and at the times described above, the "CDOR Rate" shall be such other rate
or rates as the parties may agree.
"CFC" shall mean Chrysler Financial Corporation, a Michigan
corporation.
"Chartered Bank" means a bank named on Schedule I or Schedule II to
the Bank Act (Canada).
"Chrysler Canada" shall mean Chrysler Canada Ltd., a Canadian
corporation.
"Closing Date" shall have the meaning assigned in section 2.3(a).
"Commitment" and "Commitment Amount" shall have the meanings assigned
in the Long-Term RPA.
"Commitment Period" shall have the meaning assigned in the Long-Term
RPA.
"Complete Servicing Transfer" shall have the meaning assigned in
subsection 3.2(f).
"Contracts" shall have the meaning assigned in the first recital.
"Daily Remittance Notice" shall mean a written notification delivered
by the Agent to the Seller in accordance with subsection 3.1(c), requesting
a remittance to the Application Account in accordance with subsection
3.1(c) of collections received by the Seller on account of the Sold Retail
Obligations.
"Date of Sale" shall have the meaning assigned in section 2.3(a).
"Defaulted Retail Obligations" shall have the meaning assigned in
subsection 4.2(a)(ii).
"Deferred Percentage (Retail Gross)" shall mean, in respect of Retail
Obligations purchased hereunder, 8%; and "Deferred Percentage (Retail Net)"
shall mean, in respect of Retail Obligations purchased hereunder, 10%;
provided that, if on any Settlement Date the Period Losses for the three
Settlement Periods immediately preceding such Settlement Date shall exceed,
on an annualized basis, 3% of the average unpaid balance of the Total
Portfolio for such Settlement Periods, the Deferred Percentage otherwise
applicable pursuant to each of the two foregoing definitions shall be
increased for each Closing Date occurring during the Calculation Period
following such Settlement Date by an amount equal to such excess (rounded
up to the next one-half of one percent).
"Discount Factor" shall have the meaning assigned in subsection
4.1(e).
"Estimated Fixed Rate" shall mean the Agent's estimate of the Fixed
Rate determined by the Agent after consultation with the Seller and
provided to the Seller upon request from time to time.
"Estimated Fixed Rate Purchase Proceeds" shall mean the amount
notified by the Seller to the Agent as being the Seller's estimate of the
net proceeds to be paid by the Agent to the Seller in respect of a Retail
Purchase based on the Estimated Fixed Rate provided by the Agent to the
Seller.
"Estimated Retail Amount Due" shall have the meaning assigned in
section 2.3(c)(i).
"Estimated Weighted Average Life" of Retail Obligations to be
purchased by the Banks shall mean the Seller's estimate of the Weighted
Average Life of such Retail Obligations notified by the Seller to the
Agent, such estimate to be calculated based on the applicable Estimated
Fixed Rate provided by the Agent to the Seller.
"Exact Retail Amount Due" shall have the meaning assigned in section
2.3(e).
"Fixed Rate" in respect of a Retail Purchase shall mean an annual rate
which is the sum of (i) the Bond Bid Yield; plus (ii) the applicable
Offered Spread (each of (i) and (ii) converted to a rate based on monthly
rather than semi-annual interest payments); plus (iii) the positive
difference between 0.625% and the Long-Term Facility Fee Percentage (which
difference is 0.4375%); plus (iv) the Blended BA/CDOR Spread; plus (v) the
Blended Reserve Adjustment.
"Fixed Rate Determination Date" in respect of a Retail Purchase shall
mean the third Business Day prior to the related Closing Date.
"Governmental Authority" shall mean any nation or government, any
province or other political subdivision thereof and any entity exercising
executive, legislative, regulatory or administrative functions of or
pertaining to government.
"1993 Carried-Over Amount" shall mean at the date of determination,
the Retail Aggregate Invested Amount as defined in the 1993 RPA.
"1993 Commitments" shall have the meaning assigned in the Long-Term
RPA.
"1993 RPA" shall have the meaning assigned in the third recital
hereof.
"Level V" shall have the meaning assigned in the Revolving Credit
Agreement.
"Long-Term Facility Fee Percentage" shall have the meaning assigned in
the Long-Term RPA (being 0.1875%).
"Long-Term RPA" shall have the meaning assigned in the fourth recital.
"Long-Term Wholesale Aggregate Invested Amount" shall have the meaning
assigned in the Long-Term RPA.
"Offered Spread" applicable to a Bond Bid Yield is the spread
determined by the Agent as of 10:00 a.m. Toronto time on the Fixed Rate
Determination Date to be the spread above the Bond Bid Yield normally
offered by Royal for a swap of a similar maturity and amount which converts
the Bond Bid Yield to Royal's 30 day Canadian dollar banker's acceptance
rate.
"Ownership Interest" of a Bank on any Settlement Date shall mean the
excess, if any, of (i) the aggregate purchase price paid by such Bank to
the Agent pursuant to subsection 2.4(a) (as adjusted pursuant to
subsections 7.3(c) and (d)); and including any purchase price paid on such
Settlement Date, if any) for the undivided ownership interest purchased by
such Bank in the Sold Retail Obligations over (ii) the difference between
(A) the aggregate amount of all collections, if any, received by such Bank
(excluding collections which are deemed to occur by reason of a charge to
the Retail Deferred Payment but including collections received on such
Settlement Date on account of the Settlement Periods next preceding such
Settlement Date) and (B) the sum of (x) such Bank's Purchase Percentage of
the aggregate amount of payments, if any, made to the Seller pursuant to
subsection 4.2(c) (including any such payment made on such Settlement Date)
and (y) such Bank's Purchase Percentage of the aggregate amount of the
discounts deducted by the Agent in computing the purchase price of all Sold
Retail Obligations which shall then have been earned by such Bank.
"Ownership Percentage" of a Bank shall mean a fraction the numerator
of which is such Bank's Ownership Interest and the denominator of which is
the sum of the Ownership Interests of all Banks.
"Period Losses" means all sums chargeable during the applicable period
to bad debts (or similar accounts) under CCCL's normal accounting practices
in respect of the Total Portfolio during such period, net of recoveries
during such period of sums previously charged to bad debts (or similar
accounts) in respect of the Total Portfolio.
"Person" means an individual, corporation, partnership, trust, joint
venture, unincorporated organization, body corporate, personal
representative, cooperative, association or Governmental Authority.
"Primary Retail Deferred Payment" shall have the meaning assigned in
subsection 4.2(b).
"Prime Rate" means on any day the greater of (i) the annual rate of
interest announced from time to time by the Agent as its reference rate
then in effect for determining interest rates on Canadian dollar
denominated commercial loans in Canada and (ii) the annual rate of interest
equal to the sum of (A) the CDOR Rate and (B) 1% per annum.
"Purchase Percentage" of a Bank shall have the meaning assigned in the
Long-Term RPA.
"Purchase Price" shall have the meaning assigned in section 2.4(a).
"Replacement Effective Date" shall have the meaning assigned in the
Long-Term RPA.
"Required Banks" as of any particular time shall have the meaning
assigned in the Long-Term RPA.
"Required Retail Deferred Payment Level" shall have the meaning
assigned in subsection 4.2(d).
"Responsible Officer" shall have the meaning assigned in the Long-Term
RPA.
"Retail Amount Outstanding" shall have the meaning assigned in
subsection 2.5(a).
"Retail Deferred Payment" shall have the meaning assigned in
subsection 2.4(a)(i).
"Retail Deferred Payment Excess" shall have the meaning assigned in
subsection 4.2(c).
"Retail Obligations" shall have the meaning assigned in the second
recital.
"Retail Paid Percentage" shall mean such percentage which when applied
to the Estimated Retail Amount Due upon the Retail Obligations purchased by
the Banks on any Closing Date hereunder and assuming collections on such
Retail Obligations as anticipated in accordance with the Applicable
Anticipated Collection Schedule relating to such Retail Obligations
delivered to the Agent pursuant to subsection 4.1(b) and the application of
such collections in accordance with the assumptions made in preparing such
Applicable Anticipated Collection Schedule, will cause the aggregate annual
rate of return to the Banks on the amount paid on such Closing Date by the
Agent to the Seller for such Retail Obligations (without including in such
amount paid the amount of the Retail Deferred Payment applicable to such
Retail Obligations retained by the Banks) to be equal to the Fixed Rate
applicable to the purchase of Retail Obligations hereunder.
"Retail Purchase" shall mean a purchase of Retail Obligations
hereunder made pursuant to Article II.
"Revolving Credit Agreement" shall have the meaning assigned in the
Long-Term RPA.
"Service Default" shall have the meaning assigned in subsection
3.2(d).
"Settlement Date" shall mean the third Tuesday in each calendar month
(or if the third Tuesday in any calendar month is not a Business Day then
the next day in such calendar month which is a Business Day).
"Settlement Period" shall mean, with respect to any Settlement Date,
the calendar month next preceding such Settlement Date.
"Software" shall have the meaning assigned in subsection 3.2(f)(v).
"Sold Retail Obligations" shall mean the Retail Obligations purchased
by the Banks hereunder through the Agent.
"Total Portfolio" means all Contracts and all Wholesale Contracts,
whether sold or unsold, owned by CCCL or any Seller at any time during the
period immediately preceding the date of determination of Period Losses.
"Weighted Average Life" of Retail Obligations to be purchased by the
several Banks through the Agent hereunder shall mean the anticipated
weighted average life remaining on the Sold Retail Obligations as of the
Date of Sale calculated as follows based on the Applicable Anticipated
Collection Schedule: the Selling Discount divided by the Net Proceeds
divided by the Fixed Rate expressed as a decimal where "Net Proceeds" means
the Retail Paid Percentage of the Estimated Retail Amount Due and the
"Selling Discount" means the difference between the Estimated Retail Amount
Due and the sum of the Net Proceeds and the Retail Deferred Payment.
"Wholesale Contracts" shall have the meaning assigned in the Long-Term
RPA.
"Wholesale PSA" shall have the meaning assigned in the Long-Term RPA.
1.2 Other Definitional Provisions.
(a) Certain References. The words "hereof", "herein" and "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,
and section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
(b) Currency. All amounts and values expressed in this Agreement are
expressed in Canadian currency.
1.3 Headings. The headings used in this Agreement and the Index are for
convenience of reference only and shall not affect the interpretation of
this Agreement.
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.1 Agreement to Purchase and Sell.
(a) Sale. Subject to the terms and conditions of this Agreement and
the Long-Term RPA, the Seller may at its option, sell to the several Banks,
and each Bank severally agrees to purchase as tenant in common, from the
Seller, with the Agent acting as intermediary in accordance with this
Agreement and the Long-Term RPA, from time to time on each Closing Date
during the Commitment Period undivided interests in all the right, title
and interest of the Seller in, to and under all Retail Obligations to be
described in schedules to be delivered to the Agent at least three Business
Days prior to each related Closing Date hereunder for a purchase price
equal to the product of such Bank's Purchase Percentage and the Purchase
Price of the Retail Obligations being sold on the related Closing Date.
(b) Selection and Legal Characterization. Those Retail Obligations
to be sold to the Banks hereunder on any Closing Date shall be selected
from the total portfolio of Retail Obligations then owned by the Seller on
a random basis agreed upon between the Seller and the Agent, on behalf of
the Banks. Any sale of Retail Obligations pursuant to this Agreement shall
not constitute a mortgage, pledge, lien, security interest, conditional
sale, title retention agreement or other similar encumbrance in respect of
any such Retail Obligations.
2.2 Replacement. Upon the Replacement Effective Date, subject as
hereinafter provided, the 1993 Commitments shall be terminated. Any 1993
Carried-Over Amount outstanding shall remain outstanding under and pursuant
to the 1993 RPA provided that such 1993 Carried-Over Amount shall be
credited as to 70% thereof to reduce the several Banks' obligations to make
Retail Purchases hereunder and under the Long-Term RPA and provided further
that any amount payable hereunder or thereunder as of the Replacement
Effective Date to NBD Bank, Canada, or to Hongkong Bank of Canada shall
continue to be so payable as if the 1993 RPA were still in full force and
effect.
2.3 Purchase and Sale Procedure.
(a) General. Subject to the Long-Term RPA and the terms and
conditions provided in this subsection 2.3 and in Article VII, sales of
Retail Obligations hereunder may take place on any Business Day during the
Commitment Period (each date upon which a sale of Retail Obligations may
occur hereunder being herein called a "Closing Date" applicable to such
sale). Each such sale shall be as of the close of business on the last day
of the calendar month immediately preceding the related Closing Date (each
such date being herein called a "Date of Sale" applicable to such Sold
Retail Obligations) and shall take place at the office of the Agent or at
such other place as may be agreed upon.
(b) Notice and Other Requirements for Retail Purchases. In respect of
any sale of Retail Obligations proposed to be made by the Seller hereunder:
(i) the Seller shall comply with all applicable conditions
precedent for Purchases contained in Section 4.4 of the
Long-Term RPA and for Retail Purchases contained in
Article VI of this Agreement;
(ii) the Seller shall give the Agent five Business Days'
prior written notice of the Seller's intention to sell
Retail Obligations hereunder; and
(iii) on each Closing Date hereunder the Seller shall deliver
to the Agent (A) a certificate in the form of Exhibit A
attached hereto, duly executed by a Responsible Officer
of the Seller, dated such Closing Date, setting forth
the Retail Amount Outstanding before giving effect to
the purchase and sale to be effected on such Closing
Date and (B) an Assignment, dated such Closing Date,
assigning and transferring to the Banks in proportion
to their respective Purchase Percentages, as of the
close of business on the related Date of Sale with
respect to each sale of any Retail Obligations
hereunder, all right, title and interest of the Seller
in and to the Retail Obligations described in the
schedule delivered to the Agent prior to such Closing
Date pursuant to subsection 2.1(a), a copy of which
schedule shall also be attached to such Assignment.
(c) Estimated Amounts. Not less than five Business Days prior
to each Closing Date hereunder, the Seller shall deliver to the Agent with
respect to the Retail Obligations to be sold on such Closing Date:
(i) the Seller's estimate in writing of the amount due and
to become due upon all of the Retail Obligations to be
sold to the Banks on such Closing Date (such amount and
each such estimated amount applicable to the Retail
Obligations purchased on any Closing Date being herein
called the "Estimated Retail Amount Due" upon such
Retail Obligations),
(ii) the Applicable Anticipated Collection Schedule relating
to such Retail Obligations, and,
(iii) no later than the applicable Fixed Rate Determination
Date, a statement of the Retail Paid Percentage of the
Estimated Retail Amount Due upon such Retail
Obligations.
(d) Minimum Retail Paid Percentage. The Banks shall have no
obligation to purchase any Retail Obligations on any Closing Date hereunder
unless the Retail Paid Percentage of the Estimated Retail Amount Due upon
the Retail Obligations proposed to be sold to it on such Closing Date
exceeds $5,000,000.
(e) Exact Retail Amount Due. As soon as practicable, but in any
event not later than the last Business Day of the calendar month in which
such Closing Date shall have occurred, the Seller will furnish to the Agent
a written statement of the exact amount due and to become due as of the
close of business on the related Date of Sale upon the Retail Obligations
sold to the Banks as of such Date of Sale (such amount being herein called
the "Exact Retail Amount Due" upon such Retail Obligations). If the Seller
does not furnish to the Agent a written statement of the Exact Retail
Amount Due in respect of Retail Obligations purchased on a Closing Date by
the end of the calendar month in which such Closing Date occurs, then for
the purposes of this Agreement, the Seller shall be deemed to have
furnished to the Agent a written statement of the Exact Retail Amount Due
identical to the related statement of the Estimated Retail Amount Due in
respect of the Retail Obligations purchased on such Closing Date.
2.4 Payment of Purchase Price.
(a) Computation and Payment. The aggregate purchase price
("Purchase Price") for the Retail Obligations to be purchased by and sold
to the Banks on each Closing Date hereunder shall equal the aggregate of
the net amounts payable by the Banks, or by the Agent on behalf of the
Banks, as applicable, to the Seller in respect of a purchase of Retail
Obligations hereunder after effect has been given to the following
provisions:
(i) On each Closing Date each Bank shall deduct from its
Purchase Percentage of the Estimated Retail Amount Due
upon such Retail Obligations and retain its Purchase
Percentage of an amount (such amount, as the same may
be increased or reduced as provided for herein, being
herein called the "Retail Deferred Payment" applicable
to such Retail Obligations) equal to the lesser of (x)
the Deferred Percentage (Retail Gross) of the Estimated
Retail Amount Due upon such Retail Obligations and (y)
the Deferred Percentage (Retail Net) of the Retail Paid
Percentage of the Estimated Retail Amount Due upon such
Retail Obligations; and, subject to receipt from each
Bank of its Purchase Percentage thereof, the Agent
shall pay the Seller an amount equal to the Retail Paid
Percentage of the Estimated Retail Amount Due upon such
Retail Obligations. The Retail Deferred Payment
applicable to the Sold Retail Obligations purchased on
any related Closing Date will be applied as hereinafter
provided.
(ii) Upon receipt by the Agent of the statement showing the
Exact Retail Amount Due upon such Retail Obligations:
(A) if the Exact Retail Amount Due upon such Retail
Obligations exceeds the Estimated Retail Amount Due
upon such Retail Obligations, each Bank shall, subject
to the provisions of subsection 2.5, deduct from its
Purchase Percentage of such excess and add to the
Retail Deferred Payment applicable to such Retail
Obligations its Purchase Percentage of an amount so
that the Retail Deferred Payment equals the lesser of
(x) the Deferred Percentage (Retail Gross) of the Exact
Retail Amount Due upon such Retail Obligations and (y)
the Deferred Percentage (Retail Net) of the Retail Paid
Percentage of the Exact Retail Amount Due upon such
Retail Obligations, subject to receipt from each Bank
of its Purchase Percentage thereof, and the Agent shall
promptly pay the Seller an additional amount equal to
the Retail Paid Percentage of such excess together with
interest on such additional amount computed for the
period from such Closing Date to the date of payment of
such additional amount at the Fixed Rate applicable to
such Retail Obligations; and
(B) if the Exact Retail Amount Due upon such Retail
Obligations is less than the Estimated Retail Amount
Due upon such Retail Obligations, the Seller shall
promptly pay the Agent an amount equal to the Retail
Paid Percentage of the difference between the Exact
Retail Amount Due upon such Retail Obligations and the
Estimated Retail Amount Due upon such Retail
Obligations, together with interest on such amount
computed for the period from such Closing Date to the
date of payment of such amount at the Fixed Rate
applicable to such Retail Obligations, and the Retail
Deferred Payment applicable to such Retail Obligations
shall be reduced by an amount so that the Retail
Deferred Payment equals the lesser of the amounts
referred to in (A)(x) and (A)(y) above.
(b) Adjustments to Purchase Price. The Agent, the Banks and the
Seller agree that the Purchase Price to be paid by the Agent for the Sold
Retail Obligations purchased on each Closing Date shall be adjusted from
time to time in order to ensure that the Banks shall receive an annual rate
of return (computed on a monthly basis) on their investment calculated with
respect to such Sold Retail Obligations at a rate per annum equal to the
applicable Fixed Rate (the annual rate of return specified in this
subsection 2.4(b) applicable to such Sold Retail Obligations being herein
called the "Applicable Yield" for such Sold Retail Obligations).
Accordingly, adjustments in the Purchase Price paid by the Agent for Sold
Retail Obligations shall be made on each Settlement Date as provided for in
subsection 4.1.
2.5 Maximum Amount of Purchases.
(a) Maximum. The Banks shall not be obligated to purchase any
Retail Obligations on any Closing Date hereunder if the sum of (i) the
Aggregate Amount Outstanding before giving effect to such purchase plus
(ii) the Retail Paid Percentage of the Estimated Retail Amount Due upon any
Retail Obligations to be purchased on such Closing Date (the sum of clauses
(i) and (ii) being herein called the "Retail Amount Outstanding") plus
(iii) the Long-Term Wholesale Aggregate Invested Amount would exceed the
Long-Term Commitment Amount.
(b) Reassignment of Excess Retail Obligations. Notwithstanding
the provisions of clause (i) of subsection 2.4(a), if, after the receipt by
the Agent of any written statement of Exact Retail Amount Due furnished to
the Agent pursuant to subsection 2.3(c)(i) and the calculation of the
Aggregate Retail Amount Outstanding to include the Exact Retail Amount Due
set forth on said statement, the sum of the Retail Amount Outstanding plus
the Long-Term Wholesale Aggregate Invested Amount would exceed the Long-
Term Commitment Amount, determined on the Settlement Date hereunder next
preceding the date of receipt by the Agent of such statement of Exact
Retail Amount Due and after giving effect to any purchase hereunder on such
Settlement Date, the Agent shall reassign to the Seller, without recourse,
representation or warranty, such of the Retail Obligations to which such
statement of Exact Retail Amount Due relates (selected on a random basis
agreed upon between the Seller and the Agent) as is necessary so that,
after giving effect to any reassignment of Retail Obligations then being
made, the sum of the Retail Amount Outstanding plus the Wholesale Aggregate
Invested Amount would not exceed the Long-Term Commitment Amount,
determined as aforesaid. There shall be no increase in the Retail Deferred
Payment and no payment pursuant to clause (i) of subsection 2.4(a) of this
Agreement with respect to any such Retail Obligations so reassigned.
2.6 Interest on Overdue Payments. If any amount shown by any
Settlement Statement to be payable to the Agent is not paid on the relevant
Settlement Date, such amount shall bear interest from such Settlement Date
until such amount is paid in full at a rate per annum equal to the greater
of (i) the Applicable Yield plus 2.0% and (ii) the Prime Rate plus 2.0%.
2.7 Discount and Interest Calculations. Calculations of discounts
and per annum rates under this Agreement shall be made on a monthly basis
and on the basis of a year of 365 days (or 366 days in a leap year) for
actual days elapsed.
ARTICLE III
SELLER'S SERVICING OBLIGATIONS: COLLECTIONS; MAINTENANCE OF RECORDS
3.1 Collections and Applications.
(a) Identification of Collections. The parties acknowledge that
the Seller has established a system whereby the Seller can, within two
Business Days of the receipt thereof by the branch offices of the Seller,
identify collections as attributable to the Sold Retail Obligations, and
from and after the Replacement Effective Date, the Seller will follow the
established system of collections and remittances described in subsections
3.1(b) and 3.1(c).
(b) Deposit of Collections. All collections of proceeds of, or
other payments in connection with, the Sold Retail Obligations will be paid
by the obligors under such Sold Retail Obligations to the branch offices of
the Seller or to the credit of the Seller by direct deposit to a branch
bank account of the Seller (each such account being herein called a "Branch
Account"). Such branch offices will deposit all collections received as
soon as practicable (in accordance with customary procedures) following
receipt thereof (whether attributable to the Sold Retail Obligations or
otherwise) into a Branch Account. Unless and until the Agent shall deliver
a Daily Remittance Notice to the Seller in accordance with subsection
3.1(c), the Seller shall transfer or cause to be transferred to the Agent
on each Settlement Date under this Agreement an amount equal to the
collections received by the Seller on account of the Sold Retail
Obligations during the Settlement Period which next precedes such
Settlement Date. The Seller shall transfer or cause to be transferred to
the Agent all collections applicable to the Sold Retail Obligations and
deposited in a Branch Account from but not including the related Date of
Sale. If the Seller shall transfer funds to the Application Account on
account of any item received by the Seller which is subsequently returned
or dishonoured, then the Seller may deduct the amount of such item from the
funds otherwise transferred to the Application Account on the first
Business Day after the Seller knows that such item has been returned or
dishonoured.
(c) Daily Remittance Notices. At the written request of the
Required Banks, and provided that and only if at the time of such request
at least one class of the senior unsecured debt of the Guarantor is rated
Level V, the Agent shall deliver a Daily Remittance Notice to the Seller.
The Seller acknowledges and agrees that the Required Banks may in their
sole discretion require the Agent to deliver a Daily Remittance Notice at
any time, except as provided in the preceding sentence, and the Agent
agrees that it may deliver a Daily Remittance Notice only at the request of
the Required Banks. From and after the second Business Day next following
receipt by the Seller of a Daily Remittance Notice in accordance with the
preceding sentence, the Seller shall, within two Business Day of receipt by
the branch office of such items, identify those collections which are on
account of the Sold Retail Obligations and shall, on the Business Day next
following the date of such identification, transfer or cause to be
transferred in immediately available funds to the Application Account an
aggregate amount equal to the collections so identified as attributable to
the Sold Retail Obligations. In addition to the foregoing the Seller shall
no later than the fourth Business Day following receipt of a Daily
Remittance Notice, transfer or cause to be transferred to the Application
Account all collections then held by the Seller (including those
collections deposited in a Branch Account) attributable to the Sold Retail
Obligations which were to have been remitted to the Agent on each
Settlement Date next following receipt of such Daily Remittance Notice. On
each Settlement Date following receipt by the Seller of a Daily Remittance
Notice, an amount equal to the collections deposited in the Application
Account during the immediately preceding Settlement Period shall be
transferred to the Agent from the Application Account. On the Business Day
next following such Settlement Date, any interest or other earnings on the
principal balance of the Application Account during the immediately
preceding Settlement Period shall be transferred to the Seller from the
Application Account.
(d) Treatment of Funds. The Agent shall treat all funds
deposited in the Application Account or otherwise received by the Agent
during a Settlement Period after the delivery of a Daily Remittance Notice
as collections for purposes of this Agreement as of the Settlement Date
immediately following such Settlement Period.
(e) Application Account. Neither the Seller nor any other Person
claiming by, through or under the Seller, shall have any right, title or
interest in, or any control over the use of, or any right to withdraw
moneys from, the Application Account. Amounts credited to the Application
Account may be invested by the Agent in Cash Equivalents, which investments
shall be liquidated as necessary, on each Settlement Date. Any interest or
other earnings on the principal balance of the Application Account shall be
for the account of the Seller and shall be distributable in accordance with
subsection 3.1(c). The Seller agrees that the Agent shall not be
responsible for any loss or liability arising in respect of such
investments (including as a result of the liquidation before maturity of
any such investments) except to the extent that such loss or liability is a
result of the Agent's gross negligence or wilful misconduct.
(f) Cancellation of Daily Remittance Notice. Upon receipt of a
Daily Remittance Notice, the Seller shall comply with the provisions of
subsections 3.1(b) through 3.1(e) until the Settlement Date applicable to
each Sold Retail Obligation next following the date on which such Daily
Remittance Notice shall be cancelled by a written notification to such
effect delivered at any time by the Agent to the Seller. Such notification
shall be delivered either at the written request of the Required Banks or
upon receipt by the Agent of satisfactory evidence that no class of the
senior unsecured debt of the Guarantor is rated Level V.
3.2 Collections by Seller.
(a) Seller's Servicing Duties. The Seller will, at the
Seller's cost and expense and as agent for the Banks and the Agent, but
subject at any time to the right of the Banks (through the Agent) to direct
and control, endeavour to collect, as and when the same becomes due, the
amounts owing on each Sold Retail Obligation, and in so doing the Seller
will apply the standard of care and diligence which would be prudent and
businesslike for the administration and collection of its own accounts
receivable; and, without restricting the generality of the foregoing, the
Seller shall comply with the following provisions of this section 3.2.
(i) Payment made on any Sold Retail Obligation shall be
applied in the direct order of maturity of payment due
thereon.
(ii) In the event of default under any Sold Retail
Obligation, the Seller shall have the power and
authority, on behalf of the Banks, but at the Seller's
cost and expense, to take such action in respect of any
Sold Retail Obligation (including, in the case of any
Sold Retail Obligation in respect of which a security
interest in goods shall have been obtained, the
repossession and resale of such goods), as the Seller,
in the absence of contrary instructions from the Agent,
may deem advisable. In no event shall the Seller be
entitled to take any action which would make the Agent
or any Bank a party to any litigation without the
Agent's or such Bank's express prior written consent.
In the enforcement or collection of any Sold Retail
Obligation, the Seller shall be entitled to sue the
obligor in its own name, if possible, or, if, but only
if, the Agent consents in writing, in the name of the
Agent on behalf of the Banks.
(iii) Subject to section 3.2(f), the Agent may at any
time by notice in writing terminate the authority
of the Seller to act as agent for and on behalf of
the Banks and the Agent as set forth in this
subsection 3.2.
(iv) If the Seller repossesses goods, as aforesaid, or
elects to use legal proceedings to enforce any Sold
Retail Obligation, then unless and until the Agent
shall have given the Seller written notice to the
contrary, the act of repossession or of commencing such
litigation shall be deemed to be an automatic
reconveyance by the Agent and the Banks, without
recourse, representation or warranty whatsoever, to the
Seller of all of the Agent's and the Banks' right,
title and interest in and to such Sold Retail
Obligation, and upon request by the Seller, the Agent
will execute and deliver a separate instrument
confirming such reconveyance. As the price for such
reconveyance, the Seller agrees to pay the Agent an
amount equal to all future proceeds collected on such
Sold Retail Obligation which the Agent had a right to
retain by virtue of its prior purchase.
(v) The proceeds of any reconveyance under subsection
3.2(a)(iv) shall constitute collections hereunder. In
addition, all proceeds or benefits of any physical
damage, life or disability insurance policies which are
received by the Seller and which relate to any Sold
Retail Obligations shall be treated as collections
hereunder and shall be remitted by the Seller to the
Agent on the next Settlement Date or on such earlier
date as may be required if the Seller is in receipt of
a Daily Remittance Notice.
(vi) The Seller shall be entitled to retain late
charges and extension fees received by it in the
course of its administration of the Sold Retail
Obligations.
(b) Indemnification. The Seller hereby agrees to defend and
indemnify the Agent and the several Banks against all costs, expenses,
claims and liabilities in respect of any action taken by the Seller
relative to any Sold Retail Obligation, or arising out of any failure of
compliance of any Sold Retail Obligation with the provisions of any law or
regulation, whether federal, provincial or municipal, applicable thereto
(including, without limitation, usury and consumer protection laws and
regulations). In the event of any repossession of goods, as aforesaid, the
Seller agrees to resell such goods in a commercially reasonable manner for
the account of the Banks in accordance with the requirements of all
applicable laws and regulations and shall remit to the Agent the gross sale
proceeds thereof net of the account debtor's equity of redemption, if any.
Neither the Agent nor any Bank shall have any obligation to take any action
or commence any proceedings to realize upon any Sold Retail Obligation
(including, without limitation, any Defaulted Retail Obligation), or to
enforce any of its rights or remedies with respect thereto. Any monies
collected by the Seller pursuant to subsections 3.1 and 3.2 shall be held
in trust by the Seller and shall not constitute property of the Seller and
shall be remitted promptly to the Agent in accordance with subsection 3.1.
(c) Power of Attorney. The Seller hereby irrevocably grants to
the Agent an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of the Seller
and/or in its own name on behalf of the Banks all steps necessary or
advisable to endorse, negotiate or otherwise realize on any writing or
other right of any kind held or owned by the Seller or transmitted to or
received by the Agent as payment on account or otherwise in respect of any
Sold Retail Obligation including, without limitation, to take in the name
of the Seller and/or in its own name all steps necessary or advisable to
enforce or realize on any Sold Retail Obligations and all guarantees
thereof and collateral security therefor.
(d) Service Default. Any one of the following events that
shall occur and be continuing with respect to the Seller shall constitute a
"Service Default" hereunder:
(i) any failure by the Seller to make any payment, transfer
or deposit or to give instructions or to give notice to
the Agent to make such payment, transfer or deposit on
or before the date occurring five days after the date
such payment, transfer or deposit or such instruction
or notice is required to be made or given, as the case
may be, under the terms of this Agreement;
(ii) failure on the part of the Seller duly to observe or
perform any other covenants or agreements of the Seller
set forth in this Agreement which has a material
adverse effect on the Banks and which continues
unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the
same to be remedied, shall have been given to the
Seller by the Agent; or the Seller shall delegate its
duties under this Agreement, except as permitted by
section 3.2(c);
(iii) any representation, warranty or certification made by
the Seller in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to
have been incorrect when made, which has a material
adverse effect on the rights of the Banks and which
material adverse effect continues for a period of 60
days after the date on which written notice thereof,
requiring the same to be remedied, shall have been
given to the Seller by the Agent;
(iv) any Insolvency Event (as defined in the Wholesale PSA)
shall occur with respect to the Seller.
The Seller shall immediately notify the Agent in writing of any Service
Default; however, the failure by the Seller so to notify the Agent with
respect to the occurrence of any event listed in this section 3.2(d) shall
not affect the characterization of such event as a Service Default.
(e) Force Majeure. Notwithstanding the foregoing, a delay in or
failure of performance under section 3.2(d)(i) for a period of 10 Business
Days after the grace period specified therein or under section 3.2(d)(ii)
or 3.2(d)(iii) for a period of 60 Business Days after the grace specified
therein, shall not constitute a Service Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by the
Seller and such delay or failure was caused by an act of God or the Queen's
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve the
Seller from using its best efforts to perform its respective obligations in
a timely manner in accordance with the terms of this Agreement and the
Seller shall provide the Agent, the Seller and the Banks with a certificate
of a Responsible Officer of the Seller giving prompt notice of such failure
or delay by it, together with a description of its efforts so to perform
its obligations.
(f) Termination of Servicing by Seller. At the written request
of the Required Banks, at any time after the occurrence of a Service
Default which has not been remedied within the grace period specified
therefor under section 3.2(d) or excused pursuant to section 3.2(e), the
Agent shall by notice in writing to the Seller terminate the Seller's
functions as to all of the administrative, servicing and collection
functions provided for herein (such notice being herein referred to as
notice of a "Complete Servicing Transfer"). The Seller acknowledges and
agrees that the Required Banks may in their sole discretion require the
Agent to deliver a notice of Complete Servicing Transfer at any time
provided that at such time a Service Default has occurred and is
continuing. Upon the occurrence of a Complete Servicing Transfer, without
limitation:
(i) the Agent or its designee shall administer the
servicing functions in any manner it deems fit,
provided that the Agent or its designee will furnish or
cause to be furnished to the Seller such information as
the Seller needs to perform its obligations under
subsections 4.1 and 4.2;
(ii) the Agent shall, at any time thereafter, be entitled to
notify the obligors on any Sold Retail Obligations to
make payment of amounts due thereunder directly to the
Agent or its designee;
(iii) the Seller shall, at its own expense (x) if so
requested by the Agent, endorse each instrument,
if any, evidencing any Sold Retail Obligation to
the Agent in such manner as the Agent shall direct
and (y) further perform any and all acts and
execute any and all documents as may be reasonably
requested by the Agent in order to effect the
purposes of this Agreement and the sale of Retail
Obligations hereunder and to perfect and protect
the ownership interests of the several Banks in
the Sold Retail Obligations;
(iv) the Seller shall, at its own expense, cause to be
transmitted directly to the Agent or its designee
all cash, cheques, drafts and other instruments or
items for the payment of money which may be
received by the Seller as payment on account or
otherwise in respect of any Sold Retail
Obligation, provided that the Seller may maintain
possession of such items or instruments mistakenly
delivered to it at the time a notice of Complete
Servicing Transfer is received by the Seller, in
trust for the Agent, so long as the Seller
complies with the provisions of subsection 3.1
with regard to such items or instruments and the
proceeds thereof as if a Complete Servicing
Transfer has not occurred;
(v) the Seller and CFC will upon written request by
the Agent and at their own cost and expense (A)
deliver to the Agent or its designee the Contracts
relating to the Sold Retail Obligations, and all
books, accounts, ledgers, computer records and
other records and materials pertaining thereto,
(B) grant to the Agent or its designee a non-
exclusive royalty-free licence to use all the
application software and computer programs then
being used in connection with the administration,
servicing and collection of the Sold Retail
Obligations and owned by the Seller or CFC (the
"Software"), provided, however, that any such
licence shall be restricted to the administration,
servicing and collection of Sold Retail
Obligations and shall contain such other terms as
the Seller and CFC may reasonably require to
protect their proprietary interests in the
Software, such terms to be consistent with the
provisions and intent of this clause (B), and (C)
deliver the Software in machine readable and
printed form to the Agent or its designee,
together with such other documentation and
material which may be reasonably requested by the
Agent in support of the Software including,
without limitation, specifications, source
listings, user manuals, drawings, flow charts,
methods, practices and the like; and
(vi) do all such other acts and things as the Agent may
reasonably request for the purpose of giving
effect to the provisions and intent of this
subsection 3.2(f).
(g) Reinstatement of Servicing by Seller. Upon receipt of a
notice of a Complete Servicing Transfer, the Seller shall comply with the
provisions of subsection 3.2(f) hereof until the Settlement Date next
following the date on which such Complete Servicing Transfer shall be
cancelled by a written notification to such effect delivered at any time by
the Agent (which notification shall be delivered only at the written
request of the Required Banks in their sole discretion) to the Seller.
3.3 Maintenance of Records.
(a) Access, etc. The Seller will hold in trust for the Agent and
the several Banks at the office of the Seller referred to above, or at one
or more of the Seller's branch offices, all Sold Retail Obligations,
together with such books of account and other records as will enable the
Agent or its designee to determine at any time the status thereof. The
Seller will permit the Agent (or Deloitte & Touche on behalf of the Agent
but at the expense of the Seller) at any time and from time to time to
inspect, audit, check and make abstracts from the Seller's books, accounts,
ledger cards, computer and other records, or other papers pertaining to
such Sold Retail Obligations and the Seller will at any time and from time
to time provide access to all information necessary or appropriate for the
Agent (or Deloitte & Touche on behalf of the Agent but at the expense of
the Seller) to review and evaluate the Seller's financial controls and
procedures.
(b) Delivery of Records and Contracts. From time to time upon
the written request of the Agent, the Seller at its own expense will
deliver to the Agent: (i) a schedule of the Sold Retail Obligations
indicating as to each such Sold Retail Obligation information as to the
obligor thereon, the unpaid balance thereof and the location of the
Contract evidencing such Sold Retail Obligation and such other information
as the Agent may deem appropriate, and (ii) any such Contract and such
records pertaining thereto as the Agent may deem essential to enable it to
enforce its rights thereunder. In addition, upon the written request of
the Agent, the Seller will deliver all such Contracts and records
pertaining thereto to any agent selected by the Agent. So long as such
Contracts are in possession of the Seller, such Contracts, together with
ledger cards or other account or computer records, if any, relating
thereto, will be held in trust for and kept safely for the Agent in filing
cabinets or other suitable containers.
(c) Marking of Records. Each computer record relating to Sold
Retail Obligations and all other account records relating to such Sold
Retail Obligations maintained at the principal office of CFC will be marked
with the following legend: "Sold to certain financial institutions party to
a certain Long-Term Retail Purchase and Servicing Agreement dated as of May
23, 1994 through Royal Bank of Canada acting as agent".
(d) Segregation of Records. Upon request of the Agent, the
Seller will: (i) segregate from all other receivables then owned or being
serviced by the Seller all Contracts relating to a Sold Retail Obligation;
(ii) hold in trust and safely keep such Contracts in separate filing
cabinets or other suitable containers marked to show the Agent's and the
Banks' interest with the legend specified in section 3.3(c) above and
maintained in such place or places as shall be designated by the Agent and
(iii) mark all Contracts relating to a Sold Retail Obligation with the
legend specified above.
3.4 Rebates, Adjustments, Returns and Reductions.
(a) The amount of any rebate, refund or adjustment of any Sold
Retail Obligation, the amount owing for any returns or cancellations or the
amount of any other reduction of any payment (including, without limitation
reductions in the anticipated amount of finance charges as the result of
any prepayment of any Sold Retail Obligation) under any Sold Retail
Obligation shall be treated as a collection thereon by the Seller for
purposes of this Agreement and shall: (i) during the period when a Daily
Remittance Notice is in effect, be deposited in the Application Account on
the second Business Day next following the day of such rebate, refund,
adjustment, return or reduction and shall be treated as a collection
thereon in accordance with subsection 3.1(c), and (ii) in all other cases,
be paid to the Agent on the next Settlement Date, provided that, with
respect to the Sold Retail Obligations purchased by the Banks as of any
Date of Sale, the Seller may, in any subsequent period of twelve
consecutive calendar months, extend any one instalment due under any such
Sold Retail Obligation for up to two periods of up to one calendar month
each, and such extensions shall not give rise to a deposit obligation or be
treated as a collection hereunder.
(b) The provisions of this subsection 3.4 shall not affect the
Seller's right to grant or receive any rebates, adjustments, returns or
reductions on any Retail Obligation prior to the Date of Sale thereof.
ARTICLE IV
ADJUSTMENTS; SETTLEMENTS
4.1 Adjustments.
(a) Date of Adjustments. Each Settlement Date is hereby
designated as a date for the purpose of making the following discount and
timing adjustments with respect to all collections received by the Seller
(whether (i) remitted to the Agent on the Settlement Date next following
receipt by the Seller or, (ii) in accordance with subsection 3.1(c),
transferred to the Application Account within two Business Days of receipt
by the branch offices of the Seller) in respect of the Sold Retail
Obligations during the Settlement Period next preceding such Settlement
Date.
(b) Anticipated Collections. Not less than five Business Days
prior to each Closing Date hereunder, the Seller shall deliver to the Agent
a schedule setting forth with respect to any sale of Retail Obligations on
such Closing Date, the anticipated collections for each Settlement Period
on the Retail Obligations to be sold to the Banks as of the related Date of
Sale (expressed in cumulative percentages of such Retail Obligations) (each
schedule of anticipated collections for each Settlement Period applicable
to the Sold Retail Obligations purchased on any Closing Date being herein
referred to as an "Anticipated Collection Schedule" applicable to such
Retail Obligations). Each Anticipated Collection Schedule delivered after
the Replacement Effective Date, whether delivered prior to or after the
delivery by the Agent of a Daily Remittance Notice, will be prepared on the
assumption that all amounts collected by the Seller during each Settlement
Period applicable to the Sold Retail Obligations to which such Anticipated
Collection Schedule relates will be received by the Agent on the Settlement
Date applicable to such Sold Retail Obligations next succeeding such
Settlement Period.
(c) Fast Pay/Slow Pay Adjustments. The Seller does not
guarantee collection of the Sold Retail Obligations. However, with respect
to the Retail Obligations purchased by the Banks hereunder as of any
related Date of Sale, if the cumulative aggregate amount of collections
received by the Seller or, in accordance with subsection 3.1, by the Agent,
for any related Settlement Period on such Retail Obligations purchased by
the Banks as of any related Date of Sale is less than the cumulative
aggregate amount of anticipated collections therefor, the Seller shall pay
the Agent on the next succeeding Settlement Date as a discount adjustment,
an amount determined by multiplying the amount of the Applicable Adjustment
Percentage (as hereinafter defined) of the amount of the deficiency by a
Discount Factor (as hereinafter defined) based upon the Fixed Rate
applicable to such Retail Obligations for the period from and including
such Settlement Date to the next succeeding Settlement Date. On the other
hand, if the cumulative aggregate amount of such collections exceeds the
cumulative aggregate amount of such anticipated collections, the Agent
shall credit to the Seller, as a discount adjustment, an amount determined
by multiplying the Applicable Adjustment Percentage of the amount of the
excess by a Discount Factor based upon the Fixed Rate applicable to such
Retail Obligations for the period from and including such Settlement Date
to the next succeeding Settlement Date. The Primary Retail Deferred
Payment applicable to such Retail Obligations shall be increased by the
amount referred to in the preceding sentence and applied as provided in
section 4.2(c) hereof.
(d) Applicable Adjustment Percentage. As used herein, the term
"Applicable Adjustment Percentage" shall mean, in respect of any Sold
Retail Obligations purchased by the Banks as of the related Date of Sale,
that percentage determined by dividing:
(i) the difference between (A) the anticipated amount of the
collections to be received by the Agent on the Settlement
Date next succeeding a Settlement Period applicable to
such Sold Retail Obligations (in accordance with the
assumptions made in preparing the related Anticipated
Collection Schedule) on account of such Sold Retail
Obligations and (B) the anticipated amount to be released
by the Agent to the Seller from the Primary Retail
Deferred Payment applicable to such Sold Retail
Obligations pursuant to subsection 4.2(c), on such
Settlement Date (in accordance with the assumptions made
in preparing the related Anticipated Collection
Schedule), by
(ii) the anticipated amount of the collections to be
received by the Agent on account of such Sold Retail
Obligations on such Settlement Date (in accordance with
the assumptions made in preparing the related
Anticipated Collection Schedule).
(e) Discount Factor. As used herein, the term "Discount Factor"
shall mean, with respect to the period from one Settlement Date to the next
succeeding Settlement Date, a fraction, the numerator of which is
(i) the product obtained by multiplying (A) the decimal
equivalent of the Fixed Rate applicable to the purchase
of the relevant Retail Obligations by (B) a fraction, the
numerator of which is the number of days from and
including such Settlement Date to but not including the
next succeeding Settlement Date and the denominator of
which is the number of days in the year (i.e. 365, or 366
in a leap year),
and the denominator of which is
(ii) the said numerator described in (i) plus one.
4.2 Settlement Statements; Charging Defaulted Obligations to the
Deferred Payment; Adjustments to the Deferred Payment.
(a) Settlement Statement. Not later than five Business Days
prior to each Settlement Date, until all the Sold Retail Obligations have
been paid in full and all amounts owing to the Agent on account thereof
have been transferred to the Agent, the Seller shall submit to the Agent a
Settlement Statement for each group of Retail Obligations purchased
hereunder or under the 1993 RPA on a related Closing Date, substantially in
the form of Exhibit C hereto, which shall set forth with respect to the
Sold Retail Obligations, among other things:
(i) the total collections received by the Agent on such
Retail Obligations up to and including the last day of
the next preceding Settlement Period applicable to such
Sold Retail Obligations, including collections pursuant
to subsection 3.4 and collections on Defaulted Retail
Obligations theretofore charged to the Retail Deferred
Payment applicable to such Retail Obligations and for
which the Seller shall not have previously accounted to
the Agent;
(ii) the balance on such Retail Obligations (A) on which the
obligor thereon is in default in an amount payable
thereon for three or more consecutive months and/or (B)
with respect to which any of the events of the kind
described in clauses (a) through (k) of section 7.1 of
the Long-Term RPA shall have occurred in respect of the
obligor or its assets or liabilities (such Retail
Obligations being herein collectively called "Defaulted
Retail Obligations"); and
(iii) such other information as the Agent may request
for the purpose of effecting an accounting and
settlement hereunder.
The form of Settlement Statement provided in Exhibit C will be varied to
the extent necessary to give effect to the provisions and intent of this
Agreement, it being acknowledged and agreed that in the event of any
inconsistency between the provisions of this Agreement and any Settlement
Statement delivered pursuant to this Agreement, the provisions of this
Agreement will prevail. If any application of any Retail Deferred Payment
Excess is required on any Settlement Date pursuant to clauses (i), (ii),
(iii), (iv) and (v) of subsection 4.2(c), then concurrently with the
delivery of each Settlement Statement provided for above, the Seller shall
submit to the Agent a further statement or statements in a form to be
agreed upon between the Agent and the Seller, which statement or statements
shall give effect to the application of the Retail Deferred Payment Excess.
(b) Defaulted Obligations. Subject as hereinafter provided,the
Agent may, at its option, on the Settlement Date on which a Sold Retail
Obligation is first identified as a Defaulted Retail Obligation, charge to
the Retail Deferred Payment related to the group of Sold Retail Obligations
of which such Defaulted Retail Obligation is a part (such related Retail
Deferred Payment being herein called the "Primary Retail Deferred Payment")
an amount equal to the outstanding balance on such Defaulted Retail
Obligation, and the Agent may, at its option, at any time charge any other
amount due with respect to the Sold Retail Obligations (including, without
limitation, amounts payable to the Agent pursuant to subsection 4.1(b), but
without prejudice to any right of the Agent to collect such other amounts
directly from the Seller) which is then owed to the Agent under this
Agreement and which has not been paid by the Seller in accordance with its
terms, to such Primary Retail Deferred Payment; provided that if such
Primary Retail Deferred Payment is less than the outstanding balance on
such Defaulted Retail Obligation or such other amount which is then being
charged thereto, the Agent may charge the difference to any other Retail
Deferred Payment the balance of which has not theretofore been remitted to
the Seller.
Defaulted Retail Obligations so charged to a Retail Deferred
Payment shall be retained by the Agent, and any collections thereafter made
thereon (together with any other amounts received by the Agent on account
of any other obligation of the Seller theretofore charged to such Retail
Deferred Payment) shall be credited to the applicable Retail Deferred
Payment and shall be dealt with as provided in subsection 4.2(c).
The Agent agrees with the Banks that in each case where the Agent
exercising the option provided in the first sentence of this subsection
4.2(b) elects not to charge to the Primary Retail Deferred Payment an
amount equal to the outstanding balance on a Sold Retail Obligation at the
time such Sold Retail Obligation is first identified as a Defaulted Retail
Obligation, the Agent shall give the Banks written notice of such election
within 20 days of the exercise thereof, describing in such notice in
reasonably complete detail the circumstances surrounding such election and
explaining why, in the Agent's reasonable opinion and in light of the
circumstances so described, the exercise of such election would not
reasonably be expected to prejudice the interests of the Banks.
(c) Adjustments to Deferred Payment. If after completion of the
transactions provided for in subsection 4.1(b) and in subsections
4.2(a)(ii) and 4.2(b), in each case on any Settlement Date, the Retail
Deferred Payments applicable to any Sold Retail Obligations exceed the
Required Retail Deferred Payment Level applicable to such Sold Retail
Obligations, then the amount of such excess (herein called the "Retail
Deferred Payment Excess" applicable to such Sold Retail Obligations) shall
be applied in the following order on such Settlement Date:
(i) to the payment to the Agent of amounts thereof up to an
aggregate amount equal to the aggregate amount of the
unpaid balances payable under Defaulted Retail
Obligations purchased on each Closing Date which have
not been charged against their related Primary Retail
Deferred Payments less the aggregate amount of all
previous applications pursuant to this clause 4.2(c)(i)
relative to such Defaulted Retail Obligations purchased
on each such Closing Date (applied firstly to the
payment of such amounts relative to the Defaulted
Retail Obligations purchased on any Closing Date with
the largest aggregate unpaid balance, and then to the
payment of such amounts relative to the Defaulted
Retail Obligations purchased on other Closing Dates in
descending order of their respective aggregate unpaid
balances);
(ii) to the credit of Retail Deferred Payments applicable to
those Sold Retail Obligations whose related Primary
Retail Deferred Payments are in amounts less than their
respective Required Retail Deferred Payment Levels
(applied firstly to the Primary Retail Deferred Payment
with the greatest percentage deficiency relative to its
Required Retail Deferred Payment Level, and then to the
other Primary Retail Deferred Payments in descending
order of their respective percentage deficiencies
relative to their Required Retail Deferred Payment
Levels);
(iii) to the payment of any amounts payable by the
Seller to the Agent under subsection 4.1;
(iv) to the payment of any other amounts payable by the
Seller to the Agent under this Agreement or under the
Long-Term RPA;
(v) to the payment to the Agent of the amounts of any
liabilities, losses, costs, damages and expenses
suffered or incurred by the Agent or any Bank as a
result of any claims or proceedings by obligors under
Contracts which are included in the Sold Retail
Obligations and which relate to the vehicles that are
the subject matter of such Contracts or the financing
thereof; provided that the amount to be applied in
respect of any Retail Obligation under this clause
4.2(c)(v) shall be limited to the unpaid balance of
such Contract on the related Date of Sale; and
(vi) subject to subsection 4.2(e), any remainder to the Seller.
(d) Required Retail Deferred Payment Level. As used herein, the
term "Required Retail Deferred Payment Level" applicable to any Sold Retail
Obligations shall mean the amount which is the greater of:
(A) the product of (I) the Deferred Percentage (Retail
Gross) with respect to such Retail Obligations
(determined as of such Settlement Date) times (II) the
unpaid balance of all such Retail Obligations, and
(B) the lesser of (I) the then unpaid balance of all such
Retail Obligations or (II) 4% of the sum of the Exact
Retail Amounts Due upon all such Retail Obligations as
of the Date of Sale thereof;
provided, however, that anything contained in this Agreement to the
contrary notwithstanding, in no event shall the aggregate of the Retail
Deferred Payments applicable to those Retail Obligations which have unpaid
balances of 4% or less of their respective Exact Retail Amounts Due thereon
as of their respective Dates of Sale exceed the greater of (x) $5,337,500
and (y) an amount equal to 5.45% of the maximum value of the Retail Amount
Outstanding on any Settlement Date (the "Maximum"), and if such aggregate
does exceed the Maximum, then the respective amounts of such Retail
Deferred Payments shall be reduced proportionately so that the aggregate
thereof equals the Maximum.
(e) Payments to Seller After Default. After the occurrence of
any material default by the Seller in the observance or performance of any
of the terms or conditions of this Agreement or after the occurrence of any
of the Commitment Termination Events referred to in Article VII of the
Long-Term RPA and so long as such default or event is continuing, any
Retail Deferred Payment Excess applicable to Sold Retail Obligations which
remains after the applications provided for in clauses (i), (ii), (iii),
(iv) and (v) of subsection 4.2(c) shall be paid to the Seller only if at or
prior to the time of such applications the Agent has received repayment in
full of the Banks' investment in the Sold Retail Obligations together with
the total return on such investment contemplated by subsection 2.4(b).
(f) Adjustments in Payments to Banks. Notwithstanding any
other provision of this Agreement, it is agreed that it is the intention of
the parties that the Banks shall receive repayment of the Banks'
investments in Sold Retail Obligations purchased hereunder and shall
receive an annual rate of return (computed on a monthly basis) on the
Banks' investments in such Sold Retail Obligations for the period from each
Closing Date or Settlement Date, as the case may be, to the next succeeding
Settlement Date at the rates per annum described in subsection 2.4(b), and
that any Retail Deferred Payment Excess which would otherwise be payable to
the Seller on any Settlement Date pursuant to subsection 4.2(c)(vi) shall
be paid to the Agent if and to the extent necessary to give effect to such
intention with respect to the Sold Retail Obligations.
(g) Termination of Agreement. This Agreement will terminate
when all Sold Retail Obligations and all amounts payable to the Agent and
the Banks hereunder shall have been paid in full and any remaining Retail
Deferred Payment Excess shall have been applied in accordance with
subsection 4.2(c), and the Agent and the Banks shall have no further
agreement to purchase Retail Obligations hereunder; provided, however, that
the covenants, representations, warranties and indemnities of the Seller
and CFC to the Agent and the Banks set forth in this Agreement shall
survive such termination.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Covenants, Representations and Warranties by the Seller. The
Seller hereby covenants, represents and warrants to the Agent and to each
of the several Banks that:
(a) on each Closing Date hereunder:
(i) each Retail Obligation which is then being sold to the
Banks will be sold to the Banks free and clear of all
security interests, liens, charges and other
encumbrances;
(ii) each Retail Obligation to be sold to the Banks on such
Closing Date will arise out of and include a Contract
which (x) conforms in all respects to the definition of
the term "Contract" set forth in the first recital to
this Agreement and (y) has not more than 60 months
remaining from the Date of Sale for such Contract to
the maturity thereof and (z) had an original term of
not more than 73 months;
(iii) each such Retail Obligation will represent the
genuine, legal, valid and binding payment
obligation in writing of the obligor thereon,
enforceable in accordance with its terms (subject
to all applicable bankruptcy, insolvency or other
laws affecting creditors' rights generally and any
limitations on the availability of equitable
remedies),
(iv) each such Retail Obligation will comply with all legal
requirements of the jurisdiction where it originated;
(v) each such Retail Obligation will not be a Defaulted
Retail Obligation; and
(vi) each such Retail Obligation will be secured by a first
perfected security interest or other first lien or
charge in the vehicle or vehicles financed thereby;
(b) the amount of the indebtedness outstanding on the Retail
Obligations sold to the Banks as of each Date of Sale hereunder will be the
amount set forth in the written statement of the Exact Retail Amount Due
upon such Retail Obligations to be furnished pursuant to subsection 2.3(e);
(c)(i) subject to timely registrations in accordance with
applicable legislation, each Assignment, when executed and delivered
pursuant hereto, (A) will vest in the Banks all of the right, title and
interest of the Seller in and to the Retail Obligations described therein
and (B) will constitute a valid assignment of Retail Obligations to the
Agent on behalf of the several Banks effective as against all creditors of
and purchasers from the Seller; (ii) the Seller will not have sold,
pledged, assigned or transferred, or granted any security interest in, such
Retail Obligations, and (iii) the Seller will not sell, pledge, assign or
transfer, or grant any security interest in, such Retail Obligations, or
any interest therein, to any other Person;
(d) all the requirements of all laws and regulations, whether
federal, provincial or municipal (including, without limitation, usury and
consumer protection laws and regulations), in respect of any of the Sold
Retail Obligations subject to such laws and regulations have been and will
be duly complied with;
(e) the Sold Retail Obligations are not, and will not be,
subject to any set-off, counterclaim, or other defence, whether arising out
of the transactions represented by the Sold Retail Obligations or
independently thereof;
(f) the Seller will not rescind or cancel any Sold Retail
Obligation or modify any term or provision of any thereof without the prior
written consent of the Agent, except that, while acting as agent for
collection hereunder, the Seller may, in the ordinary course of business
and upon accounting to the Agent as provided in subsection 3.4, grant
rebates or adjustments;
(g) the Seller will duly fulfil all obligations on its part to
be fulfilled under or in connection with the Sold Retail Obligations and
will do nothing to impair the rights, claims and benefits of the Banks or
the Agent under or with respect to the Sold Retail Obligations;
(h) the Seller will not prepare any financial statements which
shall account for nor will it in any other respect account for the
transactions contemplated hereby in a manner which is inconsistent with the
Banks' undivided ownership interest in the Sold Retail Obligations;
(i) the Seller is a corporation duly organized, validly existing
and in good standing under the laws of Canada, and has full power,
authority and legal right to execute and deliver this Agreement and each
Assignment and to perform and observe the terms and provisions hereof and
thereof;
(j) the execution and delivery of this Agreement and each
Assignment have been duly authorized by the Seller; and this Agreement and
each Assignment, when executed and delivered pursuant hereto,
(i) will constitute legal, valid and binding obligations or
acts, as the case may be, of the Seller in accordance
with their respective terms,
(ii) will not violate any provision of any law or regulation
or any order or decree of any court, arbitrator or
agency of government,
(iii) will not violate any provision of the articles of
incorporation or bylaws of the Seller or any
indenture, agreement or other undertaking to which
it is a party or by which it, or any of its assets
or properties, is bound or affected, and
(iv) will not be in conflict with, result in a breach of or,
with or without notice or lapse of time, constitute a
default under, any such indenture, agreement or other
undertaking or result in the creation or imposition of
any security interest, lien, charge or encumbrance of
any nature whatsoever upon any of such assets or
properties;
(k) the Seller will, in accordance with the Seller's written
practices and procedures, be responsible for ensuring that the obligors
under the Retail Obligations maintain collateral protection insurance;
(l) the Seller is duly qualified and in good standing in each
jurisdiction in which failure to qualify would render any Sold Retail
Obligation unenforceable by the Seller or the Agent;
(m) all instruments required by applicable legislation to be
registered or filed in order to protect, perfect and preserve the rights of
the Agent and the Banks in all the Sold Retail Obligations purchased by the
Banks through the Agent hereunder have been or shall be, within the time
prescribed by the applicable legislation, duly completed and executed by
the required parties and registered or filed in each appropriate office in
each applicable jurisdiction, and at the request of the Agent the Seller
will provide the Agent with appropriate evidence of the completion of such
registrations or filings;
(n) the Seller will not modify any term or provision of its
standard forms of Contracts in use in Canada in a manner which would
materially and adversely affect the position of the Agent or the Banks as
assignees thereof; and
(o) all representations and warranties of CCCL and the Guarantor
contained in the Long-Term RPA are and shall be true and correct as of the
date of each Retail Purchase.
5.2 Repurchase of Retail Obligations. If any of the foregoing
covenants, representations or warranties in respect of any Sold Retail
Obligation shall prove to have been materially incorrect at the applicable
Date of Sale or thereafter, or shall be materially breached, and such
incorrectness or breach shall not be corrected prior to the Settlement Date
in the calendar month after such incorrectness or breach became known to
the Seller, then on such Settlement Date, the Seller will pay the Agent
with respect to any affected Sold Retail Obligation, an amount equal to the
unpaid balance of such Sold Retail Obligation. Any amount paid by the
Seller under this provision shall be treated as a collection for purposes
of this Agreement. Upon receipt of such payment and all other amounts then
due to the Agent under this Agreement in respect of any so affected Sold
Retail Obligation, the Agent shall reassign its and the Banks' interest in
such affected Sold Retail Obligation, as applicable, to the Seller without
recourse, representation or warranty. The foregoing repurchase obligation
shall apply notwithstanding that the Agent at any time may have had or
should have had any knowledge of or with respect to such incorrectness or
breach.
5.3 Invalidity, etc. The obligations of the Seller to the Agent and
the Banks under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Sold Retail Obligation.
ARTICLE VI
CONDITIONS TO EFFECTIVENESS/PURCHASES
6.1 Effective Date. This Agreement shall become effective on the
Replacement Effective Date subject to the satisfaction of all conditions
precedent to the effectiveness of the Long-Term RPA contained in Article IV
thereof.
6.2 Conditions to Each Purchase. The obligation of the Banks to make
each purchase of Retail Obligations hereunder through the Agent (including
their initial purchase) on any Closing Date hereunder is subject to the
satisfaction of each and every of the following conditions:
(a) all conditions provided in the Long-Term RPA to each
Purchase (as defined in the Long-Term RPA) of Retail Obligations hereunder
shall have been satisfied;
(b) the Agent shall have received from each Bank, in immediately
available funds in accordance with section 7.3(c)(iii)(D), the full amount
of each such Bank's Purchase Percentage of the Retail Paid Percentage of
the Estimated Retail Amount Due upon the Retail Obligations to be purchased
on the Closing Date, provided that if the Agent shall not have received
from a Bank the full amount of such Bank's Purchase Percentage of the
Retail Paid Percentage of the Estimated Retail Amount Due upon such Retail
Obligations, then the amount of Retail Obligations which shall be purchased
on such Closing Date shall be reduced by an amount equal to the lesser of
(x) such defaulting Banks's Purchase Percentage of such Retail Obligations
and (y) such portion of such defaulting Bank's Purchase Percentage as the
other Banks shall not purchase;
(c) the Seller shall not be in default in the observance or
performance of any of the terms or conditions of this Agreement or of the
Long-Term RPA;
(d) the representations and warranties of the Seller set forth
in subsections 5.1 and of the Seller and CFC set forth in Article III of
the Long-Term RPA, shall be true and correct in all material respects on
and as of each Closing Date hereunder;
(e) the Seller shall have delivered to the Agent and to each of
the Banks the favourable written opinion of counsel for the Seller, dated
the relevant Closing Date, substantially in the form of Exhibit E hereto,
and covering such other legal matters as the Agent or its counsel may
reasonably request;
(f) there shall have been delivered to the Agent a certificate
executed by a Responsible Officer of the Seller, dated the relevant Closing
Date, to the effect that all instruments required by applicable legislation
to be registered or filed in order to protect, perfect and preserve the
rights of the Banks in all the Retail Obligations which are being sold by
the Seller to the Banks on such Closing Date have been or will be, within
the time prescribed by the applicable legislation, duly executed by the
required parties thereto and registered and filed in each appropriate
office in each applicable jurisdiction (which certificate shall also have
annexed thereto a schedule setting forth each such instrument and each such
office in which such registrations or filings have been or will be made and
such certificate shall also state that such instruments are the only
instruments required and such offices are the only offices in which
registration or filing is required by applicable legislation in order to
perfect the interest of the Banks in such Retail Obligations against all
creditors of and purchasers from the Seller);
(g) all legal matters incident to the execution and delivery of
this Agreement and to the purchases by the Banks of such Retail Obligations
shall be satisfactory to counsel for the Agent;
(h) the Seller shall have delivered to the Agent and each of the
Banks a certificate signed on behalf of the Seller by any of its
Responsible Officers to the effect that all conditions precedent to the
obligation of the Banks to purchase Retail Obligations on such Closing Date
have been satisfied; and
(i) the Period Losses as determined as of the Settlement Date
next preceding the Settlement Date next preceding such Closing Date, for
the 3 (three) month period immediately preceding the date of determination
shall not have exceeded 5% of the average unpaid balance of the Total
Portfolio during the 3 (three) month period immediately preceding such date
of determination.
ARTICLE VII
THE AGENT AND THE BANKS
7.1 For Benefit of Banks Only. The provisions of this Article
VII relating to the rights and obligations the Agent and the Banks inter se
shall be operative as between the Agent and the Banks only, and the Seller
shall have no rights hereunder or be entitled to rely for any purposes upon
such provisions.
7.2 Status of Agent. The Banks hereby confirm that the Agent
shall act as their administrative agent hereunder on their behalf in
accordance with and pursuant to Article VIII of the Long-Term RPA, and, for
greater certainty but without restricting the generality of the foregoing,
the Banks confirm that the Agent is irrevocably authorized and directed to
do all such things as may be necessary or reasonably incidental to
administering all collections and disbursements hereunder and to make all
such determinations and take all such actions as may be required from time
to time hereunder. Except as expressly modified or supplemented herein,
the Agent's rights, duties and liabilities hereunder shall be governed by
Article VIII of the Long-Term RPA in its entirety, including without
limitation all such provisions thereof relating to delegation of duties,
exculpation, reliance by the Agent, notice of default, non-reliance on the
Agent, and indemnification.
7.3 Purchase and Sale.
(a) Agreements to Purchase and Sell. Subject to the terms and
conditions set forth in this Agreement and in the Long-Term RPA, each Bank
hereby severally confirms and agrees with the Agent that on each Closing
Date it will purchase, with the Agent acting as intermediary as provided
herein, an undivided ownership interest in the Retail Obligations purchased
on such date equal to such Bank's Purchase Percentage of such Retail
Obligations for a portion of the purchase price calculated in accordance
with subsection 7.3(c)(i), and each Bank severally agrees with the Agent to
pay such Bank's respective portion of the Purchase Price on the terms and
conditions provided in this Article VII.
(b) Ownership Percentages. Each Bank's undivided interest in
the Sold Retail Obligations shall be, at any time, equal to such Bank's
Ownership Percentage thereof.
(c) Purchase Price; Adjustments on Account of Exact Amounts Due.
(i) Computation. The portion of the Purchase Price to be
paid by each several Bank for its addition to its
Ownership Interest in each group of Retail Obligations
purchased hereunder shall be an amount equal to such
Bank's Purchase Percentage of the Retail Paid
Percentage of the Estimated Retail Amount Due required
to be paid by the Agent to the Seller under this
Agreement on the Closing Date on which such Retail
Obligations are sold, plus or minus the amount of any
subsequent adjustment required by this subsection
7.3(c)(i) and subsections 7.6 and 7.7.
(ii) Effect of Purchase. Immediately upon the purchase, as
aforesaid, by a Bank of an addition to its Ownership
Interest, such Bank's Ownership Interest shall increase
by an amount equal to the purchase price paid by such
Bank for such addition on such date.
(iii) Remittances - Estimated Amounts. Promptly after
receipt by the Agent of notice from the Seller
designating a Closing Date, the Agent shall notify
each Bank thereof, and:
(A) promptly after receipt by the Agent of the
Seller's advice as to the Estimated Weighted
Average Life and the Estimated Fixed Rate Purchase
Proceeds, the Agent shall give notice to each Bank
of such estimates as well as the Estimated Fixed
Rate substantially in the form of Exhibit E
hereto;
(B) each Bank will promptly give notice to the Agent
of its Bank's BA/CDOR Spread and its Bank's
Reserve Adjustment by 10:30 a.m. (Toronto time) on
the Fixed Rate Determination Date substantially in
the form of Exhibit F-1 hereto, whereupon the
Agent will by 11:00 a.m. (Toronto time) calculate
and advise the Seller of the Fixed Rate by notice
substantially in the form of Exhibit F-2 hereto;
(C) promptly after receipt by the Agent on a Fixed
Rate Determination Date of the Seller's advice as
to the Weighted Average Life of the Retail
Obligations to be purchased by the Banks on the
Closing Date as well as the Retail Paid Percentage
of the Estimated Retail Amount Due upon the Retail
Obligations to be purchased, the Agent will give
notice to each Bank thereof as well as the amount
of such Bank's Purchase Percentage of the Retail
Paid Percentage of the Estimated Retail Amount Due
upon such Retail Obligations substantially in the
form of Exhibit G hereto; and
(D) the Bank will remit payment of its Purchase
Percentage of the Retail Paid Percentage of the
Estimated Retail Amount Due upon such Retail
Obligations to the Agent for receipt by the Agent
not later than 12:00 noon (Toronto time) on such
Closing Date.
(iv) Remittances - Exact Amounts. Promptly after receipt by
the Agent from the Seller of the statement of the Exact
Retail Amount Due upon the Retail Obligations purchased
by the Banks on any Closing Date, the Agent will advise
each Bank by giving notice substantially in the form of
Exhibit H hereto of:
(A) the amount of any payment to be made by the Agent
to the Seller under subsection 2.4(a) as an
adjustment (to reflect correction of estimates) of
the Estimated Retail Amount Due upon such Retail
Obligations; and
(B) the amount of such Bank's share of such payment
calculated on a pro rata basis according to such
Bank's Purchase Percentage of such Retail
Obligations.
Each Bank shall remit to the Agent, for receipt by the
Agent not later than 12:00 noon (Toronto time) on the
next Business Day following delivery of such advice to
such Bank, the amount of such Bank's share of such
payment. If the Exact Retail Amount Due upon the
Retail Obligations purchased by the Banks on any
Closing Date is less than the Estimated Retail Amount
Due upon such Retail Obligations, then upon receipt by
the Agent of the payment by the Seller to be made
pursuant to subsection 2.4(a), the Agent will promptly
remit the proceeds thereof to the Banks pro rata
according to their respective Purchase Percentages of
such Retail Obligations.
(d) Confirmation of Ownership Interests. Promptly after each
Settlement Date if there remains outstanding any Sold Retail Obligation,
the Agent will send to each Bank a written confirmation of such Bank's
Ownership Interest in the Sold Retail Obligations as of such Settlement
Date. The Agent shall hold this Agreement, all Sold Retail Obligations and
all funds on deposit in the Application Account (until paid to the Banks in
accordance with the terms hereof) for the benefit of the Banks in
accordance with the provisions and intent of this Agreement until the
Ownership Interests of the Banks have been reduced to zero and their
commitment to purchase has been terminated.
7.4 Maximum Amounts of Purchases. Notwithstanding anything
contained in this Agreement to the contrary, no Bank shall be required to
purchase an addition to its Ownership Interest, whether under subsections
7.3(a) or 7.3(c), such that after giving effect thereto (whether based upon
estimated or exact statements of the amount due) the amount of such Bank's
Ownership Interest would exceed the difference between (A) the Bank's
Commitment Amount and (B) the Bank's Purchase Percentage of the Long-Term
Wholesale Aggregate Invested Amount.
7.5 Sharing of Earned Discounts: Each Bank's pro rata share of
the aggregate amount of the discounts deducted by the Agent in computing
the purchase price of the Retail Obligations purchased under this Agreement
which shall have been earned by such Bank shall be calculated on the basis
that such Bank's annual rate of return (computed on a monthly basis) on its
investment calculated with respect to each Sold Retail Obligation shall be
equal to the Applicable Yield for such Sold Retail Obligation calculated as
if references to the "Blended BA/CDOR Spread" and "Blended Reserve
Adjustment" in the definition of "Fixed Rate" were references to the
related "Bank's BA/CDOR Spread" and "Bank's Reserve Adjustment" for such
Bank.
7.6 Distributions to Banks of Payments Received by Agent.
(a) Collections: All payments received by the Agent from the
Seller or otherwise on account of collection of amounts owing or payable on
or in respect of Sold Retail Obligations, or on account of the adjustments
required pursuant to Article IV with respect to such Sold Retail
Obligations, and any interest and other payments relating to such Sold
Retail Obligations which are received by the Agent from the Seller and
which are to be shared by all the Banks according to the provisions and
intent of this Agreement (other than the payments referred to below in
subsections 7.6(b), (c) and (d)), will be promptly remitted by the Agent to
the Banks (i) firstly, to the extent of the aggregate amount of the
discounts deducted by the Agent in computing the purchase price of all Sold
Retail Obligations which shall have been earned and not yet remitted
hereunder, pro rata according to their respective shares of the earned
discount calculated in accordance with subsection 7.5; and (ii) secondly,
to the extent of the balance, pro rata according to their respective
Purchase Percentages.
(b) All payments received by the Agent on account of the
commitment fee required pursuant to the Long-Term RPA shall be promptly
remitted by the Agent to the Banks pro rata according to their respective
Purchase Percentages.
(c) All payments received by the Agent on account of the
Facility Fees and Utilization Fees required by the Long-Term RPA and on
account of the reimbursement by the Seller for the costs, expenses, claims
and liabilities of the Agent shall be retained by the Agent for its own
account.
(d) All payments received by the Agent for the account of any
Bank pursuant to Article IX of the Long-Term RPA shall be promptly
remitted by the Agent to such Bank.
7.7 Further Payments on Account of Deferred Payment Excesses and
Timing Adjustments. Promptly after receipt by the Agent of each Settlement
Statement applicable to Sold Retail Obligations purchased by the Banks on
any Closing Date, the Agent will advise each Bank of (i) the amount of any
payment to be made by the Agent to the Seller on the relevant Settlement
Date pursuant to subsection 4.2(c)(vi) out of the Retail Deferred Payment
Excess applicable to any Sold Retail Obligations, and (ii) the amount of
such Bank's share of any such payments calculated on a pro rata basis
according to such Bank's Purchase Percentage. Each Bank shall remit to the
Agent, for receipt by the Agent not later than 2:00 p.m. (Toronto time) on
such Settlement Date, the amount of such Bank's share of any such payments.
7.8 Mechanics of Payments
(a) Payments by Banks. All payments to be remitted hereunder by
the Banks to the Agent shall be paid by the Banks to the credit of an
account maintained by the Agent at its branch located at Royal Bank Plaza,
200 Bay Street, Toronto, Ontario entitled "Chrysler Credit Canada Ltd.
Banks' Remittance Account".
(b) Payments by the Agent. All payments to be remitted
hereunder by the Agent to the Banks shall be promptly remitted by the Agent
to them at their respective offices in Toronto after receipt from the
Seller, and in any event any payments received by the Agent from the Seller
by 2:00 p.m. (Toronto time) on any day will be remitted to the Banks by
4:00 p.m. (Toronto time) on the same day.
7.9 Actions by Agent.
(a) Exercise of Rights.
(i) The Agent shall have the right but shall be under no
obligation: (A) to exercise any of the rights and powers which it has or
may have under or in respect of this Agreement or any Sold Retail
Obligation or any related document or instrument, (B) to take any actions
or proceedings to enforce any of the obligations or liabilities of the
Seller or CFC under or in respect of this Agreement or of the obligor or
any other person under or in respect of any Sold Retail Obligation or any
related document or instrument, or (C) to take any actions or proceedings
to realize upon or enforce the security or any of the other rights
constituted by any Sold Retail Obligation or any related document or
instrument. The Agent will advise the other Banks of any material actions
taken or proposed to be taken by it under this Agreement.
(ii) Notwithstanding the foregoing subsection 7.9(a)(i), the
Agent will exercise any such rights or powers or take any such actions or
proceedings when expressly requested in writing to do so by Banks having a
then aggregate Ownership Percentage of more than 50%, or if there are no
Sold Retail Obligations, by Banks having a then aggregate Purchase
Percentage of more than 50%, following a meeting to which all Banks have
been invited on not less than two Business Days' notice to discuss the
proposed request; provided, however, that (A) the Agent shall under no
circumstances be under any obligation to take over itself the
administration, servicing and collection of any of the Sold Retail
Obligations pursuant to subsection 3.2(f) of this Agreement, and (B) any
decision to deliver a Daily Remittance Notice to the Seller in accordance
with subsection 3.1(c) of this Agreement or to take over the
administration, servicing and collection of any of the Sold Retail
Obligations pursuant to subsection 3.2(f) of this Agreement may only be
taken upon the written request of the Required Banks.
(b) Complete Servicing Transfer. If the administration,
servicing and collection of the Sold Retail Obligations is taken over by
the Agent or by one of the other Banks as the Agent's designee pursuant to
subsection 3.2(f) of this Agreement, then the Agent or such other Bank
shall be reimbursed its costs and expenses in connection with such
administration, servicing and collection on a basis to be agreed upon by
all the Banks at that time. If such administration, servicing and
collection is taken over by a third party selected by the Banks, then the
costs and expenses of such third party will be paid severally by all the
Banks pro rata according to their respective Ownership Percentages at the
time when such costs or expenses were incurred or accrued. This subsection
7.9(b) shall survive the termination of this Agreement.
(c) Recovery From Seller or CFC. Any amounts paid by the Banks
to the Agent under subsection 7.9(b) hereof which are subsequently
recovered by the Agent from the Seller or CFC will be repaid by the Agent
to the Banks.
7.10 Non-Performance by Bank.
(a) Consequences of Default. In the event any Bank (in this
section 7.10 the "Defaulting Bank") shall fail to perform any obligation
to be performed by it hereunder, the Agent may terminate, and thereby
acquire, or place with other parties, the entire Ownership Interest of such
Defaulting Bank in the Sold Retail Obligations (whereupon such Defaulting
Bank shall cease to have an interest in such Sold Retail Obligations)
without, however, relieving such Defaulting Bank from any liability for
damages, costs and expenses suffered by the Agent or any other Bank as a
result of such failure on the part of such Defaulting Bank. For the
purposes of any distributions to Banks of the amounts referred to in
subsection 7.6(a) pursuant to clause (ii) of subsection 7.6(a), the
Purchase Percentage of any Defaulting Bank shall be adjusted appropriately
to reflect such Defaulting Bank's remaining Ownership Interest. For the
purposes of any distributions to Banks of the amounts referred to in
subsections 7.6(a) or 7.6(b), the Purchase Percentage of any Defaulting
Bank shall be deemed to be nil from and after the time of default.
(b) Purchase of Defaulting Bank's Interest. Without limiting
the foregoing, in the event that the Defaulting Bank shall fail to remit to
the Agent on any Closing Date such Bank's portion of the Retail Paid
Percentage of the Estimated Retail Amount Due on such date, then each other
Bank whose Maximum Commitment is not then fully utilized (after giving
effect to any purchase on such date other than the purchase described in
this subsection 7.10) agrees to purchase, in an amount not exceeding the
such Bank's Available Commitment, such Defaulting Bank's addition to its
Ownership Interest in the Sold Retail Obligation to be purchased on such
date and shall pay to the Agent, as the purchase price therefor, an amount
determined for each Bank (other than the Defaulting Bank) by multiplying
(i) the lesser of (A) such Defaulting Bank's portion of the Paid Percentage
of the Estimated Retail Amount Due on such date or (B) the sum of each
Bank's Available Commitment (other than the Defaulting Bank) times (ii) the
then percentage equivalent of a fraction the numerator of which is such
Bank's Available Commitment and the denominator of which is the sum of each
Bank's Available Commitment (other than the Defaulting Bank). Any
additional interest purchased by a Bank pursuant to this subsection 7.10
shall be deemed a part of such Bank's investment for purposes of the
definition of "Ownership Interest" as of the date of such purchase. The
purchase of an additional interest pursuant to this subsection 7.10 shall
not relieve the Defaulting Bank from any liability for damages, costs and
expenses suffered by the Seller, the Agent or any other Bank as a result of
such failure on the part of such Defaulting Bank.
(c) Liability of Banks to Agent. Each Bank hereby expressly
acknowledges that it shall be liable for any damages, costs or expenses
suffered by the Seller, the Agent or any other Bank as a result of any
failure to remit to the Agent on any Closing Date its portion of the Retail
Paid Percentage of the Estimated Retail Amount Due including, without
limitation, in the case of the Seller, all damages suffered as a result of
any failure of the Agent to purchase any Retail Obligations pursuant to
subsection 2.1.
7.11 Information. The Agent will forward or make available, as
it deems appropriate, to each Bank copies of
(a) each Settlement Statement received by the Agent from the
Seller; and
(b) all other documents or information so received and
considered pertinent by the Agent or reasonably requested by
the Bank.
ARTICLE VIII
MISCELLANEOUS
8.1 Long-Term RPA. This Agreement shall be subject in all
respects to the Long-Term RPA. In case of any conflict between the
provisions of the Long-Term RPA and this Agreement, the provisions of the
Long-Term RPA shall prevail.
8.2 Further Assurances. The Seller agrees that it will, at any
time and from time to time, do and perform any and all acts and execute any
and all further instruments required or reasonably requested by the Agent
to effect more fully the purposes of this Agreement and the sales of the
Retail Obligations hereunder, including without limitation, the execution
of any financing statements, financing change statements, affidavits,
notices or assignments relating to such Retail Obligations for filing under
the provisions of the legislation of any applicable jurisdiction.
8.3 Payments. Each payment to be made by the Seller or a Bank
hereunder shall be made by 2:00 p.m. (Toronto time) on the required payment
date and each payment to be made by the Agent hereunder shall be made by
2:00 p.m. (Toronto time) on the required payment date. Any such payments
shall be made in lawful money of Canada and each payment to be made by the
Seller or a Bank hereunder shall be made at the office of the Agent set
forth above without set-off or counterclaim and, with respect to any daily
collections required to be made hereunder, shall be deposited in the
Application Account pursuant to subsection 3.1.
8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario.
8.5 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
8.6 Amendments. This Agreement may not be modified, amended,
waived, supplemented or terminated except in accordance with the Long-Term
RPA.
8.7 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of (i) such provision in
any other jurisdiction or (ii) any other provision hereof in such or any
other jurisdiction.
8.8 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing delivered by
certified or registered mail, by hand, by courier, or by telecopy or telex,
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, certified or registered
mail, or by courier, in the case of telecopy notice, when received, or, in
the case of telex notice, when sent, answerback received, addressed to the
parties as set forth in the signature pages hereto, or to such other
address as may be hereafter notified by the respective parties hereto and
any Person that may hereafter become a Bank, provided that any notice,
request or demand to or upon the Agent or the Banks pursuant to subsection
2.3(b)(ii) shall not be effective until received.
8.9 Successors and Assigns. This Agreement shall be binding
upon the parties hereto and shall enure to the benefit of the Seller, the
Agent, the Banks and their respective successors and assigns except that
the Seller may not assign or transfer any of its rights under this
Agreement without the prior written consent of the Required Banks.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P,Corp.Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir. Auto. Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-2009
Telex: 06-524712
BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P, Corp.&Invst. Bnkg. Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259 Title: Vice President
Telecopier: 416-594-2266
Telex: 06-218241
CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: Vice President
Toronto, Ontario
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
SWISS BANK CORPORATION (CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Associate Dir. Mrch. Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Mrch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
Exhibit 10-O
CONFORMED COPY
______________________________________________________________________________
______________________________________________________________________________
CHRYSLER CREDIT CANADA LTD.
Seller and Servicer
and
ROYAL BANK OF CANADA
Agent
and
THE SEVERAL BANKS PARTIES HERETO
Certificateholders
and
THE ROYAL TRUST COMPANY
Custodian
_____________________________
BANK SERIES 1994-1 SUPPLEMENT
Dated as of May 23, 1994
to
MASTER CUSTODIAL AND SERVICING AGREEMENT
Dated as of September 1, 1992
_____________________________
BANK SERIES 1994-1
_____________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Creation of the Bank Series 1994-1
Master Custodial Certificates, Series 1994-1
SECTION 1.1. Designation . . . . . . . . . . . . . . . . . . . . .- 1 -
ARTICLE II
Interpretation
SECTION 2.1. Definitions. . . . . . . . . . . . . . . . . . . . . .- 2 -
SECTION 2.2. Other Interpretive Provisions. . . . . . . . . . . . .- 19 -
ARTICLE III
The Bank Series 1994-1 Certificates
SECTION 3.1. Purchases of the Bank Series 1994-1 Certificates . . .- 20 -
SECTION 3.2. Procedure for Increasing the Invested Amount . . . . .- 21 -
SECTION 3.3. Procedure for Decreasing the Aggregate Bank Series
1994-1 Invested Amount . . . . . . . . . . . . . . . .- 23 -
SECTION 3.4. Yield. . . . . . . . . . . . . . . . . . . . . . . . .- 23 -
SECTION 3.5. Changes in Available Subordinated Amount . . . . . . .- 24 -
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation . . . . . . . . . . . . . . . .- 24 -
ARTICLE V
Rights of Bank Series 1994-1 Certificateholders and Allocation and
Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections. . .- 25 -
SECTION 5.2. Yield. . . . . . . . . . . . . . . . . . . . . . . . .- 27 -
SECTION 5.3. Determination of Monthly Principal . . . . . . . . . .- 30 -
SECTION 5.4. Establishment of Reserve Fund. . . . . . . . . . . . .- 30 -
SECTION 5.5. Deficiency Amount. . . . . . . . . . . . . . . . . . .- 32 -
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller's Non-Principal Collections,
Investment Proceeds and Available Bank Principal
Collections. . . . . . . . . . . . . . . . . . . . . .- 33 -
SECTION 5.7. Distributions to Bank Series 1994-1
Certificateholders . . . . . . . . . . . . . . . . . .- 34 -
SECTION 5.8. Application of Reserve Fund and Available
Subordinated Amount. . . . . . . . . . . . . . . . . .- 34 -
SECTION 5.9. Bank Charge-Offs . . . . . . . . . . . . . . . . . . .- 36 -
SECTION 5.10. Excess Income. . . . . . . . . . . . . . . . . . . . .- 36 -
SECTION 5.11. Excess Principal Collections.. . . . . . . . . . . . .- 36 -
SECTION 5.12. Allocations and Applications of Collections and
Other Funds. . . . . . . . . . . . . . . . . . . . . .- 37 -
ARTICLE VI
Distributions and Reports
to Bank Series 1994-1 Certificateholders
SECTION 6.1. Distributions. . . . . . . . . . . . . . . . . . . . .- 37 -
SECTION 6.2. Daily Reports. . . . . . . . . . . . . . . . . . . . .- 38 -
SECTION 6.3. Periodic Reports.. . . . . . . . . . . . . . . . . . .- 38 -
(a) Distribution Date Statements. . . . . . . . . . . . . . . .- 38 -
(b) Monthly Certificateholders' Statement.. . . . . . . . . . .- 39 -
(c) Bank Series 1994-1 Early Amortization Period Notices. . . .- 39 -
(d) Annual Tax Statement. . . . . . . . . . . . . . . . . . . .- 39 -
(e) Tax Information.. . . . . . . . . . . . . . . . . . . . . .- 39 -
ARTICLE VII
Amortization Events
SECTION 7.1. Additional Amortization Events . . . . . . . . . . . .- 40 -
SECTION 7.2. Notice of Bank Series 1994-1 Early Amortization
Event. . . . . . . . . . . . . . . . . . . . . . . . .- 40 -
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.1. Representations and Warranties of the Seller and
the Servicer . . . . . . . . . . . . . . . . . . . . .- 41 -
SECTION 8.2. Covenants of the Seller and CCCL . . . . . . . . . . .- 41 -
SECTION 8.3. Covenants of the Servicer. . . . . . . . . . . . . . .- 42 -
ARTICLE IX
Final Distributions
SECTION 9.1. Sale of Bank Series 1994-1 Certificateholders'
Interest Pursuant to Section 2.03 of the
Agreement; Distributions Pursuant to Section 9.1
of this Bank Series 1994-1 Supplement or
Section 2.03 or 12.02(c) of the Agreement . . . . . .- 43 -
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Ratification of Agreement. . . . . . . . . . . . . . .- 43 -
SECTION 10.2. Counterparts . . . . . . . . . . . . . . . . . . . . .- 43 -
SECTION 10.3. Governing Law. . . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 10.4. Notices. . . . . . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 10.5. Successors and Assigns . . . . . . . . . . . . . . . .- 44 -
SECTION 10.6. Rights of Bank Series 1994-1 Certificateholders. . . .- 44 -
SECTION 10.7. Custodian's Communications.. . . . . . . . . . . . . .- 44 -
SECTION 10.8. Amendments.. . . . . . . . . . . . . . . . . . . . . .- 44 -
ARTICLE XI
Conditions Precedent
SECTION 11.1. Conditions Precedent to Effectiveness of Supplement. .- 45 -
(a) Documents.. . . . . . . . . . . . . . . . . . . . . . . . .- 45 -
(b) Legal Opinions. . . . . . . . . . . . . . . . . . . . . . .- 45 -
(c) Bank Series 1994-1 Early Amortization Events. . . . . . . .- 45 -
(d) Conditions to Issuance of Bank Series 1994-1
Certificates. . . . . . . . . . . . . . . . . . . . . . . .- 45 -
(e) Long-Term RPA Conditions. . . . . . . . . . . . . . . . . .- 45 -
SCHEDULE 1 RESERVE FUND. . . . . . . . . . . . . . . . . . . . . - 52 -
EXHIBIT "A" BANK SERIES 1994-1 CERTIFICATES . . . . . . . . . . . - 53 -
EXHIBIT "B" DAILY REPORT. . . . . . . . . . . . . . . . . . . . . - 54 -
EXHIBIT "C" DISTRIBUTION DATE STATEMENT . . . . . . . . . . . . . - 55 -
EXHIBIT "D-1" MONTHLY CERTIFICATEHOLDERS' STATEMENT
(DURING REVOLVING PERIOD) . . . . . . . . . . . . . . - 56 -
EXHIBIT "D-2" MONTHLY CERTIFICATEHOLDERS' STATEMENT
(DURING BANK SERIES 1994-1 EARLY AMORTIZATION PERIOD).- 57 -
EXHIBIT "E" OPINION OF COUNSEL TO SELLER ON INCREASE DATE . . . . - 58 -
<PAGE>
BANK SERIES 1994-1 SUPPLEMENT dated as of May 23, 1994
(the "Bank Series 1994-1 Supplement"), between CHRYSLER
CREDIT CANADA LTD., a Canadian corporation, as Seller and
Servicer, THE ROYAL TRUST COMPANY, a trust company existing
under the laws of Canada, as Custodian, the several banks
parties to this Bank Series 1994-1 Supplement and such other
Chartered Banks as may from time to time become parties
hereto (collectively the "Bank Series 1994-1 Certificate-
holders" and individually a "Bank Series 1994-1 Certificate-
holder") and Royal Bank of Canada, a Canadian chartered
bank, as agent for the Bank Series 1994-1 Certificateholders
(the "Agent").
Pursuant to Section 6.03 of the Master Custodial and Servicing
Agreement dated as of September 1, 1992 (the "Agreement"), among the
Seller, the Servicer and the Custodian, the Custodian may from time to time
issue one or more new Series of Investor Master Custodial Certificates
evidencing the undivided ownership interests in the Purchased Property
acquired by the Custodian as agent for and on behalf of the Holders of such
new Series of Investor Master Custodial Certificates. Pursuant to this
Bank Series 1994-1 Supplement, the Custodian shall create a new Series of
Investor Master Custodial Certificates and specify the Principal Terms
thereof.
In consideration of the payment by the Bank Series 1994-1
Certificateholders to the Custodian of the consideration in respect of the
Bank Series 1994-1 Investor Master Custodial Certificates and the purchase
from time to time of the undivided ownership interests in the Purchased
Property evidenced thereby, and the mutual agreements herein contained,
each party agrees as follows:
ARTICLE I
Creation of the Bank Series 1994-1
Master Custodial Certificates, Series 1994-1
SECTION 1.1. Designation.
(a) There is hereby created a Series of Investor Master
Custodial Certificates to be issued pursuant to the Agreement and this Bank
Series 1994-1 Supplement to be known as the "Master Custodial Certificates,
Bank Series 1994-1" (the "Bank Series 1994-1 Certificates").
(b) In the event that any term or provision contained herein
shall conflict with or be inconsistent with any terms or provisions
contained in the Agreement, the terms and provisions of this Bank Series
1994-1 Supplement shall govern.
(c) All capitalized terms not otherwise defined herein are
defined in the Agreement. All Article, Section or subsection references
herein shall mean Articles, Sections or subsections of this Bank Series
1994-1 Supplement, except as otherwise provided herein. The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Bank Series 1994-1 Supplement shall refer to this Bank Series 1994-1
Supplement as a whole and not to any particular provision hereof; and the
term "including" means "including without limitation".
ARTICLE II
Interpretation
SECTION 2.1. Definitions. Whenever used in this Bank Series
1994-1 Supplement the following words and phrases shall have the following
meanings. The following definitions 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.
(a) "Additional Yield" shall have the meaning specified in Section
5.2(b).
(b) "Agent" shall have the meaning specified in the preamble to this
Bank Series 1994-1 Supplement.
(c) "Aggregate Bank Series 1994-1 Invested Amount" (which for the
purposes of the Agreement is the Invested Amount with respect to the Bank
Series 1994-1) shall mean, as of any date, the sum of the Bank Invested
Amounts of all Bank Series 1994-1 Certificateholders on such date.
(d) "Agreement" shall have the meaning specified in the preamble to
this Bank Series 1994-1 Supplement.
(e) "Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of
(i) the Bank Series 1994-1 Allocation Percentage with respect to
such Collection Period and
(ii) the Defaulted Amount with respect to such Collection Period.
(f) "Allocable Miscellaneous Payments" shall mean, with respect to
any Distribution Date, the product of
(i) the Bank Series 1994-1 Allocation Percentage for the related
Collection Period and
(ii) Miscellaneous Payments with respect to the related
Collection Period.
(g) "Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of
(i) the Bank Series 1994-1 Allocation Percentage for the related
Collection Period and
(ii) the aggregate amount of Collections of Non-Principal
Receivables relating to such Deposit Date.
(h) "Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of
(i) the Bank Series 1994-1 Allocation Percentage for the related
Collection Period and
(ii) the aggregate amount of Collections of Principal Receivables
relating to such Deposit Date.
(i) "Available Bank Principal Collections" shall mean, with respect
to any Distribution Date, the sum of
(i) an amount equal to Bank Principal Collections for such
Distribution Date,
(ii) Allocable Miscellaneous Payments with respect to such
Distribution Date,
(iii) Bank Series 1994-1 Excess Principal Collections on deposit
in the Collection Account for such Distribution Date and
(iv) for a Distribution Date which is also the Termination Date,
any funds in the Reserve Fund after giving effect to
Section 5.8 of this Bank Series 1994-1 Supplement.
(j) "Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of
(i) the Available Seller's Non-Principal Collections for such
Deposit Date and
(ii) the Available Seller's Principal Collections for such
Deposit Date.
(k) "Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying
(i) the excess of
(A) the Seller's Percentage for the related Collection
Period
over
(B) the Excess Seller's Percentage for such Collection
Period
by
(ii) Allocable Non-Principal Collections for such Deposit Date.
(l) "Available Seller's Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying
(i) the excess of
(A) the Seller's Percentage for the related Collection
Period
over
(B) the Excess Seller's Percentage for such Collection
Period
by
(ii) Allocable Principal Collections for such Deposit Date.
(m) "Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Required Subordinated Amount. The
Available Subordinated Amount for any subsequent Determination Date shall
mean an amount equal to
(i) the Available Subordinated Amount for the preceding
Determination Date,
minus
(ii) the Incremental Subordinated Amount for such preceding
Determination Date,
minus
(iii) the Required Subordination Draw Amount with respect to the
preceding Distribution Date to the extent provided in
Section 5.8,
minus
(iv) withdrawals from the Reserve Fund pursuant to Section 5.8 on
the preceding Distribution Date to make distributions
pursuant to Section 5.6(a)(iii) (but excluding any other
withdrawals from the Reserve Fund),
plus
(v) the portion of Excess Income for such preceding Distribution
Date distributed to the Seller pursuant to Section 5.10(c),
plus
(vi) the Incremental Subordination Amount for the current
Determination Date;
plus
(vii) the amount of any increase in the Available Subordinated
Amount pursuant to Section 3.5 effected in the period from
the immediately preceding Determination Date to and
including the current Determination Date, and
minus
(viii) the amount of any decrease in the Available Subordinated
Amount pursuant to Section 3.3 effected on the immediately
preceding Distribution Date;
provided that
(A) the Available Subordinated Amount may be increased on
any Determination Date by the Seller, in its sole
discretion, by notice to the Custodian and the Agent,
on or before any such Determination Date; and
(B) provided, that, on any date, the Available Subordinated
Amount shall not exceed an amount equal to the sum of
(ix) the product of the Subordinated Percentage and the Aggregate
Bank Series 1994-1 Invested Amount on such date (after
giving effect to any reduction to be made therein on the
immediately following Distribution Date; and
(x) the Incremental Subordinated Amount, if any, with respect to
the preceding Determination Date;
provided, however, that once any Bank Series 1994-1 Early Amortization
Period (other than a Bank Series 1994-1 Early Amortization Period which has
ended as described in clause (c) of the definition of Bank Series 1994-1
Early Amortization Period) shall have commenced, the Available Subordinated
Amount shall be calculated based on the Aggregate Bank Series 1994-1
Invested Amount as of the close of business on the day preceding the
commencement of such Bank Series 1994-1 Early Amortization Period.
(n) "BA Tranche" shall mean the portion of the Aggregate Bank Series
1994-1 Invested Amount the rate of return on which the Seller has elected
to have based on one or more Wholesale Bankers' Acceptance Rates in
accordance with the procedure specified herein.
(o) "Bank Charge-Offs" shall have the meaning specified in Section 5.9.
(p) "Bank Defaulted Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of
(i) the Allocable Defaulted Amount for the related Collection
Period and
(ii) the Floating Allocation Percentage for the related
Collection Period.
(q) "Bank Invested Amount" shall mean, when used with respect to any
Bank Series Certificateholder and as of any date, an amount equal to
(i) its Purchase Percentage of the Initial Aggregate Bank Series
1994-1 Invested Amount,
plus
(ii) its Purchase Percentage of the aggregate amount of Increases
made pursuant to Section 3.2 of this Bank Series 1994-1
Supplement since the Effective Date to and including such
first mentioned date,
minus
(iii) the aggregate amount of distributions to such Bank Series
1994-1 Certificateholder pursuant to Sections 5.6(b) or
5.6(c) since the Effective Date to and including such first
mentioned date,
minus
(iv) the product of
(A) such Bank Series 1994-1 Certificateholder's Purchase
Percentage and
(B) the excess, if any, of the aggregate amount of Bank
Charge-Offs over the aggregate amount of Bank Charge-
Offs reimbursed pursuant to Section 5.9 on or before
such date.
(r) "Bank Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of
(i) the Floating Allocation Percentage for the related
Collection Period and
(ii) Allocable Non-Principal Collections deposited in the
Collection Account for the related Collection Period.
(s) "Bank Principal Collections" shall mean, with respect to any
Distribution Date, the sum of
(i) the product of
(A) the Floating Allocation Percentage, with respect to the
Revolving Period, or the Principal Allocation
Percentage, with respect to a Bank Series 1994-1 Early
Amortization Period, for the related Collection Period
(or any partial Collection Period which occurs as the
first Collection Period during a Bank Series 1994-
1 Early Amortization Period) and
(B) Allocable Principal Collections deposited in the
Collection Account for the related Collection Period
(or any partial Collection Period which occurs as the
first Collection Period during an Bank Series 1994-1
Early Amortization Period) and
(ii) the amount, if any, of Collections of Non-Principal
Receivables, Excess Income and Available Seller's
Collections which this Bank Series 1994-1 Supplement
provides are to be treated as a portion of Bank Principal
Collections, including pursuant to Section 5.6(a)(iii),
5.8(b) and 5.10(a), on such Distribution Date.
(t) "Bank Series 1994-1" shall mean the Series of Investor Master
Custodial Certificates the terms of which are specified in this Bank Series
1994-1 Supplement.
(u) "Bank Series 1994-1 Adjusted Invested Amount" shall mean the
Series Adjusted Invested Amount with respect to the Bank Series 1994-1.
(v) "Bank Series 1994-1 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to the Bank Series 1994-1.
(w) "Bank Series 1994-1 Certificate Rate" shall mean, with respect to
any Yield Period, the Blended Wholesale Rate with respect to such Yield
Period.
(x) "Bank Series 1994-1 Certificateholders" shall mean the Holders of
the Bank Series 1994-1 Certificates.
(y) "Bank Series 1994-1 Certificateholders' Interest" shall mean that
portion of the Master Custodial Certificateholders' Interest evidenced by
the Bank Series 1994-1 Certificates.
(z) "Bank Series 1994-1 Certificates" shall mean any one of the
Master Custodial Certificates, Series 1994-1, executed and authenticated by
the Custodian, substantially in the form of Exhibit A.
(aa) "Bank Series 1994-1 Early Amortization Event" shall mean any
Early Amortization Event specified in Section 9.01 of the Agreement,
together with any additional Early Amortization Event specified in
Section 7.1 of this Bank Series 1994-1 Supplement.
(ab) "Bank Series 1994-1 Early Amortization Period" shall mean an
Early Amortization Period with respect to the Bank Series 1994-1.
(ac) "Bank Series 1994-1 Excess Principal Collections" shall have the
meaning specified in Section 5.11(b).
(ad) "Bank Series 1994-1 Monthly Servicing Fee" shall have the meaning
specified in Section 4.1.
(ae) "Bank Series 1994-1 Principal Shortfall" shall have the meaning
specified in Section 5.11(b).
(af) "Bank Series 1994-1 Supplement" shall mean this Bank Series 1994-1
Supplement as amended, modified or supplemented from time to time.
(ag) "Bank Series 1994-1 Termination Proceeds" shall mean any
Termination Proceeds arising out of a sale of Receivables (or interests
therein) pursuant to Section 12.02(c) of the Agreement with respect to the
Bank Series 1994-1.
(ah) "Blended Wholesale Rate" shall mean, with respect to any Yield
Period, the rate per annum which is the sum of:
(i) the product obtained by multiplying the Wholesale Prime Rate with
respect to such Yield Period by the decimal equivalent of the
fraction of the Aggregate Bank Series 1994-1 Invested Amount not
allocated to the BA Tranche for such Yield Period, and
(ii) an amount equal to the sum of
(x) the sum of the products obtained by multiplying the
Wholesale Bankers' Acceptance Rate for each particular
specified term (the "Specified Wholesale Bankers' Acceptance
Rate") by a fraction the numerator of which is that portion
of the Aggregate Bank Series 1994-1 Invested Amount
allocated to each such Specified Wholesale Bankers'
Acceptance Rate within the BA Tranche in respect of such
Yield Period and the denominator of which is the Aggregate
Bank Series 1994-1 Invested Amount, and
(y) the positive difference between 0.625% and the Long-Term
Facility Fee Percentage (which difference is 0.4375%).
(ai) "CDOR Rate" means, on any date, the annual rate of interest which
is the rate based on an average 30 day rate applicable to Canadian Dollar
bankers' acceptances appearing on the "Reuters Screen CDOR Page" (as
defined in the International Swap Dealer Association, Inc. definitions, as
modified and amended from time to time) as of 10:00 a.m. Toronto time on
such day, or if such day is not a Business Day then on the immediately
preceding Business Day; provided, however, if such rates do not appear on
the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any day
shall be calculated as the arithmetic mean of the 30 day rates applicable
to Canadian Dollar bankers' acceptances quoted by four major Canadian
Schedule I chartered banks as of 10:00 am. on such day, or if such day is
not a Business Day, then on the immediately preceding Business Day.
Initially, the four major Canadian Schedule I chartered banks will be Bank
of Montreal, The Bank of Nova Scotia, Royal Bank of Canada and Canadian
Imperial Bank of Commerce. If less than four of the institutions described
in the immediately preceding sentence quote the afore-mentioned rate on the
days and at the times described above, the "CDOR Rate" shall be such other
rate or rates as the parties may agree.
(aj) "Certificateholder's Banker's Acceptance Rate" based on discount
bankers' acceptances shall mean the rate per annum from time to time
notified by the Certificateholder to the Agent and the Seller as being the
sum of
(i) the rate per annum then in effect for determining discounts
on such Canadian dollar bankers' acceptances accepted by the
Certificateholder in Canada and held for its own account
(such rates to be exclusive of any reserve costs) plus, if
applicable,
(ii) a percentage, expressed as a decimal, established by the
Certificateholder at such time, such percentage not to
exceed the percentage which represents the effective cost to
the Certificateholder of the aggregate of all primary,
secondary and other reserve requirements which are
applicable to Canadian dollar deposits accepted by such
Certificateholder in Canada for a term approximating the
maturity period for such bankers' acceptances and which are
in effect at such time.
(ak) "Chartered Bank" means a bank named on Schedule I or Schedule II
to the Bank Act (Canada).
(al) "Custodial Available Subordinated Amount" means the sum of the
Available Subordinated Amount and the sum of the aggregate "available
subordinated amounts" for and as that term may be defined in respect of all
other outstanding Series.
(am) "Daily Report" shall mean a report prepared by the Servicer
pursuant to Section 6.2 on each Business Day for the period specified
therein, in substantially the form of Exhibit B or in such other form as
may be approved by the Agent and the Servicer.
(an) "Daily Wholesale Prime Rate Yield Amount" shall mean, for any day
in any Yield Period, the product of
(i) the portion of the Aggregate Bank Series 1994-1 Invested
Amount not allocated to the BA Tranche on such day divided
by 365 (or 366 in leap years) and
(ii) the Wholesale Prime Rate with respect to that Yield Period.
(ao) "Dealer Rate" shall mean, as of any date, the rate at which
interest on Principal Receivables is being collected from Dealers on such
date.
(ap) "Decrease" shall have the meaning specified in Section 3.3 of
this Bank Series 1994-1 Supplement.
(aq) "Deficiency Amount" shall have the meaning specified in
Section 5.5.
(ar) "Distribution Date Statement" shall mean a report prepared by the
Servicer pursuant to Section 6.3(a) on each Determination Date for the
immediately preceding Collection Period, in substantially the form of
Exhibit C or in such other form as may be approved by the Agent and the
Servicer.
(as) "Effective Date" shall have the meaning specified in Section
11.1.
(at) "Excess Income" shall mean, with respect to any Distribution
Date, the amount, if any, determined pursuant to Section 5.6(a)(v) with
respect to such Distribution Date.
(au) "Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than
0% nor more than 100%) equal to
(i) 100% minus, when used with respect to Non-Principal
Receivables and Defaulted Receivables and Principal
Receivables during the Revolving Period, the sum of
(A) the Floating Allocation Percentage with respect to such
Collection Period and
(B) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount
as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination
Date) and
the denominator of which is the product of
(C) the Pool Balance as of the last day of the immediately
preceding Collection Period and
(D) the Bank Series 1994-1 Allocation Percentage with
respect to the Collection Period in respect of which
the Excess Seller's Percentage is being calculated
or
(ii) 100% minus, when used with respect to Principal Receivables
during a Bank Series 1994-1 Early Amortization Period, the
sum of
(A) the Principal Allocation Percentage with respect to
such Collection Period and
(B) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount
as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination
Date) and
the denominator of which is the product of
(C) the Pool Balance as of the last day of such immediately
preceding Collection Period and
(D) the Bank Series 1994-1 Allocation Percentage with
respect to the Collection Period in respect of which
the Excess Seller's Percentage is being calculated.
(av) "Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Aggregate Bank
Series 1994-1 Invested Amount as of the last day of the immediately
preceding Collection Period and the denominator of which is the product of
(i) the Pool Balance as of such last day; and
(ii) the Bank Series 1994-1 Allocation Percentage with respect to
the Collection Period in respect of which the Floating
Allocation Percentage is being calculated.
(aw) "Increase" shall have the meaning specified in subsection 3.2(a).
(ax) "Increase Amount" shall mean, with respect to any Increase Date,
the amount of the Increase in the Aggregate Bank Series 1994-1 Invested
Amount on such date.
(ay) "Increase Date" shall have the meaning specified in subsection
3.2(a).
(az) "Incremental Subordinated Amount" shall mean, with respect to any
Determination Date, the result obtained by multiplying
(i) a fraction, the numerator of which is the sum of
(A) the Aggregate Bank Series 1994-1 Invested Amount on the
last day of the Collection Period immediately preceding
such Determination Date and
(B) the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such Determination
Date as described in clause (f) of the definition
thereof)
and the denominator of which is the Pool Balance on the last
day of the Collection Period immediately preceding the
Collection Period to which such Determination Date relates
by
(ii) the Custodial Incremental Subordinated Amount.
(ba) "Initial Aggregate Bank Series 1994-1 Invested Amount" shall mean $0.
(bb) "Initial Invested Amount" shall mean, with respect to the Bank
Series 1994-1,
(i) with respect to any Collection Period relating to the
Revolving Period, an amount equal to the sum of
(A) the Initial Aggregate Bank Series 1994-1 Invested
Amount
plus
(B) the aggregate amount of Increases pursuant to Section
3.2 of this Bank Series 1994-1 Supplement made during
or prior to such Collection Period
minus
(C) the aggregate amount of distributions pursuant to
Section 5.6(b) or 5.6(c) of this Bank Series 1994-1
Supplement made or to be made on the Distribution Date
occurring in such Collection Period or made on prior
Distribution Dates and
(ii) as of any date during any Bank Series 1994-1 Early
Amortization Period, the Initial Invested Amount as of the
last day of the Revolving Period.
(bc) "Investment Proceeds" shall mean, with respect to any
Determination Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Fund,
together with an amount equal to the Bank Series 1994-1 Allocation
Percentage of the interest and other investment earnings on funds held in
the Collection Account credited to the Collection Account pursuant to
Section 4.02 of the Agreement.
(bd) "Long-Term Facility Fee Percentage" shall have the meaning
specified in the Long-Term RPA (being 0.1875%).
(be) "Long-Term RPA" shall mean the Long-Term Receivables Purchase
Agreement dated as of May 23, 1994, made among the Seller, CFC, the Agent
and the Bank Series 1994-1 Certificateholders.
(bf) "Monthly Certificateholders' Statement" shall mean a report
prepared by the Servicer pursuant to Section 6.3(b) with respect to each
Distribution Date for the immediately preceding Collection Period, during
the Revolving Period, in substantially the form of Exhibit D-1 and, during
a Bank Series 1994-1 Early Amortization Period, in substantially the form
of Exhibit D-2 or in such other forms as may be approved by the Agent and
the Servicer.
(bg) "Monthly Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Collections of Principal Receivables
for such Collection Period by the average daily Pool Balance for such
Collection Period.
(bh) "Monthly Principal" shall have the meaning specified in Section 5.3.
(bi) "Monthly Servicing Fee" shall have the meaning specified in
Section 4.1.
(bj) "1993 Termination Agreement" shall have the meaning specified in
the Long-Term RPA.
(bk) "Pre-Yield Period Deposit" shall have the meaning specified in
Section 3.2(b)(v).
(bl) "Prime Rate" means on any day the greater of (i) the annual rate
of interest announced from time to time by the Agent as its reference rate
then in effect for determining interest rates on Canadian dollar
denominated commercial loans in Canada and (ii) the annual rate of interest
equal to the sum of (A) the CDOR Rate and (B) 1% per annum.
(bm) "Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Aggregate Bank
Series 1994-1 Invested Amount as of the last day of the Revolving Period
and the denominator of which is the product of
(i) the Pool Balance as of the last day of the immediately
preceding Collection Period and
(ii) the Bank Series 1994-1 Allocation Percentage with respect to
the Collection Period in respect of which the Principal
Allocation Percentage is being calculated;
provided, however, that with respect to that portion of any Collection
Period that falls after the date on which a Bank Series 1994-1 Early
Amortization Event occurs (other than (i) a Bank Series 1994-1 Early
Amortization Event which has resulted in a Bank Series 1994-1 Early
Amortization Period which has ended as described in clause (c) of the
definition of Bank Series 1994-1 Early Amortization Period or (ii) a Bank
Series 1994-1 Early Amortization Event which has resulted in a Bank Series
1994-1 Early Amortization Period which has ended and which has been
followed by a recommenced Revolving Period pursuant to the last proviso in
the definition of Revolving Period), the Principal Allocation Percentage
shall be reset using the Pool Balance as of the close of business on the
date on which such Bank Series 1994-1 Early Amortization Event shall have
occurred and Collections of Principal Receivables shall be allocated for
such portion of such Collection Period using such reset Principal
Allocation Percentage.
(bn) "Purchase Percentage" shall have the meaning specified in the
Long-Term RPA.
(bo) "Purchase Price" shall have the meaning specified in Section 3.2(a).
(bp) "Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the
Aggregate Bank Series 1994-1 Invested Amount on such Distribution Date,
(ii) accrued and unpaid Yield (calculated on the basis of the Aggregate
Bank Series 1994-1 Invested Amount at the Bank Series 1994-1 Certificate
Rate as in effect during the applicable Yield Periods) through the day
preceding such Distribution Date, and (iii) the amount of Additional Yield,
if any, for such Distribution Date and any Additional Yield previously due
but not distributed to the Bank Series 1994-1 Certificateholders on a prior
Distribution Date.
(bq) "Required Participation Percentage" shall mean, with respect to
the Bank Series 1994-1, 104%.
(br) "Required Subordinated Amount" shall mean, as of any date of
determination, the sum of
(i) the product of
(A) the Subordinated Percentage and
(B) the Aggregate Bank Series 1994-1 Invested Amount on
such date and
(ii) the Incremental Subordinated Amount on the immediately
preceding Determination Date.
(bs) "Required Subordination Draw Amount" shall have the meaning
specified in Section 5.5.
(bt) "Reserve Fund" shall have the meaning specified in
Section 5.4(a).
(bu) "Reserve Fund Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which
(i) the Reserve Fund Required Amount for such Distribution Date
exceeds
(ii) the amount of funds in the Reserve Fund after giving effect
to any deposits thereto and withdrawals therefrom otherwise
to be made on such Distribution Date.
(bv) "Reserve Fund Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) 0.55% and (b) the
Aggregate Bank Series 1994-1 Invested Amount on such Distribution Date
(after giving effect to any deposits to and withdrawals from the Reserve
Fund on such Distribution Date).
(bw) "Revolving Period" shall mean the period beginning at the close
of business on the Effective Date and ending on the earlier of
(i) the last day of the Collection Period ending in April, 1998,
and
(ii) the close of business on the day a Bank Series 1994-1 Early
Amortization Period commences;
provided, however, that, if a Bank Series 1994-1 Early Amortization Period
ends as described in clause (c) of the definition of Bank Series 1994-1
Early Amortization Period, the Revolving Period will recommence as of the
close of business on the day such Bank Series 1994-1 Early Amortization
Period ends; provided, further that (i) if any Bank Series 1994-1 Early
Amortization Period has resulted from the occurrence of a Bank Series 1994-1
Early Amortization Event described in Section 7.1(e) of this Bank Series
1994-1 Supplement, (ii) no other Bank Series 1994-1 Early Amortization
Event shall have occurred and the scheduled termination of the Revolving
Period pursuant to clause (a) above shall not have occurred, (iii) the
Aggregate Bank Series 1994-1 Invested Amount shall have been reduced to
zero, and (iv) the Dealer Rate shall be greater than the Bank Series 1994-1
Certificate Rate, the Revolving Period shall recommence as of the close of
business on the date the conditions set forth in clauses (i), (ii), (iii)
and (iv) above shall have been satisfied.
(bx) "Sellers" shall mean CCCL and any Designated Affiliate which may
become an Additional Wholesale Seller (as defined in the Long-Term RPA)
from time to time.
(by) "Seller's Collections" shall mean, with respect to any Collection
Period, the sum of
(i) the Seller's Percentage of Allocable Non-Principal
Collections for the related Collection Period, plus
(ii) the Seller's Percentage of Allocable Principal Collections
for the related Collection Period.
(bz) "Seller's Percentage" shall mean 100% minus
(i) the Floating Allocation Percentage, when used with respect
to Non-Principal Receivables and Defaulted Receivables and,
during the Revolving Period, Principal Receivables, and
(ii) the Principal Allocation Percentage, when used with respect
to Principal Receivables during any Bank Series 1994-1 Early
Amortization Period.
(ca) "Service Default" shall have the meaning ascribed to it in
Section 10.01 of the Agreement and shall include a failure on the part of
the Servicer duly to observe or perform any of the covenants or agreements
of the Servicer set forth herein which has a material adverse effect on the
Bank Series 1994-1 Certificateholders and continues for a period of 30 days
after the date on which written notice of such failure requiring the same
to be remedied, shall have been given to the Servicer by the Agent.
(cb) "Servicing Fee Rate" shall mean, with respect to the Bank Series
1994-1 and with respect to any Distribution Date in respect of which a
Monthly Servicing Fee is payable, the rate determined pursuant to
Section 4.1 hereof, but not in excess of 1%.
(cc) "Subordinated Percentage" shall mean 9.45%.
(cd) "Termination Date" shall mean the date which is 24 months after
the last day of the final Revolving Period.
(ce) "Wholesale Bankers' Acceptance Rate" for any specified term shall
mean the rate per annum equal to the sum of the products obtained by
multiplying each Certificateholder's Bankers' Acceptance Rate for such term
by such Certificateholder's Purchase Percentage.
(cf) "Wholesale Prime Rate" shall mean with respect to each period
from and including an Increase Date or a Distribution Date, as the case may
be (in this definition, the "Prior Date"), to but not including the next
succeeding Distribution Date (in this definition, the "Current Date") the
rate per annum which is the sum of
(i) the product obtained by multiplying the Prime Rate in effect
on the last day of the calendar month next preceding the
Prior Date by a fraction, the numerator of which is the
number of days from and including the Prior Date to and
including the last day of the calendar month next preceding
the Current Date and the denominator of which is the number
of days from and including the Prior Date to but not
including the Current Date and
(ii) the product obtained by multiplying the Prime Rate in effect
on the last day of the calendar month next preceding the
Current Date by a fraction, the numerator of which is the
number of days from and including the first day of the
calendar month in which the Current Date occurs to but not
including the Current Date and the denominator of which is
the number of days from and including the Prior Date to but
not including the Current Date.
(cg) "Yield" shall have the meaning specified in Section 5.2(a).
(ch) "Yield Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding
such Distribution Date (or, in the case of the initial Distribution Date,
the Effective Date) to but excluding such Distribution Date. Yield will be
calculated on the basis of the actual number of days in each Yield Period
divided by 365 (or 366, in leap years).
(ci) "Yield Shortfall" shall have the meaning specified in
Section 5.2(b).
SECTION 2.2. Other Interpretive Provisions.
(a) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The
definitions in Section 2.1 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.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Bank Series 1994-1 Supplement shall refer to this
Bank Series 1994-1 Supplement as a whole and not to any particular
provision of this Bank Series 1994-1 Supplement; references to any Article,
Section or Exhibit are references to Articles, Sections and Exhibits in or
to this Bank Series 1994-1 Supplement unless otherwise specified; and the
term "including" means "including without limitation".
ARTICLE III
The Bank Series 1994-1 Certificates
SECTION 3.1. Purchases of the Bank Series 1994-1 Certificates.
Subject to the terms and conditions of this Bank Series 1994-1 Supplement
and the Long-Term RPA, each Bank Series 1994-1 Certificateholder hereby
severally agrees
(i) to purchase from the Seller, through the Custodian as agent
for and on behalf of each Bank Series 1994-1 Certificate-
holder, on the Effective Date an undivided ownership
interest in the Purchased Property to be evidenced by a Bank
Series 1994-1 Certificate for an amount equal to its
Purchase Percentage of the Initial Aggregate Bank Series
1994-1 Invested Amount;
(ii) to purchase and maintain, in accordance with the provisions
of this Bank Series 1994-1 Supplement, an undivided
ownership interest in the Purchased Property, subject to
increase or decrease during the Revolving Period, equal to
its Purchase Percentage of the Aggregate Bank Series 1994-1
Invested Amount;
(iii) to be bound by and have the benefit of the terms and
conditions of the Agreement and its Bank Series 1994-1
Certificate;
(iv) that the Custodian shall hold the said Purchased Property as
agent for and on behalf of each Bank Series 1994-1
Certificateholder and all other Master Custodial
Certificateholders as tenants in common and shall have the
authority, subject always to compliance with the Agreement,
to issue from time to time Master Custodial Certificates to
CCCL and other Persons who agree to purchase undivided
ownership interests as tenants in common in the Purchased
Property evidenced by Master Custodial Certificates; and
(v) that each Bank Series 1994-1 Certificateholder's rights as
the holder of a Bank Series 1994-1 Certificate and the
interest in the Purchased Property evidenced thereby are
governed by and may only be exercised in accordance with the
Agreement, this Bank Series 1994-1 Supplement and the Long-
Term RPA.
SECTION 3.2. Procedure for Increasing the Invested Amount.
(a) Subject to subsection 2.4 of the Long-Term RPA and
subsections 3.2(b) and 3.2(c), on any Business Day during the Revolving
Period, the Aggregate Bank Series 1994-1 Invested Amount may upon the
request of the Seller be increased (an "Increase") by requiring each Bank
Series 1994-1 Certificateholder to purchase an increase in its undivided
ownership interest in the Purchased Property and the Bank Invested Amount
of each Bank Series 1994-1 Certificateholder shall be increased
correspondingly by an amount equal to its Purchase Percentage of the
Increase upon payment to the Custodian of a purchase price (the "Purchase
Price") equal to such amount (each date on which an increase in the
Aggregate Bank Series 1994-1 Invested Amount occurs hereunder being herein
referred to as the "Increase Date" applicable to such Increase); provided
that CCCL shall have given the Agent irrevocable written notice (effective
upon receipt) of such request pursuant to subsection 2.4 of the Long-Term
RPA, and provided, further, that no more than one Increase shall be made
during any calendar month and that each Increase shall be in an amount of
at least $10,000,000.
(b) The obligation of the Bank Series 1994-1 Certificateholders
to make any Increase requested to be made on any Increase Date is subject
to satisfaction of the following conditions precedent on or before the
Increase Date:
(i) the Available Subordinated Amount shall be an amount greater
than or equal to the Required Subordinated Amount (after
giving effect to such Increase as though the Aggregate Bank
Series 1994-1 Invested Amount had been increased on the
preceding Determination Date);
(ii) no Bank Series 1994-1 Early Amortization Event and no event
which, with the lapse of time, the giving of notice, or
both, or the satisfaction of any other condition would be a
Bank Series 1994-1 Early Amortization Event, shall have
occurred and be continuing;
(iii) after giving effect to the Increase, the Pool Balance shall
be greater than or equal to the Required Participation
Amount as of the last day of the immediately preceding
Collection Period;
(iv) the conditions precedent set forth in Section 4.4 of the
Long-Term RPA shall have been satisfied;
(v) if such Increase takes place on or after the first day of
any calendar month and prior to the Distribution Date
occurring in such calendar month the Seller shall have
deposited in the Reserve Fund an amount (a "Pre-Yield Period
Deposit") equal to the Daily Wholesale Prime Rate Yield
Amount which would accrue with respect to such Increase for
the period from and including the date of such Increase to
but excluding such Distribution Date;
(vi) the amount on deposit in the Reserve Fund shall be greater
than or equal to the Reserve Fund Required Amount after
giving effect to such Increase;
(vii) after giving effect to the Increase, the Long-Term Aggregate
Invested Amount (as defined in the Long-Term RPA) shall not
exceed the Long-Term Aggregate Commitment Amount (as defined
in the Long-Term RPA);
(viii) the Custodian and the Agent shall have received a
Certificate of a Responsible Officer of the Seller stating
that the conditions set forth in this subsection 3.2(b) have
been satisfied;
(ix) the Agent shall have received the favourable written opinion
of counsel for the Seller, dated the relevant Increase Date,
substantially in the form of Exhibit E and covering such
other legal matters as the Agent or its counsel may
reasonably request;
(x) a certificate of a Responsible Officer of the Seller that
the Account Assets are free and clear of any Liens; and
(xi) a certificate executed by a Responsible Officer of the
Seller, dated the relevant Increase Date, to the effect that
all instruments required by applicable legislation to be
registered or filed in order to protect, perfect and
preserve the rights of the Bank Series 1994-1 Certificate-
holders in all the Purchased Property have been or will be,
within the time prescribed by the applicable legislation,
duly executed by the required parties thereto and registered
and filed in each appropriate office in each applicable
jurisdiction (which certificate shall also have annexed
thereto a schedule setting forth each such instrument and
each such office in which such registrations or filings have
been or will be made and such certificate shall also state
that such instruments are the only instrument required and
such offices are the only offices in which registration or
filing is required by applicable legislation in order to
protect, perfect and preserve the interest of the Bank
Series 1994-1 Certificateholders in such Purchased Property
against all creditors of and purchasers from the Seller).
(c) In the case of the first Increase requested to be made after
the Effective Date, the obligation of the Bank Series 1994-1 Certificate-
holders to make such Increase is subject to satisfaction of the conditions
precedent set forth in subsection 3.2(b) and subject to satisfaction of the
further following conditions precedent on or before such Increase Date:
(i) a certificate of a Responsible Officer of the Seller that
the Account Assets are free and clear of any Liens, which
certificate shall have attached thereto the results of
recent searches with respect to the Seller in each of the
Relevant Provinces; and
(ii) if the Seller has agreed to Transfer or has Transferred any
of its wholesale receivables (other than the Receivables) to
any Persons otherwise than pursuant to the Agreement and a
Supplement, the Custodian on behalf of the Bank Series 1994-1
Certificateholders shall have entered into such agreements
with such Persons as are required by and in accordance with
Section 11.01(h) of the Agreement; provided that in such
Section the term "co-ownership agreement" and "inter-
creditor agreement" shall be deemed to include inter-
purchaser and inter-transferee agreements.
(d) Payment by the Bank Series 1994-1 Certificateholders in
respect of any Increase shall be made by the Agent to the Custodian and the
Custodian hereby directs that such payment be made to the Seller.
SECTION 3.3. Procedure for Decreasing the Aggregate Bank Series
1994-1 Invested Amount. On any Distribution Date during the Revolving
Period, the Aggregate Bank Series 1994-1 Invested Amount may be reduced (a
"Decrease") upon request of the Seller by the distribution to the Agent on
behalf of the Bank Series 1994-1 Certificateholders of some or all of
Available Bank Principal Collections on such Distribution Date; provided
that the Seller shall have given the Agent irrevocable written notice
(effective upon receipt) prior to 12:00 Noon (Toronto Time) two Business
Days prior to the date of such Decrease stating the amount of such Decrease
and provided, further, that such Decrease shall be in an amount equal to or
greater than $1,000,000. The Available Subordinated Amount shall
simultaneously be reduced to an amount equal to the Required Subordinated
Amount after giving effect to such Decrease.
SECTION 3.4. Yield. Yield calculated at the rates and in the
manner provided for in Section 5.2 shall be payable on the Bank Series
1994-1 Certificates on each Distribution Date pursuant to Section 5.6.
Calculations of per annum rates and fees under this Bank Series 1994-1
Supplement shall be made on the basis of a 365 or 366 day year (as
applicable) for actual days elapsed. Any change in Yield payable hereunder
resulting from a change in the Wholesale Prime Rate shall become effective
as of the opening of business on the day on which such change is announced.
Whenever in respect of any Bank Series 1994-1 Certificate, the yield is
calculated on the basis of a 365 day year, the annual equivalent of such
rate is equal to the Bank Series 1994-1 Certificate Rate multiplied by 365
(or 366, in leap years) and divided by the actual number of days in the
calendar year.
SECTION 3.5. Changes in Available Subordinated Amount. The
Available Subordinated Amount may be increased on each Increase Date by the
Seller to the Required Subordinated Amount by notice to the Custodian and
the Agent on or before such Increase Date.
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation. A monthly servicing fee,
inclusive of applicable taxes, including goods and services tax, if any
(the "Monthly Servicing Fee"), shall be payable by the Bank Series 1994-1
Certificateholders and the Seller to any Successor Servicer, other than a
Successor Servicer which is an Affiliate of CCCL, in arrears, on each
Distribution Date in respect of any Collection Period (or portion thereof)
occurring prior to the Termination Date in an amount to be agreed upon by
the Successor Servicer and by the Custodian, as agent for and on behalf of
the Master Custodial Certificateholders; provided, however, that the
Monthly Servicing Fee shall not exceed an amount equal to one-twelfth of
the product of
(a) 1%,
(b) the Pool Balance as of the last day of the Collection Period
second preceding such Distribution Date and
(c) the Bank Series 1994-1 Allocation Percentage with respect to the
immediately preceding Collection Period.
No Monthly Servicing Fee shall be payable while CCCL or any Affiliate of
CCCL is the Servicer. The share of the Monthly Servicing Fee allocable to
the Bank Series 1994-1 Certificateholders with respect to any Distribution
Date (the "Bank Series 1994-1 Monthly Servicing Fee") shall be equal to
one-twelfth of the product of
(a) the Servicing Fee Rate and
(b) the Aggregate Bank Series 1994-1 Invested Amount as of the last
day of the Collection Period second preceding such Distribution
Date.
The remainder of the Monthly Servicing Fee shall be paid by the Seller and
in no event shall the Custodian or the Bank Series 1994-1 Certificate-
holders be liable for the share of the Monthly Servicing Fee to be paid by
the Seller; and the remainder of the Servicing Fee shall be paid by the
Seller and the Investor Master Custodial Certificateholders of other Series
and the Bank Series 1994-1 Certificateholders shall in no event be liable
for the share of the Servicing Fee to be paid by the Seller or the Investor
Master Custodial Certificateholders of other Series. The Bank Series 1994-1
Monthly Servicing Fee shall be payable to the Servicer solely to the
extent amounts are available for distribution in accordance with the terms
of this Bank Series 1994-1 Supplement.
Any Successor Servicer will be permitted, in its sole discretion,
to waive the Monthly Servicing Fee, if any, for any Distribution Date by
notice to the Custodian on or before the related Determination Date;
provided that the Successor Servicer believes that sufficient Collections
of Non-Principal Receivables will be available on any future Distribution
Date to pay the Bank Series 1994-1 Monthly Servicing Fee relating to the
waived Monthly Servicing Fee. If the Successor Servicer so waives the
Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee
and the Bank Series 1994-1 Monthly Servicing Fee for such Distribution Date
shall be deemed to be zero for all purposes of this Bank Series 1994-1
Supplement and the Agreement; provided, however, that such Bank Series
1994-1 Monthly Servicing Fee shall be paid on a future Distribution Date
solely to the extent amounts are available therefor pursuant to
Section 5.10(b); provided further that, to the extent any such waived Bank
Series 1994-1 Monthly Servicing Fee is so paid, the related portion of the
Monthly Servicing Fee to be paid by the Seller shall be paid by the Seller
to the Successor Servicer.
ARTICLE V
Rights of Bank Series 1994-1 Certificateholders and Allocation and
Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections.
(a) Collections of Non-Principal Receivables and Principal
Receivables, Miscellaneous Payments and Defaulted Amounts and unpaid
Adjustment Payments allocated to the Bank Series 1994-1 pursuant to Article
IV of the Agreement shall be allocated and distributed as set forth in this
Article.
(b) The Servicer shall instruct the Custodian to withdraw from
the Collection Account and pay to the Seller on the dates set forth below
the following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Non-
Principal Collections deposited in the Collection
Account on such Deposit Date; and
(B) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Principal
Collections deposited in the Collection Account on such
Deposit Date, if the Seller's Invested Amount
(determined after giving effect to the transfer of any
Principal Receivables to the Custodian on such Deposit
Date) exceeds the Custodial Available Subordinated
Amount for the immediately preceding Determination Date
(after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution
Date immediately following such Determination Date and
to any Increase made thereafter that is not reflected
in the Custodial Available Subordinated Amount); and
(ii) on each Deposit Date with respect to the Revolving Period,
an amount equal to the Available Seller's Principal
Collections for such Deposit Date, if the Seller's Invested
Amount (determined after giving effect to any Principal
Receivables transferred to the Custodian on such Deposit
Date) exceeds the Custodial Available Subordinated Amount
for the immediately preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals
and deposits to be made on the Distribution Date immediately
following such Determination Date and to any Increase made
thereafter that is not reflected in the Custodial Available
Subordinated Amount); provided, however, that Available
Seller's Principal Collections shall be paid to the Seller
with respect to any Collection Period only after an amount
equal to the sum of
(A) the Deficiency Amount, if any, relating to the
immediately preceding Collection Period and
(B) the excess, if any, of the Reserve Fund Required Amount
over the amount in the Reserve Fund on the immediately
preceding Distribution Date (after giving effect to the
allocations of, distributions from, and deposits in,
the Reserve Fund on such Distribution Date), has been
deposited in the Collection Account for the account of
Bank Series 1994-1 Certificateholders from such
Available Seller's Principal Collections.
The withdrawals to be made from the Collection Account pursuant
to this Section 5.1(b) do not apply to deposits into the Collection Account
that do not represent Collections, including Miscellaneous Payments,
payments of the purchase price for the Master Custodial Certificateholders'
Interest pursuant to Section 2.03 of the Agreement, payments of the
purchase price for the Bank Series 1994-1 Certificateholders' Interest
pursuant to Section 9.1 of this Bank Series 1994-1 Supplement and proceeds
from the sale, disposition or liquidation of Receivables pursuant to
Section 12.02 of the Agreement.
(c) The Servicer shall instruct the Custodian to withdraw from
the Collection Account and deposit into the Reserve Fund on each Deposit
Date during the Revolving Period Available Seller's Principal Collections
for such Deposit Date, up to the amount of the excess, if any, determined
pursuant to Section 5.1(b)(ii)(B).
SECTION 5.2. Yield and Yield Options.
(a) (i) The amount of yield ("Yield") with respect to the Bank
Series 1994-1 Certificates payable on any Distribution Date
shall be an amount equal to the sum of (x) the product of
(A) the Bank Series 1994-1 Certificate Rate for such Yield
Period, (B) the Aggregate Bank Series 1994-1 Invested Amount
as of the close of business on the preceding Distribution
Date (after giving effect to all repayments of principal
made to Bank Series 1994-1 Certificateholders on such
preceding Distribution Date, if any) and (C) a fraction, the
numerator of which is the actual number of days elapsed in
such Yield Period and the denominator of which is 365 (or
366, in leap years) and (y) the product of (A) the Bank
Series 1994-1 Certificate Rate for such Yield Period, (B)
the amount of any Increase made after such preceding
Distribution Date and prior to the first day of the calendar
month following such preceding Distribution Date, and (C) a
fraction, the numerator of which is the actual number of
days elapsed from and including the Increase Date related to
such Increase to but excluding the next succeeding
Distribution Date and the denominator of which is 365 (or
366, in leap years) and (z) the amount equal to any Pre-
Yield Period Deposit made during the Yield Period preceding
such Yield Period.
(ii) In the event the Wholesale Prime Rate changes during the
period between any Determination Date and the following
Distribution Date and a portion of the Aggregate Bank Series
1994-1 Invested Amount has not been allocated to the BA
Tranche, the Servicer and the Agent shall cooperate on the
date of such change in modifying the Distribution Date
Statement to reflect the adjustment in the Yield for the
then current Yield Period caused by such change and any
consequent adjustments, including adjustment to the
Deficiency Amount, if any. Any such modification, including
any adjustment to the Deficiency Amount shall be completed
by 10:00 a.m. on such Distribution Date.
(b) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Yield Shortfall"), of
(x) the aggregate Yield for the Yield Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Bank Series 1994-1 Certificateholders on such Distribution
Date in respect thereof pursuant to this Bank Series 1994-1 Supplement. If
the Yield Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Additional Yield") equal to the product of
(i) the Bank Series 1994-1 Certificate Rate for the Yield Period commencing
on the related Distribution Date (or, for subsequent Yield Periods, the
Bank Series 1994-1 Certificate Rate for such subsequent Yield Periods),
(ii) such Yield Shortfall (or the portion thereof which has not been paid)
and (iii) a fraction, the numerator of which is the actual number of days
elapsed in such Yield Period (or in a subsequent Yield Period) and the
denominator of which is 365 (or 366, in leap years) shall be payable as
provided herein with respect to the Bank Series 1994-1 Certificates on each
Distribution Date following such Distribution Date to and including the
Distribution Date on which such Yield Shortfall is paid. Notwithstanding
anything to the contrary herein, Additional Yield shall be payable or
distributed to Bank Series 1994-1 Certificateholders only to the extent
permitted by applicable law.
(c) (i) At least three Business Days prior to each Distribution
Date, the Seller may elect to have the yield due to the Bank
Series 1994-1 Certificateholders hereunder on all or any
portion of the Aggregate Bank Series 1994-1 Invested Amount
(determined in each case on such Distribution Date and after
giving effect to any distributions and Increases proposed on
such Date) based on the Wholesale Prime Rate or on one or
more Wholesale Bankers' Acceptance Rates for Canadian dollar
discount bankers' acceptances issued on the Distribution
Date maturing in a minimum of 28 days and a maximum of 180
days on a Distribution Date. The rate selection shall apply
for the period from and including the Distribution Date in
respect of which the election is being made to but not
including the immediately following Distribution Date;
provided, however, that if the Seller selects a Wholesale
Bankers' Acceptance Rate for discount bankers' acceptances
maturing after such immediately following Distribution Date,
then the Seller shall be deemed to have selected such rate
in respect of the applicable portion or portions of the
Aggregate Bank Series 1994-1 Invested Amount for the period
to the maturity date for such discount bankers' acceptances.
(ii) The Seller shall give written or telephonic notice (promptly
confirmed in writing) to the Agent of such election and
shall specify in such notice the portion or portions of the
Aggregate Bank Series 1994-1 Invested Amount to which each
such rate shall apply. If the Seller fails to give notice
of its yield option election in a timely manner as required,
the yield on the Aggregate Bank Series 1994-1 Invested
Amount (other than the portion or portions for which the
Seller shall have been deemed to have selected a rate as
aforesaid) shall be based on the Wholesale Prime Rate.
(iii) Promptly after receiving the Seller's yield option election
as aforesaid, the Agent shall notify each Bank Series 1994-1
Certificateholder thereof.
(iv) On each Distribution Date on which a Wholesale Bankers'
Acceptance Rate is to be calculated, each Bank Series 1994-1
Certificateholder will notify the Agent and the Seller of
its applicable Certificateholder's Bankers' Acceptance Rate.
(v) Notwithstanding anything to the contrary in this subsection
5.2(c),
(A) the portion of the Aggregate Bank Series 1994-1
Invested Amount to which a particular Wholesale
Bankers' Acceptance Rate shall apply shall be a minimum
of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, and
(B) in the event that the Agent shall have determined
(which determination shall be conclusive and binding
upon the Seller) that (I) quotation of annual rates for
the relevant discount bankers' acceptances referred to
above are not being provided in the relevant amount or
for the relevant maturities for the purposes of
determining the yield when based on the Wholesale
Bankers' Acceptance Rate, or (II) the Wholesale
Bankers' Acceptance Rate does not accurately reflect
the cost to the Bank Series 1994-1 Certificateholders
of adding to or maintaining their respective
investments in their respective portions of the
Aggregate Bank Series 1994-1 Invested Amount, the Agent
shall forthwith give written notice of such
determination to the Seller at least one day prior to
the Distribution Date on which such rate is to be
applied hereunder and if such notice is given then,
until such notice has been withdrawn by the Agent, the
Seller shall not have the option to elect the
calculation of the annual rate of return based upon the
Wholesale Bankers' Acceptance Rate.
(d) Anything contained in this Section 5.2 to the contrary
notwithstanding, after the occurrence and during the continuance of any
Bank Series 1994-1 Early Amortization Event, the Seller may not elect to
allocate all or any part of the Aggregate Bank Series 1994-1 Invested
Amount to the BA Tranche.
SECTION 5.3. Determination of Monthly Principal. The amount of
monthly principal ("Monthly Principal") distributable with respect to the
Bank Series 1994-1 Certificates on each Distribution Date with respect to
any Bank Series 1994-1 Early Amortization Period shall be equal to the
Available Bank Principal Collections with respect to such Distribution
Date; provided, however, that Monthly Principal shall not exceed the
Aggregate Bank Series 1994-1 Invested Amount.
SECTION 5.4. Establishment of Reserve Fund.
(a) (i) The Custodian, as agent for and on behalf of the Bank Series
1994-1 Certificateholders, shall cause to be established and
maintained at the Custodian an Eligible Deposit Account (the
"Reserve Fund") which shall be identified as the "Reserve
Fund for the Master Custodial and Servicing Agreement, Bank
Series 1994-1" and shall bear a designation clearly
indicating that the funds deposited therein belong to the
Bank Series 1994-1 Certificateholders and to the Seller as
their interests appear herein.
(ii) At the direction of the Servicer, funds on deposit in the
Reserve Fund shall be invested by the Custodian in Eligible
Investments selected by the Servicer that will mature so
that such funds will be available at the close of business
on or before the Business Day next preceding the following
Distribution Date. All Eligible Investments shall be held by
the Custodian as agent for and on behalf of the Bank Series
1994-1 Certificateholders and the Seller as their interests
appear herein. On each Distribution Date, all interest and
other investment earnings (net of losses and investment
expenses) on funds on deposit in the Reserve Fund received
prior to such Distribution Date shall be applied as set
forth in Section 5.6(a) of this Bank Series 1994-1
Supplement. Funds deposited in the Reserve Fund on a
Business Day (which immediately precedes a Distribution
Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.
(b) (i) The Bank Series 1994-1 Certificateholders shall possess all
right, title and interest in and to all funds on deposit
from time to time in, and all Eligible Investments credited
to, the Reserve Fund and in all proceeds thereof, except to
the extent of the interest of the Seller therein to the
extent expressly set forth in this Bank Series 1994-1
Supplement. The Bank Series 1994-1 Certificateholders
agree, by acceptance of their Bank Series 1994-1
Certificates and without further action, that all such funds
and Eligible Investments shall be maintained, invested and
disbursed in accordance with this Bank Series 1994-1
Supplement and the Bank Series 1994-1 Certificateholders
hereby authorize and empower the Custodian and the Servicer
to maintain, invest and disburse such funds and Eligible
Investments in accordance with this Bank Series 1994-1
Supplement. If, at any time, the Reserve Fund ceases to be
an Eligible Deposit Account, the Custodian (or the Servicer
on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the
Agent may consent) establish a new Reserve Fund meeting the
conditions specified in paragraph 5.4(a)(i) above, as
applicable, as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Reserve
Fund. None of the Seller, the Servicer, the Custodian nor
any person or entity claiming by, through or under the
Seller, the Servicer, the Custodian or any such person or
entity shall have any right, title or interest in, or any
right to withdraw any amount from, the Reserve Fund, except
as expressly provided herein. Schedule 1, which is hereby
incorporated into and made part of this Bank Series 1994-1
Supplement, identifies the Reserve Fund by setting forth the
account number of such account, the account designation of
such account and the name of the institution with which such
account has been established. If a substitute Reserve Fund
is established pursuant to this Section, the Servicer, prior
to making any deposits therein, shall provide to the
Custodian an amended Schedule 1, setting forth the relevant
information for such substitute Reserve Fund.
(ii) Pursuant to the authority granted to the Servicer in
Section 4.01(a) of the Agreement, the Servicer shall have
the power, revocable by the Custodian, to make withdrawals
and payments or to instruct the Custodian to make
withdrawals and payments from the Reserve Fund for the
purposes of carrying out the Servicer's or Custodian's
duties hereunder.
(iii) Unless otherwise agreed to by the Agent, at no time may
Eligible Investments in a principal amount equal to more
than 10% of the Aggregate Bank Series 1994-1 Invested Amount
be invested in Eligible Investments (other than obligations
of the Government of Canada) of any single entity or its
Affiliates.
SECTION 5.5. Deficiency Amount. With respect to each
Distribution Date, on the related Determination Date, the Servicer shall
determine the amount (the "Deficiency Amount"), if any, by which
(a) the sum of
(i) Yield for such Distribution Date,
(ii) any Yield previously due but not distributed to the Bank
Series 1994-1 Certificateholders on a prior Distribution
Date,
(iii) Additional Yield, if any, for such Distribution Date and any
Additional Yield previously due but not distributed to the
Bank Series 1994-1 Certificateholders on a prior
Distribution Date,
(iv) the Bank Series 1994-1 Monthly Servicing Fee, if any, for
such Distribution Date, and
(v) the Bank Defaulted Amount, if any, for such Distribution
Date, and
(vi) the Bank Series 1994-1 Allocation Percentage of the amount
of any Adjustment Payment required to be deposited in the
Collection Account pursuant to Section 3.09(a) of the
Agreement with respect to the related Collection Period that
has not been so deposited as of such Determination Date,
exceeds
(b) the sum of
(i) Bank Non-Principal Collections for such Distribution Date,
Available Seller's Non-Principal Collections for such
Distribution Date, any Investment Proceeds with respect to
such Distribution Date, and
(ii) the amount of funds in the Reserve Fund which are available
pursuant to Section 5.8(a) to cover any portion of the
Deficiency Amount.
The lesser of the Deficiency Amount and the Available Subordinated Amount
shall be the "Required Subordination Draw Amount".
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller's Non-Principal Collections, Investment Proceeds and
Available Bank Principal Collections. The Servicer shall cause the
Custodian to apply, on each Distribution Date, Bank Non-Principal
Collections, Available Seller's Non-Principal Collections, Investment
Proceeds and Available Bank Principal Collections to make the following
distributions:
(a) On each Distribution Date, an amount equal to the sum of Bank
Non-Principal Collections, Available Seller's Non-Principal
Collections and any Investment Proceeds with respect to the
preceding Collection Period will be distributed in the following
priority:
(i) first, an amount equal to Yield for such Distribution Date,
plus the amount of any Yield previously due but not
distributed to the Bank Series 1994-1 Certificateholders on
a prior Distribution Date, plus the amount of any Additional
Yield for such Distribution Date and any Additional Yield
previously due but not distributed to the Bank Series 1994-1
Certificateholders on a prior Distribution Date, shall be
distributed to the Bank Series 1994-1 Certificateholders;
(ii) second, an amount equal to the Bank Series 1994-1 Monthly
Servicing Fee, if any, for such Distribution Date shall be
distributed to the Successor Servicer (unless such amount
has been netted against deposits to the Collection Account
or waived);
(iii) third, an amount equal to the Bank Defaulted Amount for such
Distribution Date shall be distributed and treated as a
portion of Bank Principal Collections for such Distribution
Date;
(iv) fourth, an amount equal to the Reserve Fund Deposit Amount,
if any, for such Distribution Date shall be deposited in the
Reserve Fund; and
(v) fifth, the balance, if any, shall constitute Excess Income
and shall be allocated and distributed as set forth in
Section 5.10.
(b) (i) On each Distribution Date with respect to the Revolving
Period with respect to which the Seller has notified the
Agent a Decrease will occur, an amount of Available Bank
Principal Collections deposited in the Collection Account
for the related Collection Period equal to such Decrease
will be distributed to the Bank Series 1994-1 Certificate-
holders. The Aggregate Bank Series 1994-1 Invested Amount
shall be reduced by the amount of Available Bank Principal
Collections so distributed. Any such remaining Available
Bank Principal Collections shall be treated as Excess
Principal Collections and applied in accordance with Section
4.04 of the Agreement.
(ii) On each Distribution Date with respect to the Revolving
Period with respect to which the Seller has not notified the
Agent it will be making a Decrease, an amount equal to
Available Bank Principal Collections deposited in the
Collection Account for the related Collection Period shall
be treated as Excess Principal Collections and applied in
accordance with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to a Bank Series 1994-1
Early Amortization Period, an amount equal to Available Bank
Principal Collections will be distributed in the following
priority:
(i) first, an amount equal to Monthly Principal for such
Distribution Date shall be paid to the Bank Series 1994-1
Certificateholders; and
(ii) second, after giving effect to the payment referred to in
clause (i) above, an amount equal to the balance, if any, of
such Available Bank Principal Collections shall be treated
as Excess Principal Collections and applied in accordance
with Section 4.04 of the Agreement and Section 5.11 hereof.
SECTION 5.7. Distributions to Bank Series 1994-1 Certificate-
holders. Notwithstanding anything to the contrary in this Bank Series
1994-1 Supplement or the Agreement, to the extent there are any amounts
owing to the Bank Series 1994-1 Certificateholders hereunder on the
Termination Date, such amounts shall be distributed to the Bank Series
1994-1 Certificateholders from Available Seller's Collections on such
Termination Date.
SECTION 5.8. Application of Reserve Fund and Available
Subordinated Amount.
(a) If the portion of Bank Non-Principal Collections, Available
Seller's Non-Principal Collections and Investment Proceeds allocated to
Bank Series 1994-1 Certificateholders on any Distribution Date pursuant to
Section 5.6(a) is not sufficient to make the entire distributions required
on such Distribution Date by Sections 5.6(a)(i), 5.6(a)(ii) and
5.6(a)(iii), the Servicer shall cause the Custodian to withdraw funds from
the Reserve Fund, to the extent available therein, and apply such funds to
complete the distributions pursuant to Sections 5.6(a)(i), 5.6(a)(ii) and
5.6(a)(iii).
(b) If there is a Required Subordination Draw Amount for such
Distribution Date, the Servicer shall apply or cause the Custodian to apply
the Available Seller's Principal Collections on deposit in the Collection
Account on such Distribution Date, but only up to the amount of the
Required Subordination Draw Amount, to make the distributions required by
Sections 5.6(a)(i), 5.6(a)(ii) and 5.6(a)(iii) that have not been made
through the application of funds from the Reserve Fund in accordance with
the preceding paragraph. Any such Available Seller's Principal Collections
remaining after the application thereof pursuant to the preceding sentence
and any Available Seller's Non-Principal Collections remaining after the
application thereof pursuant to Section 5.6(a) shall be treated as a
portion of Bank Principal Collections for such Distribution Date, but only
up to the amount of unpaid Adjustment Payments allocated to the Bank Series
1994-1 as described in Section 5.5(a)(vi). The amount of the Available
Seller's Principal Collections applied in accordance with the two preceding
sentences shall reduce the Available Subordinated Amount as described in
clause (c) of the definition thereof. If the Required Subordination Draw
Amount exceeds Available Seller's Collections for such Distribution Date,
the Available Subordinated Amount shall be further reduced by the amount of
such excess, but not by more than the sum of (x) the Bank Defaulted Amount
and (y) an amount of unpaid Adjustment Payments allocated to the Bank
Series 1994-1 as described in Section 5.5(a)(vi).
(c) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Fund made pursuant to Sections 5.1(c),
5.4, 5.6(a) and 5.8(a), the amount in the Reserve Fund is greater than the
Reserve Fund Required Amount for such Distribution Date, the Servicer shall
cause the Custodian to distribute such excess amount to the Seller,
provided that the Custodial Available Subordinated Amount for the
immediately preceding Determination Date exceeds the Seller's Invested
Amount on such date (determined after giving effect to any Principal
Receivables Transferred to the Custodian on such Distribution Date). On
the Termination Date, any funds in the Reserve Fund will be treated as
Available Bank Principal Collections. Upon the earlier of the Termination
Date and the payment in full of the Aggregate Bank Series 1994-1 Invested
Amount any funds remaining on deposit in the Reserve Fund shall be paid to
the Seller.
(d) If, for any Distribution Date with respect to a Bank Series 1994-1
Early Amortization Event, after giving effect to the allocations of,
distributions from, and deposits in, the Reserve Fund made pursuant to
Sections 5.1(c), 5.4, 5.6(a) and 5.8, the amount in the Reserve Fund is
less than the Reserve Fund Required Amount for such Distribution Date, the
Custodian shall deposit any remaining Available Seller's Principal
Collections on deposit in the Collection Account for such Distribution Date
into the Reserve Fund until the amount in the Reserve Fund is equal to such
Reserve Fund Required Amount.
(e) The balance of Available Seller's Principal Collections on any
Distribution Date, after giving effect to any distributions thereof
pursuant to Section 5.6 and this Section 5.8(b) and 5.8(d) shall be
distributed to the Seller on such Distribution Date, provided that, the
Custodial Available Subordinated Amount for the immediately preceding
Determination Date exceeds the Seller's Invested Amount on such date
(determined after giving effect to any Principal Receivables Transferred to
the Custodian on such Distribution Date).
SECTION 5.9. Bank Charge-Offs. If, on any Distribution Date on
which the Available Subordinated Amount on the preceding Determination Date
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on such Distribution Date) is zero and the Deficiency
Amount for such Distribution Date is greater than zero, the Aggregate Bank
Series 1994-1 Invested Amount shall be reduced by the amount (a "Bank
Charge-Off") of the excess of such Deficiency Amount over any remaining
Available Subordinated Amount on such Determination Date, but not by more
than the Bank Defaulted Amount. The Bank Series 1994-1 Certificateholders
shall thereafter be reimbursed in respect of the Bank Charge-Offs and the
Aggregate Bank Series 1994-1 Invested Amount increased (but not by an
amount in excess of the aggregate unreimbursed Bank Charge-Offs on any
Distribution Date) by the sum of
(a) Allocable Miscellaneous Payments with respect to such
Distribution Date and
(b) the amount of Excess Income allocated and available for that
purpose pursuant to Section 5.10(a).
SECTION 5.10. Excess Income. The Servicer shall cause the
Custodian to apply, on each Distribution Date, Excess Income with respect
to the Collection Period immediately preceding such Distribution Date, to
make the following distributions in the following priority:
(a) an amount equal to the aggregate amount of Bank Charge-Offs in
respect of which the Bank Series 1994-1 Certificateholders have
not been previously reimbursed as provided in Section 5.9 (after
giving effect to the allocation on such Distribution Date of any
amount for that purpose pursuant to Section 5.9) shall be treated
as a portion of Bank Principal Collections with respect to such
Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of the Bank
Series 1994-1 Monthly Servicing Fee, if any, which have been
previously waived pursuant to Section 4.1 shall be distributed to
the Servicer; and
(c) the balance, if any, shall be distributed to the Seller.
SECTION 5.11. Excess Principal Collections.
(a) On each Distribution Date, the Servicer shall allocate a portion
of Excess Principal Collections to the Bank Series 1994-1 as set forth in
this Bank Series 1994-1 Supplement. That portion of Excess Principal
Collections for any Distribution Date allocated to the Bank Series 1994-1
for any Distribution Date (the "Bank Series 1994-1 Excess Principal
Collections") shall be the amount specified under Section 5.11(b) and shall
be distributed as set forth in this Bank Series 1994-1 Supplement.
(b) Bank Series 1994-1 Excess Principal Collections, with respect to
any Distribution Date, shall be an amount equal to the Bank Series 1994-1
Principal Shortfall for such Distribution Date; provided, however, that, if
the aggregate amount of Excess Principal Collections for all Series for
such Distribution Date is less than the aggregate amount of Principal
Shortfalls for all Series for such Distribution Date, then Bank Series
1994-1 Excess Principal Collections for such Distribution Date shall be an
amount equal the product of (x) Excess Principal Collections for all Series
for such Distribution Date and (y) a fraction, the numerator of which is
the Bank Series 1994-1 Principal Shortfall for such Distribution Date and
the denominator of which is the aggregate amount of Principal Shortfalls
for all Series for such Distribution Date. The "Bank Series 1994-1
Principal Shortfall", with respect to any Distribution Date, means an
amount equal to the excess, if any, of (i) (x) for any Distribution Date
with respect to the Revolving Period, the amount of the Decrease, if any,
with respect to such Distribution Date or (y) for any Distribution Date
with respect to a Bank Series 1994-1 Early Amortization Period, the
Aggregate Bank Series 1994-1 Invested Amount, over (ii) Available Bank
Principal Collections for such Distribution Date (excluding any portion
thereof attributable to Excess Principal Collections).
SECTION 5.12. Allocations and Applications of Collections and
Other Funds. For purposes of Section 4.03(e)(i) of the Agreement as it
relates to the Bank Series 1994-1 and the definition of Series Adjusted
Invested Amount as it relates to the Bank Series 1994-1, each Increase
pursuant to Section 3.2 of this Bank Series 1994-1 Supplement and each
Decrease pursuant to Section 3.3 of this Bank Series 1994-1 Supplement (and
any related increase or decrease in the Available Subordinated Amount)
shall be deemed to have occurred as of the last day of the Collection
Period immediately preceding the Collection Period in which such Increase
or Decrease occurs.
ARTICLE VI
Distributions and Reports
to Bank Series 1994-1 Certificateholders
SECTION 6.1. Distributions.
(a) On each Distribution Date with respect to a Collection Period
during which the Aggregate Bank Series 1994-1 Invested Amount was greater
than zero at any time, the Servicer shall cause the Custodian to distribute
to the Agent on behalf of each Bank Series 1994-1 Certificateholder of
record on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) all amounts
required to be distributed to the Bank Series 1994-1 Certificateholders in
Article V and promptly thereafter the Agent shall make available to each
Bank Series 1994-1 Certificateholder pursuant to subsection 2.8(c) of the
Long-Term RPA an amount equal to the product of (i) the amounts to be
distributed to the Bank Series 1994-1 Certificateholders pursuant to
Article V and (ii) such Bank Series 1994-1 Certificateholder's Purchase
Percentage. Each Bank Series 1994-1 Certificateholder's Purchase
Percentage of Yield or Additional Yield will be calculated by the Agent as
if references to "Wholesale Bankers' Acceptance Rate" in the definition of
"Blended Wholesale Rate" were references to the applicable "Certificate-
holder's Bankers' Acceptance Rate".
(b) Except as provided in Section 12.02 of the Agreement with respect
to a final distribution, distributions to Bank Series 1994-1 Certificate-
holders hereunder shall be made by wire transfer to the Agent on behalf of
each Bank Series 1994-1 Certificateholder without presentation or surrender
of any Bank Series 1994-1 Certificate or the making of any notation
thereon; provided, however, that, subject to the receipt of the
Distribution Date Statement pursuant to Section 6.3(a) hereof, the
Custodian shall give wire transfer instructions with respect to such
distributions by 10:00 a.m., Toronto time, for wire transfer of such
distributions to the Agent to the account specified by the Agent at the
Royal Bank of Canada, Main Branch, Royal Bank Plaza, Toronto, Ontario, or
such other account in Canada as the Agent shall specify to the Servicer and
Custodian in writing from time to time in immediately available funds.
(c) All allocations and distributions hereunder shall be in
accordance with the Distribution Date Statement delivered by the Servicer
to the Custodian pursuant to subsection 6.3(a) and shall be made in lawful
currency of Canada and in immediately available funds.
SECTION 6.2. Daily Reports. On each Business Day when the
Aggregate Bank Series 1994-1 Invested Amount is greater than zero, the
Servicer shall provide the Agent and the Custodian with a Daily Report and
the Agent shall at the reasonable request of the Bank Series 1994-1
Certificateholders make copies of the Daily Reports available at its Main
Branch, Toronto.
SECTION 6.3. Periodic Reports.
(a) Distribution Date Statements. On each Determination Date with
respect to a Collection Period during which the Aggregate Bank Series 1994-1
Invested Amount was greater than zero at any time, the Servicer shall
deliver to the Custodian and the Agent a Distribution Date Statement and
the Agent shall forward a copy of each such Distribution Date Statement to
each Bank Series 1994-1 Certificateholder. The Custodian shall be entitled
to rely on each Distribution Date Statement to determine the Aggregate Bank
Series 1994-1 Invested Amount.
(b) Monthly Certificateholders' Statement. On each Distribution Date
with respect to a Collection Period during which the Aggregate Bank Series
1994-1 Invested Amount was greater than zero at any time, the Servicer
shall deliver to the Custodian and the Agent a Monthly Certificateholders'
Statement and the Agent shall forward a copy of each such statement to each
Bank Series 1994-1 Certificateholder.
(c) Bank Series 1994-1 Early Amortization Period Notices. Upon the
occurrence of a Bank Series 1994-1 Early Amortization Event or any event
which, with the giving of notice, the lapse of time or both, or the
satisfaction of any other condition, would be a Bank Series 1994-1 Early
Amortization Event, the Seller or the Servicer, as the case may be, shall
give prompt written notice thereof to the Custodian and the Agent. In
addition, the Seller shall give the Agent written notice of the occurrence
and nature of an Early Amortization Event with respect to any other Series
which is not a Bank Series 1994-1 Early Amortization Event or any event
which, with the giving of notice, the lapse of time or both, or the
satisfaction of any other condition would be an Early Amortization Event
for such other Series.
(d) Annual Tax Statement. As soon as practicable after the end of
each calendar year during which the Aggregate Bank Series 1994-1 Invested
Amount was greater than zero at any time, beginning with calendar year
1994, the Custodian shall furnish or cause to be furnished to each Person
who at any time during the preceding calendar year was a Bank Series 1994-1
Certificateholder, a statement prepared by the Servicer containing the
information which is required to be contained in the Distribution Date
Statement aggregated for such preceding calendar year or the applicable
portion thereof during which such Person was a Bank Series 1994-1
Certificateholder, together with other information as is necessary to
enable the Bank Series 1994-1 Certificateholders to prepare their Canadian
federal and provincial income, large corporations and capital tax returns.
(e) Tax Information. Each of the Custodian, the Servicer and the
Seller shall, upon reasonable notice and during normal business hours, in
connection with any assessment, reassessment or audit of any Bank Series
1994-1 Certificateholder under or pursuant to any relevant Canadian federal
or provincial taxing legislation, or any objection to or appeal from such
assessment, reassessment or audit, make available to the affected Bank
Series 1994-1 Certificateholder, its advisors and relevant taxing
authorities, all information, records, and documents in its possession
pertaining to the Purchased Assets or the Bank Series 1994-1 Certificate-
holder's ownership interest therein which is relevant to such assessment,
reassessment or audit. The obligations of the Custodian, Seller and
Servicer under this clause shall survive and continue notwithstanding any
termination of or final distribution with respect to this Bank Series 1994-1
Supplement or any termination of custodial arrangements created under the
Agreement.
ARTICLE VII
Amortization Events
SECTION 7.1. Additional Amortization Events. The occurrence of
any of the following events shall, immediately upon the occurrence thereof
without notice or other action on the part of the Custodian, the Agent or
the Bank Series 1994-1 Certificateholders, be deemed to be an Early
Amortization Event solely with respect to the Bank Series 1994-1;
(a) on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods is less than 20%;
(b) on any Determination Date, the Available Subordinated Amount for
the next Distribution Date will be less than the Required
Subordinated Amount on such Determination Date, after giving
effect to the distributions to be made on the next Distribution
Date;
(c) any Service Default as defined in this Bank Series 1994-1
Supplement occurs;
(d) on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds 20% of the Pool Balance on such
last day;
(e) any Yield Shortfall or Additional Yield exists on six consecutive
Distribution Dates;
(f) on any Determination Date the average ratio of the Allocable
Defaulted Amounts for the three preceding Collection Periods to
the Allocable Principal Collections for the three preceding
Collection Periods exceeds O.75%; or
(g) the earlier of (i) the day any Commitment Termination Event, as
defined in the Long-Term RPA, occurs and (ii) May 22, 1998.
SECTION 7.2. Notice of Bank Series 1994-1 Early Amortization
Event. The Custodian shall not be deemed to have knowledge of the
occurrence of an Bank Series 1994-1 Early Amortization Event unless the
Custodian shall have received written notice describing such Bank Series
1994-1 Early Amortization Event and stating that such notice is a "notice
of Bank Series 1994-1 Early Amortization Event".
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.1. Representations and Warranties of the Seller and
the Servicer.
(a) The Seller and the Servicer each hereby represents and warrants
to the Agent and each of the Banks that each of their respective
representations and warranties contained in Section 2.03, 2.04 and 3.03 of
the Agreement and in Article 3 of the Long-Term RPA is true and correct in
all material respects as of the date hereof and as of the date of each
Increase.
(b) Each of the Investor Master Custodial Certificateholder(s) in
whose name the Investor Master Custodial Certificates issued pursuant to
the Series 1992-1 Supplement to the Agreement are registered and the
registered holders of securities issued by the Investor Master Custodial
Certificateholder(s) in whose name the Investor Master Custodial
Certificates issued pursuant to the Series 1992-1 Supplement to the
Agreement are registered has been and will be at all material times at
arm's length with CCCL within the meaning of the Income Tax Act (Canada).
A true and complete copy of each of the Agreement and the Series 1992-1
Supplement to the Agreement has been delivered to the Agent.
(c) No Receivable Transferred to the Custodian is at the time of
Transfer, or will be thereafter, subject to any right of rescission, set-
off, (other than in respect of a Dealer's Dealer Account) counterclaim, or
other defence (including defences arising out of violations of usury laws)
of the Dealer.
(d) True and complete copies of all agreements of the type referred
to in Subsection 11.01(h) of the Agreement have been delivered to the
Agent.
SECTION 8.2. Covenants of the Seller and CCCL. The Seller and
CCCL hereby covenant:
(a) that if at any time, the Agent is unable to obtain the names and
addresses of all Master Custodial Certificateholders under each
series supplement to the Agreement, and so advises CCCL, CCCL
will promptly obtain and provide such information to the Agent.
CCCL shall deal at arms' length with all Master Custodial
Certificateholders within the meaning of the Income Tax Act
(Canada); and
(b) that neither CCCL nor any Seller will modify any term or
provision of CCCL's standard forms of Floorplan Financing
Agreements or the Floorplan Financing Guidelines in use in Canada
in a manner which would materially and adversely affect the Bank
Series 1994-1 Certificateholders, and CCCL shall at any time and
from time to time upon the request of the Agent, provide to the
Agent summaries of the Floorplan Financing Guidelines and copies
of CCCL's standard forms of Floorplan Financing Agreements.
SECTION 8.3. Covenants of the Servicer. The Servicer hereby
covenants that:
(a) upon three Business Days' prior written notice, it shall allow
employees and agents of the Agent, acting at the request of any
Bank Series 1994-1 Certificateholder, during normal business
hours of the Servicer and without disruption of normal business
conducted by the Servicer, to initiate an audit of the Servicer
for the purpose of confirming compliance with the terms of the
Agreement and this Bank Series 1994-1 Supplement, which audit
shall be at the expense of the Servicer;
(b) it shall give prior notice to the Agent of the delegation of any
of its servicing, collection, enforcement or administrative
duties with respect to the Receivables; and
(c) if, at any time, none of then outstanding Series or Classes of
Master Custodial Certificates are being rated by a Rating Agency,
the condition set forth in Section 4.03(b)(iii)(z) of the
Agreement with respect to the Servicer's right to make monthly
deposits of Collections into the Collection Account shall not be
applicable, and any change in the frequency of deposits of
Collections shall be subject to the prior written consent of the
Agent; provided, however, that such consent will not be required
so long as the Servicer shall have delivered to the Custodian a
written confirmation from each of the Rating Agencies by which
debt securities issued by Specified Holders (as hereinafter
defined) of Investor Master Custodial Certificates are then being
rated to the effect that the failure of the Servicer to make
deposits in accordance with Section 4.03(a) of the Agreement
shall not result in a reduction or withdrawal of such rating. For
the purposes of this Section 8.3(c), a "Specified Holder" is a
body corporate the only or principal asset of which is one or
more Master Custodial Certificates where the rating assigned by a
Rating Agency to the debt securities of such body corporate could
reasonably be regarded as reflecting the Rating Agency's
assessment of the value and risk of such Master Custodial
Certificate or Certificates.
ARTICLE IX
Final Distributions
SECTION 9.1. Sale of Bank Series 1994-1 Certificateholders'
Interest Pursuant to Section 2.03 of the Agreement; Distributions Pursuant
to Section 9.1 of this Bank Series 1994-1 Supplement or Section 2.03 or
12.02(c) of the Agreement.
(a) The amount to be paid by the Seller to the Collection Account
with respect to the Bank Series 1994-1 in connection with a purchase of the
Bank Series 1994-1 Certificateholders' Interest pursuant to Section 2.03 of
the Agreement shall equal the Reassignment Amount for the Distribution Date
on which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 2.03 of the Agreement or any Bank
Series 1994-1 Termination Proceeds deposited into the Collection Account
pursuant to Section 12.02(c) of the Agreement, the Custodian shall, upon
receipt of written instructions from the Servicer, not later than 12:00
noon, Toronto time, on the Distribution Date on which such amounts are
deposited (or, if such date is not a Distribution Date, on the immediately
following Distribution Date) in the priority set forth below: (i) first,
distribute the amount deposited, up to the Reassignment Amount to the Bank
Series 1994-1 Certificateholders and (ii) second, pay the remainder of any
Termination Proceeds to the Seller.
(c) Notwithstanding anything to the contrary in this Bank Series
1994-1 Supplement or the Agreement, any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Agreement with respect to the Bank Series 1994-1.
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Ratification of Agreement. As supplemented by
this Bank Series 1994-1 Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Bank
Series 1994-1 Supplement shall be read, taken and construed as one and the
same instrument.
SECTION 10.2. Counterparts. This Bank Series 1994-1 Supplement
may be executed in two or more counterparts (and by different parties on
separate counterparts) each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 10.3. Governing Law. This Bank Series 1994-1 Supplement
shall be construed in accordance with the laws of Province of Ontario and
the laws of Canada applicable therein, 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 10.4. Notices. All notices, requests and demands to or
upon any of the Seller, the Servicer, the Agent and the Bank Series 1994-1
Certificateholders shall be delivered in accordance with Section 10.2 of
the Long-Term RPA.
SECTION 10.5. Successors and Assigns.
(a) This Bank Series 1994-1 Supplement shall be binding upon and
enure to the benefit of the parties hereto and their respective successors
and assigns.
(b) Each Bank Series 1994-1 Certificateholder may only sell its Bank
Invested Amount in accordance with the terms hereof and of the Long-Term
RPA.
SECTION 10.6. Rights of Bank Series 1994-1 Certificateholders.
The Bank Series 1994-1 Certificates evidence undivided ownership interests
in the Purchased Property only and do not evidence any interest in or
obligation of the Seller or the Custodian. The Bank Series 1994-1
Certificates shall not evidence any interest in the Series Accounts or
Enhancement for the benefit of any other Series or Class. The Bank Series
1994-1 Certificates evidence undivided ownership interests in the Purchased
Property which include the right to receive, to the extent necessary to
make the required payments with respect to the Bank Series 1994-1
Certificates at the times and in the amounts specified in this Bank Series
1994-1 Supplement, the portion of the Collections allocable to the Bank
Series 1994-1 Certificateholders pursuant to the Agreement and this Bank
Series 1994-1 Supplement, funds on deposit in the Collection Account
allocable to the Bank Series 1994-1 Certificateholders pursuant to the
Agreement and this Bank Series 1994-1 Supplement and funds on deposit in
the Reserve Fund.
SECTION 10.7. Custodian's Communications. The Agent has been
designated and appointed by the Bank Series 1994-1 Certificateholders
pursuant to the Long-Term RPA. Notwithstanding any other provision of this
Bank Series 1994-1 Supplement to the contrary, the Custodian shall not be
obligated to communicate with or make distributions to individual Bank
Series 1994-1 Certificateholders, but instead shall be entitled to deal
exclusively with the Agent for the Bank Series 1994-1 Certificateholders.
SECTION 10.8. Amendments. Notwithstanding Section 13.01 of the
Agreement, any amendment to this Bank Series 1994-1 Supplement shall also
comply with the requirements of Article 10 of the Long-Term RPA.
ARTICLE XI
Conditions Precedent
SECTION 11.1. Conditions Precedent to Effectiveness of
Supplement. This Bank Series 1994-1 Supplement will become effective on
the date (the "Effective Date") that the Agent shall have received:
(a) Documents.
(i) A copy of the Long-Term RPA executed by a duly authorized
officer of the Seller and certified by a Responsible Officer
of the Seller,
(ii) this Bank Series 1994-1 Supplement executed by a duly
authorized officer of each of the Seller and the Custodian,
(iii) the Bank Series 1994-1 Certificates executed by and
authenticated by the Custodian, and
(iv) a copy of the 1993 Termination Agreement executed by a duly
authorized officer of each of the Seller, the Custodian and
Chrysler Financial Corporation.
(b) Legal Opinions. A legal opinion of Gowling, Strathy & Henderson,
counsel to the Seller and the Servicer, dated the Effective Date, in
substantially the form of Schedule 4.1(m)(ii) to the Long-Term RPA;
(c) Bank Series 1994-1 Early Amortization Events. A certificate of a
Responsible Officer of the Seller that no Bank Series 1994-1 Early
Amortization Event and no event which, with the lapse of time or the giving
of notice or both, or the satisfaction of any other condition, would be a
Bank Series 1994-1 Early Amortization Event, has occurred and is
continuing;
(d) Conditions to Issuance of Bank Series 1994-1 Certificates. A
certificate of a Responsible Officer of the Seller that the conditions to
the issuance of the Bank Series 1994-1 Certificates set forth in the
Agreement have been satisfied; and
(e) Long-Term RPA Conditions. The conditions precedent set forth in
Section 4.1 of Long-Term RPA (excluding the condition that this Bank Series
1994-1 Supplement be effective) shall have been satisfied and the Agent
shall have received a Certificate of a Responsible Officer of the Seller
that the conditions to the effectiveness of the Long-Term RPA set forth
therein (excluding the condition that this Bank Series 1994-1 Supplement be
effective) have been satisfied.
IN WITNESS WHEREOF, the parties hereto have caused this Bank
Series 1994-1 Supplement to be duly executed by their respective officers
as of the day and year first above written.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P, Corp.Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir. Auto. Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-2009
Telex: 06-524712
BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P, Corp. & Invst. Bkng. Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259 Title: Vice President
Telecopier: 416-594-2266
Telex: 06-218241
CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: Vice President
Toronto, Ontario
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
SWISS BANK CORPORATION
(CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Associate Dir. Mrch.
Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Merch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
THE ROYAL TRUST COMPANY,
Custodian
By: "Edward Fujisawa"
Title: Senior Solicitor
Exhibit 10-P
CONFORMED COPY
______________________________________________________________________________
______________________________________________________________________________
CHRYSLER CREDIT CANADA LTD.
Seller and Servicer
and
ROYAL BANK OF CANADA
Agent
and
THE SEVERAL BANKS PARTIES HERETO
Certificateholders
and
THE ROYAL TRUST COMPANY
Custodian
_____________________________
BANK SERIES 1994-2 SUPPLEMENT
Dated as of May 23, 1994
to
MASTER CUSTODIAL AND SERVICING AGREEMENT
Dated as of September 1, 1992
_____________________________
BANK SERIES 1994-2
_____________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Creation of the Bank Series 1994-2
Master Custodial Certificates, Series 1994-2
SECTION 1.1. Designation. . . . . . . . . . . . . . . . . . . . . .- 1 -
ARTICLE II
Interpretation
SECTION 2.1. Definitions. . . . . . . . . . . . . . . . . . . . . .- 2 -
SECTION 2.2. Other Interpretive Provisions. . . . . . . . . . . . .- 19 -
ARTICLE III
The Bank Series 1994-2 Certificates
SECTION 3.1. Purchases of the Bank Series 1994-2 Certificates . . .- 20 -
SECTION 3.2. Procedure for Increasing the Invested Amount . . . . .- 20 -
SECTION 3.3. Procedure for Decreasing the Aggregate Bank Series
1994-2 Invested Amount . . . . . . . . . . . . . . . .- 23 -
SECTION 3.4. Yield. . . . . . . . . . . . . . . . . . . . . . . . .- 23 -
SECTION 3.5. Changes in Available Subordinated Amount . . . . . . .- 24 -
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation . . . . . . . . . . . . . . . .- 24 -
ARTICLE V
Rights of Bank Series 1994-2 Certificateholders and Allocation and
Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections. . .- 25 -
SECTION 5.2. Yield. . . . . . . . . . . . . . . . . . . . . . . . .- 27 -
SECTION 5.3. Determination of Monthly Principal . . . . . . . . . .- 30 -
SECTION 5.4. Establishment of Reserve Fund. . . . . . . . . . . . .- 30 -
SECTION 5.5. Deficiency Amount. . . . . . . . . . . . . . . . . . .- 32 -
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller's Non-Principal Collections,
Investment Proceeds and Available Bank Principal
Collections. . . . . . . . . . . . . . . . . . . . . .- 33 -
SECTION 5.7. Distributions to Bank Series 1994-2 Certificate-
holders. . . . . . . . . . . . . . . . . . . . . . . .- 34 -
SECTION 5.8. Application of Reserve Fund and Available
Subordinated Amount. . . . . . . . . . . . . . . . . .- 34 -
SECTION 5.9. Bank Charge-Offs . . . . . . . . . . . . . . . . . . .- 36 -
SECTION 5.10. Excess Income. . . . . . . . . . . . . . . . . . . . .- 36 -
SECTION 5.11. Excess Principal Collections.. . . . . . . . . . . . .- 36 -
SECTION 5.12. Allocations and Applications of Collections and
Other Funds. . . . . . . . . . . . . . . . . . . . . .- 37 -
ARTICLE VI
Distributions and Reports
to Bank Series 1994-2 Certificateholders
SECTION 6.1. Distributions. . . . . . . . . . . . . . . . . . . . .- 37 -
SECTION 6.2. Daily Reports. . . . . . . . . . . . . . . . . . . . .- 38 -
SECTION 6.3. Periodic Reports.. . . . . . . . . . . . . . . . . . .- 38 -
(a) Distribution Date Statements. . . . . . . . . . . . . . . .- 38 -
(b) Monthly Certificateholders' Statement.. . . . . . . . . . .- 39 -
(c) Bank Series 1994-2 Early Amortization Period Notices. . . .- 39 -
(d) Annual Tax Statement. . . . . . . . . . . . . . . . . . . .- 39 -
(e) Tax Information.. . . . . . . . . . . . . . . . . . . . . .- 39 -
ARTICLE VII
Amortization Events
SECTION 7.1 Additional Amortization Events . . . . . . . . . . . .- 40 -
SECTION 7.2. Notice of Bank Series 1994-2 Early Amortization
Event. . . . . . . . . . . . . . . . . . . . . . . . .- 40 -
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.1. Representations and Warranties of the Seller and
the Servicer . . . . . . . . . . . . . . . . . . . . .- 41 -
SECTION 8.2. Covenants of the Seller and CCCL . . . . . . . . . . .- 41 -
SECTION 8.3. Covenants of the Servicer. . . . . . . . . . . . . . .- 42 -
ARTICLE IX
Final Distributions
SECTION 9.1. Sale of Bank Series 1994-2 Certificateholders'
Interest Pursuant to Section 2.03 of the Agreement;
Distributions Pursuant to Section 9.1 of this Bank
Series 1994-2 Supplement or Section 2.03 or 12.02(c)
of the Agreement . . . . . . . . . . . . . . . . . . . . . . .- 43 -
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Ratification of Agreement. . . . . . . . . . . . . . .- 43 -
SECTION 10.2. Counterparts . . . . . . . . . . . . . . . . . . . . .- 43 -
SECTION 10.3. Governing Law. . . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 10.4. Notices. . . . . . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 10.5. Successors and Assigns . . . . . . . . . . . . . . . .- 44 -
SECTION 10.6. Rights of Bank Series 1994-2 Certificateholders. . . .- 44 -
SECTION 10.7. Custodian's Communications.. . . . . . . . . . . . . .- 44 -
SECTION 10.8. Amendments.. . . . . . . . . . . . . . . . . . . . . .- 44 -
ARTICLE XI
Conditions Precedent
SECTION 1.1. Conditions Precedent to Effectiveness of Supplement. .- 45 -
(a) Documents.. . . . . . . . . . . . . . . . . . . . . . . . .- 45 -
(b) Legal Opinions. . . . . . . . . . . . . . . . . . . . . . .- 45 -
(c) Bank Series 1994-2 Early Amortization Events. . . . . . . .- 45 -
(d) Conditions to Issuance of Bank Series 1994-2
Certificates. . . . . . . . . . . . . . . . . . . . . . . .- 45 -
(e) Short-Term RPA Conditions.. . . . . . . . . . . . . . . . .- 45 -
SCHEDULE 1 RESERVE FUND . . . . . . . . . . . . . . . . . . . . .- 52 -
EXHIBIT "A" BANK SERIES 1994-2 CERTIFICATES . . . . . . . . . . .- 53 -
EXHIBIT "B" DAILY REPORT. . . . . . . . . . . . . . . . . . . . .- 54 -
EXHIBIT "C" DISTRIBUTION DATE STATEMENT . . . . . . . . . . . . .- 55 -
EXHIBIT "D-1" MONTHLY CERTIFICATEHOLDERS' STATEMENT
(DURING REVOLVING PERIOD) . . . . . . . . . . . . . .- 56 -
EXHIBIT "D-2" MONTHLY CERTIFICATEHOLDERS' STATEMENT
(DURING BANK SERIES 1994-2 EARLY AMORTIZATION
PERIOD). . . . . . . . . . . . . . . . . . . . . . . .- 57 -
EXHIBIT "E" OPINION OF COUNSEL TO SELLER ON INCREASE DATE . . . .- 58 -
<PAGE>
BANK SERIES 1994-2 SUPPLEMENT dated as of May 23, 1994
(the "Bank Series 1994-2 Supplement"), between CHRYSLER
CREDIT CANADA LTD., a Canadian corporation, as Seller and
Servicer, THE ROYAL TRUST COMPANY, a trust company existing
under the laws of Canada, as Custodian, the several banks
parties to this Bank Series 1994-2 Supplement and such other
Chartered Banks as may from time to time become parties
hereto (collectively the "Bank Series 1994-2 Certificate-
holders" and individually a "Bank Series 1994-2 Certificate-
holder") and Royal Bank of Canada, a Canadian chartered
bank, as agent for the Bank Series 1994-2 Certificateholders
(the "Agent").
Pursuant to Section 6.03 of the Master Custodial and Servicing
Agreement dated as of September 1, 1992 (the "Agreement"), among the
Seller, the Servicer and the Custodian, the Custodian may from time to time
issue one or more new Series of Investor Master Custodial Certificates
evidencing the undivided ownership interests in the Purchased Property
acquired by the Custodian as agent for and on behalf of the Holders of such
new Series of Investor Master Custodial Certificates. Pursuant to this
Bank Series 1994-2 Supplement, the Custodian shall create a new Series of
Investor Master Custodial Certificates and specify the Principal Terms
thereof.
In consideration of the payment by the Bank Series 1994-2
Certificateholders to the Custodian of the consideration in respect of the
Bank Series 1994-2 Investor Master Custodial Certificates and the purchase
from time to time of the undivided ownership interests in the Purchased
Property evidenced thereby, and the mutual agreements herein contained,
each party agrees as follows:
ARTICLE I
Creation of the Bank Series 1994-2
Master Custodial Certificates, Series 1994-2
SECTION 1.1. Designation.
(a) There is hereby created a Series of Investor Master
Custodial Certificates to be issued pursuant to the Agreement and this Bank
Series 1994-2 Supplement to be known as the "Master Custodial Certificates,
Bank Series 1994-2" (the "Bank Series 1994-2 Certificates").
(b) In the event that any term or provision contained herein
shall conflict with or be inconsistent with any terms or provisions
contained in the Agreement, the terms and provisions of this Bank Series
1994-2 Supplement shall govern.
(c) All capitalized terms not otherwise defined herein are
defined in the Agreement. All Article, Section or subsection references
herein shall mean Articles, Sections or subsections of this Bank Series
1994-2 Supplement, except as otherwise provided herein. The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Bank Series 1994-2 Supplement shall refer to this Bank Series 1994-2
Supplement as a whole and not to any particular provision hereof; and the
term "including" means "including without limitation".
ARTICLE II
Interpretation
SECTION 2.1. Definitions. Whenever used in this Bank Series
1994-2 Supplement the following words and phrases shall have the following
meanings. The following definitions 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.
(a) "Additional Yield" shall have the meaning specified in Section
5.2(b).
(b) "Agent" shall have the meaning specified in the preamble to this
Bank Series 1994-2 Supplement.
(c) "Aggregate Bank Series 1994-2 Invested Amount" (which for the
purposes of the Agreement is the Invested Amount with respect to the Bank
Series 1994-2) shall mean, as of any date, the sum of the Bank Invested
Amounts of all Bank Series 1994-2 Certificateholders on such date.
(d) "Agreement" shall have the meaning specified in the preamble to
this Bank Series 1994-2 Supplement.
(e) "Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of
(i) the Bank Series 1994-2 Allocation Percentage with respect to
such Collection Period and
(ii) the Defaulted Amount with respect to such Collection Period.
(f) "Allocable Miscellaneous Payments" shall mean, with respect to
any Distribution Date, the product of
(i) the Bank Series 1994-2 Allocation Percentage for the related
Collection Period and
(ii) Miscellaneous Payments with respect to the related
Collection Period.
(g) "Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of
(i) the Bank Series 1994-2 Allocation Percentage for the related
Collection Period and
(ii) the aggregate amount of Collections of Non-Principal
Receivables relating to such Deposit Date.
(h) "Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of
(i) the Bank Series 1994-2 Allocation Percentage for the related
Collection Period and
(ii) the aggregate amount of Collections of Principal Receivables
relating to such Deposit Date.
(i) "Available Bank Principal Collections" shall mean, with respect
to any Distribution Date, the sum of
(i) an amount equal to Bank Principal Collections for such
Distribution Date,
(ii) Allocable Miscellaneous Payments with respect to such
Distribution Date,
(iii) Bank Series 1994-2 Excess Principal Collections on deposit
in the Collection Account for such Distribution Date and
(iv) for a Distribution Date which is also the Termination Date,
any funds in the Reserve Fund after giving effect to
Section 5.8 of this Bank Series 1994-2 Supplement.
(j) "Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of
(i) the Available Seller's Non-Principal Collections for such
Deposit Date and
(ii) the Available Seller's Principal Collections for such
Deposit Date.
(k) "Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying
(i) the excess of
(A) the Seller's Percentage for the related Collection
Period
over
(B) the Excess Seller's Percentage for such Collection
Period
by
(ii) Allocable Non-Principal Collections for such Deposit Date.
(l) "Available Seller's Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying
(i) the excess of
(A) the Seller's Percentage for the related Collection
Period
over
(B) the Excess Seller's Percentage for such Collection
Period
by
(ii) Allocable Principal Collections for such Deposit Date.
(m) "Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Required Subordinated Amount. The
Available Subordinated Amount for any subsequent Determination Date shall
mean an amount equal to
(i) the Available Subordinated Amount for the preceding
Determination Date,
minus
(ii) the Incremental Subordinated Amount for such preceding
Determination Date,
minus
(iii) the Required Subordination Draw Amount with respect to the
preceding Distribution Date to the extent provided in
Section 5.8,
minus
(iv) withdrawals from the Reserve Fund pursuant to Section 5.8 on
the preceding Distribution Date to make distributions
pursuant to Section 5.6(a)(iii) (but excluding any other
withdrawals from the Reserve Fund),
plus
(v) the portion of Excess Income for such preceding Distribution
Date distributed to the Seller pursuant to Section 5.10(c),
plus
(vi) the Incremental Subordination Amount for the current
Determination Date;
plus
(vii) the amount of any increase in the Available Subordinated
Amount pursuant to Section 3.5 effected in the period from
the immediately preceding Determination Date to and
including the current Determination Date, and
minus
(viii) the amount of any decrease in the Available Subordinated
Amount pursuant to Section 3.3 effected on the immediately
preceding Distribution Date;
provided that
(A) the Available Subordinated Amount may be increased on
any Determination Date by the Seller, in its sole
discretion, by notice to the Custodian and the Agent,
on or before any such Determination Date; and
(B) provided, that, on any date, the Available Subordinated
Amount shall not exceed an amount equal to the sum of
(ix) the product of the Subordinated Percentage and the Aggregate
Bank Series 1994-2 Invested Amount on such date (after
giving effect to any reduction to be made therein on the
immediately following Distribution Date; and
(x) the Incremental Subordinated Amount, if any, with respect to
the preceding Determination Date;
provided, however, that once any Bank Series 1994-2 Early Amortization
Period (other than a Bank Series 1994-2 Early Amortization Period which has
ended as described in clause (c) of the definition of Bank Series 1994-2
Early Amortization Period) shall have commenced, the Available Subordinated
Amount shall be calculated based on the Aggregate Bank Series 1994-2
Invested Amount as of the close of business on the day preceding the
commencement of such Bank Series 1994-2 Early Amortization Period.
(n) "BA Tranche" shall mean the portion of the Aggregate Bank Series
1994-2 Invested Amount the rate of return on which the Seller has elected
to have based on one or more Wholesale Bankers' Acceptance Rates in
accordance with the procedure specified herein.
(o) "Bank Charge-Offs" shall have the meaning specified in Section 5.9.
(p) "Bank Defaulted Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of
(i) the Allocable Defaulted Amount for the related Collection
Period and
(ii) the Floating Allocation Percentage for the related
Collection Period.
(q) "Bank Invested Amount" shall mean, when used with respect to any
Bank Series Certificateholder and as of any date, an amount equal to
(i) its Purchase Percentage of the Initial Aggregate Bank Series
1994-2 Invested Amount,
plus
(ii) its Purchase Percentage of the aggregate amount of Increases
made pursuant to Section 3.2 of this Bank Series 1994-2
Supplement since the Effective Date to and including such
first mentioned date,
minus
(iii) the aggregate amount of distributions to such Bank Series
1994-2 Certificateholder pursuant to Sections 5.6(b) or
5.6(c) since the Effective Date to and including such first
mentioned date,
minus
(iv) the product of
(A) such Bank Series 1994-2 Certificateholder's Purchase
Percentage and
(B) the excess, if any, of the aggregate amount of Bank
Charge-Offs over the aggregate amount of Bank Charge-
Offs reimbursed pursuant to Section 5.9 on or before
such date.
(r) "Bank Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of
(i) the Floating Allocation Percentage for the related
Collection Period and
(ii) Allocable Non-Principal Collections deposited in the
Collection Account for the related Collection Period.
(s) "Bank Principal Collections" shall mean, with respect to any
Distribution Date, the sum of
(i) the product of
(A) the Floating Allocation Percentage, with respect to the
Revolving Period, or the Principal Allocation
Percentage, with respect to a Bank Series 1994-2 Early
Amortization Period, for the related Collection Period
(or any partial Collection Period which occurs as the
first Collection Period during a Bank Series 1994-2
Early Amortization Period) and
(B) Allocable Principal Collections deposited in the
Collection Account for the related Collection Period
(or any partial Collection Period which occurs as the
first Collection Period during an Bank Series 1994-2
Early Amortization Period) and
(ii) the amount, if any, of Collections of Non-Principal
Receivables, Excess Income and Available Seller's
Collections which this Bank Series 1994-2 Supplement
provides are to be treated as a portion of Bank Principal
Collections, including pursuant to Section 5.6(a)(iii),
5.8(b) and 5.10(a), on such Distribution Date.
(t) "Bank Series 1994-2" shall mean the Series of Investor Master
Custodial Certificates the terms of which are specified in this Bank Series
1994-2 Supplement.
(u) "Bank Series 1994-2 Adjusted Invested Amount" shall mean the
Series Adjusted Invested Amount with respect to the Bank Series 1994-2.
(v) "Bank Series 1994-2 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to the Bank Series 1994-2.
(w) "Bank Series 1994-2 Certificate Rate" shall mean, with respect to
any Yield Period, the Blended Wholesale Rate with respect to such Yield
Period.
(x) "Bank Series 1994-2 Certificateholders" shall mean the Holders of
the Bank Series 1994-2 Certificates.
(y) "Bank Series 1994-2 Certificateholders' Interest" shall mean that
portion of the Master Custodial Certificateholders' Interest evidenced by
the Bank Series 1994-2 Certificates.
(z) "Bank Series 1994-2 Certificates" shall mean any one of the
Master Custodial Certificates, Series 1994-2, executed and authenticated by
the Custodian, substantially in the form of Exhibit A.
(aa) "Bank Series 1994-2 Early Amortization Event" shall mean any
Early Amortization Event specified in Section 9.01 of the Agreement,
together with any additional Early Amortization Event specified in
Section 7.1 of this Bank Series 1994-2 Supplement.
(ab) "Bank Series 1994-2 Early Amortization Period" shall mean an
Early Amortization Period with respect to the Bank Series 1994-2.
(ac) "Bank Series 1994-2 Excess Principal Collections" shall have the
meaning specified in Section 5.11(b).
(ad) "Bank Series 1994-2 Monthly Servicing Fee" shall have the meaning
specified in Section 4.1.
(ae) "Bank Series 1994-2 Principal Shortfall" shall have the meaning
specified in Section 5.11(b).
(af) "Bank Series 1994-2 Supplement" shall mean this Bank Series 1994-2
Supplement as amended, modified or supplemented from time to time.
(ag) "Bank Series 1994-2 Termination Proceeds" shall mean any
Termination Proceeds arising out of a sale of Receivables (or interests
therein) pursuant to Section 12.02(c) of the Agreement with respect to the
Bank Series 1994-2.
(ah) "Blended Wholesale Rate" shall mean, with respect to any Yield
Period, the rate per annum which is the sum of:
(i) the product obtained by multiplying the Wholesale Prime Rate with
respect to such Yield Period by the decimal equivalent of the
fraction of the Aggregate Bank Series 1994-2 Invested Amount not
allocated to the BA Tranche for such Yield Period, and
(ii) an amount equal to the sum of
(x) the sum of the products obtained by multiplying the
Wholesale Bankers' Acceptance Rate for each particular
specified term (the "Specified Wholesale Bankers' Acceptance
Rate") by a fraction the numerator of which is that portion
of the Aggregate Bank Series 1994-2 Invested Amount
allocated to each such Specified Wholesale Bankers'
Acceptance Rate within the BA Tranche in respect of such
Yield Period and the denominator of which is the Aggregate
Bank Series 1994-2 Invested Amount, and
(y) the positive difference between 0.625% and the Short-Term
Facility Fee Percentage (which difference is 0.4750%).
(ai) "CDOR Rate" means, on any date, the annual rate of interest which
is the rate based on an average 30 day rate applicable to Canadian Dollar
bankers' acceptances appearing on the "Reuters Screen CDOR Page" (as
defined in the International Swap Dealer Association, Inc. definitions, as
modified and amended from time to time) as of 10:00 a.m. Toronto time on
such day, or if such day is not a Business Day then on the immediately
preceding Business Day; provided, however, if such rates do not appear on
the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any day
shall be calculated as the arithmetic mean of the 30 day rates applicable
to Canadian Dollar bankers' acceptances quoted by four major Canadian
Schedule I chartered banks as of 10:00 am. on such day, or if such day is
not a Business Day, then on the immediately preceding Business Day.
Initially, the four major Canadian Schedule I chartered banks will be Bank
of Montreal, The Bank of Nova Scotia, Royal Bank of Canada and Canadian
Imperial Bank of Commerce. If less than four of the institutions described
in the immediately preceding sentence quote the afore-mentioned rate on the
days and at the times described above, the "CDOR Rate" shall be such other
rate or rates as the parties may agree.
(aj) "Certificateholder's Banker's Acceptance Rate" based on discount
bankers' acceptances shall mean the rate per annum from time to time
notified by the Certificateholder to the Agent and the Seller as being the
sum of
(i) the rate per annum then in effect for determining discounts
on such Canadian dollar bankers' acceptances accepted by the
Certificateholder in Canada and held for its own account
(such rates to be exclusive of any reserve costs) plus, if
applicable,
(ii) a percentage, expressed as a decimal, established by the
Certificateholder at such time, such percentage not to
exceed the percentage which represents the effective cost to
the Certificateholder of the aggregate of all primary,
secondary and other reserve requirements which are
applicable to Canadian dollar deposits accepted by such
Certificateholder in Canada for a term approximating the
maturity period for such bankers' acceptances and which are
in effect at such time.
(ak) "Chartered Bank" means a bank named on Schedule I or Schedule II
to the Bank Act (Canada).
(al) "Custodial Available Subordinated Amount" means the sum of the
Available Subordinated Amount and the sum of the aggregate "available
subordinated amounts" for and as that term may be defined in respect of all
other outstanding Series.
(am) "Daily Report" shall mean a report prepared by the Servicer
pursuant to Section 6.2 on each Business Day for the period specified
therein, in substantially the form of Exhibit B or in such other form as
may be approved by the Agent and the Servicer.
(an) "Daily Wholesale Prime Rate Yield Amount" shall mean, for any day
in any Yield Period, the product of
(i) the portion of the Aggregate Bank Series 1994-2 Invested
Amount not allocated to the BA Tranche on such day divided
by 365 (or 366 in leap years) and
(ii) the Wholesale Prime Rate with respect to that Yield Period.
(ao) "Dealer Rate" shall mean, as of any date, the rate at which
interest on Principal Receivables is being collected from Dealers on such
date.
(ap) "Decrease" shall have the meaning specified in Section 3.3 of
this Bank Series 1994-2 Supplement.
(aq) "Deficiency Amount" shall have the meaning specified in
Section 5.5.
(ar) "Distribution Date Statement" shall mean a report prepared by the
Servicer pursuant to Section 6.3(a) on each Determination Date for the
immediately preceding Collection Period, in substantially the form of
Exhibit C or in such other form as may be approved by the Agent and the
Servicer.
(as) "Effective Date" shall have the meaning specified in Section 11.1.
(at) "Excess Income" shall mean, with respect to any Distribution
Date, the amount, if any, determined pursuant to Section 5.6(a)(v) with
respect to such Distribution Date.
(au) "Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than
0% nor more than 100%) equal to
(i) 100% minus, when used with respect to Non-Principal
Receivables and Defaulted Receivables and Principal
Receivables during the Revolving Period, the sum of
(A) the Floating Allocation Percentage with respect to such
Collection Period and
(B) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount
as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination
Date) and
the denominator of which is the product of
(C) the Pool Balance as of the last day of the immediately
preceding Collection Period and
(D) the Bank Series 1994-2 Allocation Percentage with
respect to the Collection Period in respect of which
the Excess Seller's Percentage is being calculated
or
(ii) 100% minus, when used with respect to Principal Receivables
during a Bank Series 1994-2 Early Amortization Period, the
sum of
(A) the Principal Allocation Percentage with respect to
such Collection Period and
(B) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount
as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination
Date) and
the denominator of which is the product of
(C) the Pool Balance as of the last day of such immediately
preceding Collection Period and
(D) the Bank Series 1994-2 Allocation Percentage with
respect to the Collection Period in respect of which
the Excess Seller's Percentage is being calculated.
(av) "Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Aggregate Bank
Series 1994-2 Invested Amount as of the last day of the immediately
preceding Collection Period and the denominator of which is the product of
(i) the Pool Balance as of such last day; and
(ii) the Bank Series 1994-2 Allocation Percentage with respect to
the Collection Period in respect of which the Floating
Allocation Percentage is being calculated.
(aw) "Increase" shall have the meaning specified in subsection 3.2(a).
(ax) "Increase Amount" shall mean, with respect to any Increase Date,
the amount of the Increase in the Aggregate Bank Series 1994-2 Invested
Amount on such date.
(ay) "Increase Date" shall have the meaning specified in subsection
3.2(a).
(az) "Incremental Subordinated Amount" shall mean, with respect to any
Determination Date, the result obtained by multiplying
(i) a fraction, the numerator of which is the sum of
(A) the Aggregate Bank Series 1994-2 Invested Amount on the
last day of the Collection Period immediately preceding
such Determination Date and
(B) the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such Determination
Date as described in clause (f) of the definition
thereof)
and the denominator of which is the Pool Balance on the last
day of the Collection Period immediately preceding the
Collection Period to which such Determination Date relates by
(ii) the Custodial Incremental Subordinated Amount.
(ba) "Initial Aggregate Bank Series 1994-2 Invested Amount" shall mean $0.
(bb) "Initial Invested Amount" shall mean, with respect to the Bank
Series 1994-2,
(i) with respect to any Collection Period relating to the
Revolving Period, an amount equal to the sum of
(A) the Initial Aggregate Bank Series 1994-2 Invested
Amount
plus
(B) the aggregate amount of Increases pursuant to Section
3.2 of this Bank Series 1994-2 Supplement made during
or prior to such Collection Period
minus
(C) the aggregate amount of distributions pursuant to
Section 5.6(b) or 5.6(c) of this Bank Series 1994-2
Supplement made or to be made on the Distribution Date
occurring in such Collection Period or made on prior
Distribution Dates and
(ii) as of any date during any Bank Series 1994-2 Early
Amortization Period, the Initial Invested Amount as of the
last day of the Revolving Period.
(bc) "Investment Proceeds" shall mean, with respect to any
Determination Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Fund,
together with an amount equal to the Bank Series 1994-2 Allocation
Percentage of the interest and other investment earnings on funds held in
the Collection Account credited to the Collection Account pursuant to
Section 4.02 of the Agreement.
(bd) "Monthly Certificateholders' Statement" shall mean a report
prepared by the Servicer pursuant to Section 6.3(b) with respect to each
Distribution Date for the immediately preceding Collection Period, during
the Revolving Period, in substantially the form of Exhibit D-1 and, during
a Bank Series 1994-2 Early Amortization Period, in substantially the form
of Exhibit D-2 or in such other forms as may be approved by the Agent and
the Servicer.
(be) "Monthly Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Collections of Principal Receivables
for such Collection Period by the average daily Pool Balance for such
Collection Period.
(bf) "Monthly Principal" shall have the meaning specified in Section 5.3.
(bg) "Monthly Servicing Fee" shall have the meaning specified in
Section 4.1.
(bh) "1993 Termination Agreement" shall have the meaning specified in
the Short-Term RPA.
(bi) "Pre-Yield Period Deposit" shall have the meaning specified in
Section 3.2(b)(v).
(bj) "Prime Rate" means on any day the greater of (i) the annual rate
of interest announced from time to time by the Agent as its reference rate
then in effect for determining interest rates on Canadian dollar
denominated commercial loans in Canada and (ii) the annual rate of interest
equal to the sum of (A) the CDOR Rate and (B) 1% per annum.
(bk) "Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Aggregate Bank
Series 1994-2 Invested Amount as of the last day of the Revolving Period
and the denominator of which is the product of
(i) the Pool Balance as of the last day of the immediately
preceding Collection Period and
(ii) the Bank Series 1994-2 Allocation Percentage with respect to
the Collection Period in respect of which the Principal
Allocation Percentage is being calculated;
provided, however, that with respect to that portion of any Collection
Period that falls after the date on which a Bank Series 1994-2 Early
Amortization Event occurs (other than (i) a Bank Series 1994-2 Early
Amortization Event which has resulted in a Bank Series 1994-2 Early
Amortization Period which has ended as described in clause (c) of the
definition of Bank Series 1994-2 Early Amortization Period or (ii) a Bank
Series 1994-2 Early Amortization Event which has resulted in a Bank Series
1994-2 Early Amortization Period which has ended and which has been
followed by a recommenced Revolving Period pursuant to the last proviso in
the definition of Revolving Period), the Principal Allocation Percentage
shall be reset using the Pool Balance as of the close of business on the
date on which such Bank Series 1994-2 Early Amortization Event shall have
occurred and Collections of Principal Receivables shall be allocated for
such portion of such Collection Period using such reset Principal
Allocation Percentage.
(bl) "Purchase Percentage" shall have the meaning specified in the
Short-Term RPA.
(bm) "Purchase Price" shall have the meaning specified in Section 3.2(a).
(bn) "Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the
Aggregate Bank Series 1994-2 Invested Amount on such Distribution Date,
(ii) accrued and unpaid Yield (calculated on the basis of the Aggregate
Bank Series 1994-2 Invested Amount at the Bank Series 1994-2 Certificate
Rate as in effect during the applicable Yield Periods) through the day
preceding such Distribution Date, and (iii) the amount of Additional Yield,
if any, for such Distribution Date and any Additional Yield previously due
but not distributed to the Bank Series 1994-2 Certificateholders on a prior
Distribution Date.
(bo) "Required Participation Percentage" shall mean, with respect to
the Bank Series 1994-2, 104%.
(bp) "Required Subordinated Amount" shall mean, as of any date of
determination, the sum of
(i) the product of
(A) the Subordinated Percentage and
(B) the Aggregate Bank Series 1994-2 Invested Amount on
such date and
(ii) the Incremental Subordinated Amount on the immediately
preceding Determination Date.
(bq) "Required Subordination Draw Amount" shall have the meaning
specified in Section 5.5.
(br) "Reserve Fund" shall have the meaning specified in Section 5.4(a).
(bs) "Reserve Fund Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which
(i) the Reserve Fund Required Amount for such Distribution Date
exceeds
(ii) the amount of funds in the Reserve Fund after giving effect
to any deposits thereto and withdrawals therefrom otherwise
to be made on such Distribution Date.
(bt) "Reserve Fund Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) 0.55% and (b) the
Aggregate Bank Series 1994-2 Invested Amount on such Distribution Date
(after giving effect to any deposits to and withdrawals from the Reserve
Fund on such Distribution Date).
(bu) "Revolving Period" shall mean the period beginning at the close
of business on the Effective Date and ending on the earlier of
(i) the last day of the Collection Period ending in April, 1994,
and
(ii) the close of business on the day a Bank Series 1994-2 Early
Amortization Period commences;
provided, however, that, if a Bank Series 1994-2 Early Amortization Period
ends as described in clause (c) of the definition of Bank Series 1994-2
Early Amortization Period, the Revolving Period will recommence as of the
close of business on the day such Bank Series 1994-2 Early Amortization
Period ends; provided, further that (i) if any Bank Series 1994-2 Early
Amortization Period has resulted from the occurrence of a Bank Series 1994-2
Early Amortization Event described in Section 7.1(e) of this Bank Series
1994-2 Supplement, (ii) no other Bank Series 1994-2 Early Amortization
Event shall have occurred and the scheduled termination of the Revolving
Period pursuant to clause (a) above shall not have occurred, (iii) the
Aggregate Bank Series 1994-2 Invested Amount shall have been reduced to
zero, and (iv) the Dealer Rate shall be greater than the Bank Series 1994-2
Certificate Rate, the Revolving Period shall recommence as of the close of
business on the date the conditions set forth in clauses (i), (ii), (iii)
and (iv) above shall have been satisfied.
(bv) "Sellers" shall mean CCCL and any Designated Affiliate which may
become an Additional Wholesale Seller (as defined in the Short-Term RPA)
from time to time.
(bw) "Seller's Collections" shall mean, with respect to any Collection
Period, the sum of
(i) the Seller's Percentage of Allocable Non-Principal
Collections for the related Collection Period, plus
(ii) the Seller's Percentage of Allocable Principal Collections
for the related Collection Period.
(bx) "Seller's Percentage" shall mean 100% minus
(i) the Floating Allocation Percentage, when used with respect
to Non-Principal Receivables and Defaulted Receivables and,
during the Revolving Period, Principal Receivables, and
(ii) the Principal Allocation Percentage, when used with respect
to Principal Receivables during any Bank Series 1994-2 Early
Amortization Period.
(by) "Service Default" shall have the meaning ascribed to it in
Section 10.01 of the Agreement and shall include a failure on the part of
the Servicer duly to observe or perform any of the covenants or agreements
of the Servicer set forth herein which has a material adverse effect on the
Bank Series 1994-2 Certificateholders and continues for a period of 30 days
after the date on which written notice of such failure requiring the same
to be remedied, shall have been given to the Servicer by the Agent.
(bz) "Servicing Fee Rate" shall mean, with respect to the Bank Series
1994-2 and with respect to any Distribution Date in respect of which a
Monthly Servicing Fee is payable, the rate determined pursuant to
Section 4.1 hereof, but not in excess of 1%.
(ca) "Short-Term Facility Fee Percentage" shall have the meaning
specified in the Short-Term RPA (being 0.15%).
(cb) "Short-Term RPA" shall mean the Short-Term Receivables Purchase
Agreement dated as of May 23, 1994, made among the Seller, CFC, the Agent
and the Bank Series 1994-2 Certificateholders.
(cc) "Subordinated Percentage" shall mean 9.45%.
(cd) "Termination Date" shall mean the date which is 24 months after
the last day of the final Revolving Period.
(ce) "Wholesale Bankers' Acceptance Rate" for any specified term shall
mean the rate per annum equal to the sum of the products obtained by
multiplying each Certificateholder's Bankers' Acceptance Rate for such term
by such Certificateholder's Purchase Percentage.
(cf) "Wholesale Prime Rate" shall mean with respect to each period
from and including an Increase Date or a Distribution Date, as the case may
be (in this definition, the "Prior Date"), to but not including the next
succeeding Distribution Date (in this definition, the "Current Date") the
rate per annum which is the sum of
(i) the product obtained by multiplying the Prime Rate in effect
on the last day of the calendar month next preceding the
Prior Date by a fraction, the numerator of which is the
number of days from and including the Prior Date to and
including the last day of the calendar month next preceding
the Current Date and the denominator of which is the number
of days from and including the Prior Date to but not
including the Current Date and
(ii) the product obtained by multiplying the Prime Rate in effect
on the last day of the calendar month next preceding the
Current Date by a fraction, the numerator of which is the
number of days from and including the first day of the
calendar month in which the Current Date occurs to but not
including the Current Date and the denominator of which is
the number of days from and including the Prior Date to but
not including the Current Date.
(cg) "Yield" shall have the meaning specified in Section 5.2(a).
(ch) "Yield Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding
such Distribution Date (or, in the case of the initial Distribution Date,
the Effective Date) to but excluding such Distribution Date. Yield will be
calculated on the basis of the actual number of days in each Yield Period
divided by 365 (or 366, in leap years).
(ci) "Yield Shortfall" shall have the meaning specified in
Section 5.2(b).
SECTION 2.2. Other Interpretive Provisions.
(a) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The
definitions in Section 2.1 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.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Bank Series 1994-2 Supplement shall refer to this
Bank Series 1994-2 Supplement as a whole and not to any particular
provision of this Bank Series 1994-2 Supplement; references to any Article,
Section or Exhibit are references to Articles, Sections and Exhibits in or
to this Bank Series 1994-2 Supplement unless otherwise specified; and the
term "including" means "including without limitation".
ARTICLE III
The Bank Series 1994-2 Certificates
SECTION 3.1. Purchases of the Bank Series 1994-2 Certificates.
Subject to the terms and conditions of this Bank Series 1994-2 Supplement
and the Short-Term RPA, each Bank Series 1994-2 Certificateholder hereby
severally agrees
(i) to purchase from the Seller, through the Custodian as agent
for and on behalf of each Bank Series 1994-2 Certificate-
holder, on the Effective Date an undivided ownership
interest in the Purchased Property to be evidenced by a Bank
Series 1994-2 Certificate for an amount equal to its
Purchase Percentage of the Initial Aggregate Bank Series
1994-2 Invested Amount;
(ii) to purchase and maintain, in accordance with the provisions
of this Bank Series 1994-2 Supplement, an undivided
ownership interest in the Purchased Property, subject to
increase or decrease during the Revolving Period, equal to
its Purchase Percentage of the Aggregate Bank Series 1994-2
Invested Amount;
(iii) to be bound by and have the benefit of the terms and
conditions of the Agreement and its Bank Series 1994-2
Certificate;
(iv) that the Custodian shall hold the said Purchased Property as
agent for and on behalf of each Bank Series 1994-2
Certificateholder and all other Master Custodial
Certificateholders as tenants in common and shall have the
authority, subject always to compliance with the Agreement,
to issue from time to time Master Custodial Certificates to
CCCL and other Persons who agree to purchase undivided
ownership interests as tenants in common in the Purchased
Property evidenced by Master Custodial Certificates; and
(v) that each Bank Series 1994-2 Certificateholder's rights as
the holder of a Bank Series 1994-2 Certificate and the
interest in the Purchased Property evidenced thereby are
governed by and may only be exercised in accordance with the
Agreement, this Bank Series 1994-2 Supplement and the Short-
Term RPA.
SECTION 3.2. Procedure for Increasing the Invested Amount.
(a) Subject to subsection 2.4 of the Short-Term RPA and
subsections 3.2(b) and 3.2(c), on any Business Day during the Revolving
Period, the Aggregate Bank Series 1994-2 Invested Amount may upon the
request of the Seller be increased (an "Increase") by requiring each Bank
Series 1994-2 Certificateholder to purchase an increase in its undivided
ownership interest in the Purchased Property and the Bank Invested Amount
of each Bank Series 1994-2 Certificateholder shall be increased
correspondingly by an amount equal to its Purchase Percentage of the
Increase upon payment to the Custodian of a purchase price (the "Purchase
Price") equal to such amount (each date on which an increase in the
Aggregate Bank Series 1994-2 Invested Amount occurs hereunder being herein
referred to as the "Increase Date" applicable to such Increase); provided
that CCCL shall have given the Agent irrevocable written notice (effective
upon receipt) of such request pursuant to subsection 2.4 of the Short-Term
RPA, and provided, further, that no more than one Increase shall be made
during any calendar month and that each Increase shall be in an amount of
at least $10,000,000.
(b) The obligation of the Bank Series 1994-2 Certificateholders
to make any Increase requested to be made on any Increase Date is subject
to satisfaction of the following conditions precedent on or before the
Increase Date:
(i) the Available Subordinated Amount shall be an amount greater
than or equal to the Required Subordinated Amount (after
giving effect to such Increase as though the Aggregate Bank
Series 1994-2 Invested Amount had been increased on the
preceding Determination Date);
(ii) no Bank Series 1994-2 Early Amortization Event and no event
which, with the lapse of time, the giving of notice, or
both, or the satisfaction of any other condition would be a
Bank Series 1994-2 Early Amortization Event, shall have
occurred and be continuing;
(iii) after giving effect to the Increase, the Pool Balance shall
be greater than or equal to the Required Participation
Amount as of the last day of the immediately preceding
Collection Period;
(iv) the conditions precedent set forth in Section 4.4 of the
Short-Term RPA shall have been satisfied;
(v) if such Increase takes place on or after the first day of
any calendar month and prior to the Distribution Date
occurring in such calendar month the Seller shall have
deposited in the Reserve Fund an amount (a "Pre-Yield Period
Deposit") equal to the Daily Wholesale Prime Rate Yield
Amount which would accrue with respect to such Increase for
the period from and including the date of such Increase to
but excluding such Distribution Date;
(vi) the amount on deposit in the Reserve Fund shall be greater
than or equal to the Reserve Fund Required Amount after
giving effect to such Increase;
(vii) after giving effect to the Increase, the Short-Term
Aggregate Invested Amount (as defined in the Short-Term RPA)
shall not exceed the Short-Term Aggregate Commitment Amount
(as defined in the Short-Term RPA);
(viii) the Custodian and the Agent shall have received a
Certificate of a Responsible Officer of the Seller stating
that the conditions set forth in this subsection 3.2(b) have
been satisfied;
(ix) the Agent shall have received the favourable written opinion
of counsel for the Seller, dated the relevant Increase Date,
substantially in the form of Exhibit E and covering such
other legal matters as the Agent or its counsel may
reasonably request;
(x) a certificate of a Responsible Officer of the Seller that
the Account Assets are free and clear of any Liens; and
(xi) a certificate executed by a Responsible Officer of the
Seller, dated the relevant Increase Date, to the effect that
all instruments required by applicable legislation to be
registered or filed in order to protect, perfect and
preserve the rights of the Bank Series 1994-2 Certificate-
holders in all the Purchased Property have been or will be,
within the time prescribed by the applicable legislation,
duly executed by the required parties thereto and registered
and filed in each appropriate office in each applicable
jurisdiction (which certificate shall also have annexed
thereto a schedule setting forth each such instrument and
each such office in which such registrations or filings have
been or will be made and such certificate shall also state
that such instruments are the only instrument required and
such offices are the only offices in which registration or
filing is required by applicable legislation in order to
protect, perfect and preserve the interest of the Bank
Series 1994-2 Certificateholders in such Purchased Property
against all creditors of and purchasers from the Seller).
(c) In the case of the first Increase requested to be made after
the Effective Date, the obligation of the Bank Series 1994-2 Certificate-
holders to make such Increase is subject to satisfaction of the conditions
precedent set forth in subsection 3.2(b) and subject to satisfaction of the
further following conditions precedent on or before such Increase Date:
(i) a certificate of a Responsible Officer of the Seller that
the Account Assets are free and clear of any Liens, which
certificate shall have attached thereto the results of
recent searches with respect to the Seller in each of the
Relevant Provinces; and
(ii) if the Seller has agreed to Transfer or has Transferred any
of its wholesale receivables (other than the Receivables) to
any Persons otherwise than pursuant to the Agreement and a
Supplement, the Custodian on behalf of the Bank Series 1994-2
Certificateholders shall have entered into such agreements
with such Persons as are required by and in accordance with
Section 11.01(h) of the Agreement; provided that in such
Section the term "co-ownership agreement" and "inter-
creditor agreement" shall be deemed to include inter-
purchaser and inter-transferee agreements.
(d) Payment by the Bank Series 1994-2 Certificateholders in
respect of any Increase shall be made by the Agent to the Custodian and the
Custodian hereby directs that such payment be made to the Seller.
SECTION 3.3. Procedure for Decreasing the Aggregate Bank Series
1994-2 Invested Amount. On any Distribution Date during the Revolving
Period, the Aggregate Bank Series 1994-2 Invested Amount may be reduced (a
"Decrease") upon request of the Seller by the distribution to the Agent on
behalf of the Bank Series 1994-2 Certificateholders of some or all of
Available Bank Principal Collections on such Distribution Date; provided
that the Seller shall have given the Agent irrevocable written notice
(effective upon receipt) prior to 12:00 Noon (Toronto Time) two Business
Days prior to the date of such Decrease stating the amount of such Decrease
and provided, further, that such Decrease shall be in an amount equal to or
greater than $1,000,000. The Available Subordinated Amount shall
simultaneously be reduced to an amount equal to the Required Subordinated
Amount after giving effect to such Decrease.
SECTION 3.4. Yield. Yield calculated at the rates and in the
manner provided for in Section 5.2 shall be payable on the Bank Series
1994-2 Certificates on each Distribution Date pursuant to Section 5.6.
Calculations of per annum rates and fees under this Bank Series 1994-2
Supplement shall be made on the basis of a 365 or 366 day year (as
applicable) for actual days elapsed. Any change in Yield payable hereunder
resulting from a change in the Wholesale Prime Rate shall become effective
as of the opening of business on the day on which such change is announced.
Whenever in respect of any Bank Series 1994-2 Certificate, the yield is
calculated on the basis of a 365 day year, the annual equivalent of such
rate is equal to the Bank Series 1994-2 Certificate Rate multiplied by 365
(or 366, in leap years) and divided by the actual number of days in the
calendar year.
SECTION 3.5. Changes in Available Subordinated Amount. The
Available Subordinated Amount may be increased on each Increase Date by the
Seller to the Required Subordinated Amount by notice to the Custodian and
the Agent on or before such Increase Date.
ARTICLE IV
Servicing Fee
SECTION 4.1. Servicing Compensation. A monthly servicing fee,
inclusive of applicable taxes, including goods and services tax, if any
(the "Monthly Servicing Fee"), shall be payable by the Bank Series 1994-2
Certificateholders and the Seller to any Successor Servicer, other than a
Successor Servicer which is an Affiliate of CCCL, in arrears, on each
Distribution Date in respect of any Collection Period (or portion thereof)
occurring prior to the Termination Date in an amount to be agreed upon by
the Successor Servicer and by the Custodian, as agent for and on behalf of
the Master Custodial Certificateholders; provided, however, that the
Monthly Servicing Fee shall not exceed an amount equal to one-twelfth of
the product of
(a) 1%,
(b) the Pool Balance as of the last day of the Collection Period
second preceding such Distribution Date and
(c) the Bank Series 1994-2 Allocation Percentage with respect to the
immediately preceding Collection Period.
No Monthly Servicing Fee shall be payable while CCCL or any Affiliate of
CCCL is the Servicer. The share of the Monthly Servicing Fee allocable to
the Bank Series 1994-2 Certificateholders with respect to any Distribution
Date (the "Bank Series 1994-2 Monthly Servicing Fee") shall be equal to
one-twelfth of the product of
(a) the Servicing Fee Rate and
(b) the Aggregate Bank Series 1994-2 Invested Amount as of the last
day of the Collection Period second preceding such Distribution
Date.
The remainder of the Monthly Servicing Fee shall be paid by the Seller and
in no event shall the Custodian or the Bank Series 1994-2 Certificate-
holders be liable for the share of the Monthly Servicing Fee to be paid by
the Seller; and the remainder of the Servicing Fee shall be paid by the
Seller and the Investor Master Custodial Certificateholders of other Series
and the Bank Series 1994-2 Certificateholders shall in no event be liable
for the share of the Servicing Fee to be paid by the Seller or the Investor
Master Custodial Certificateholders of other Series. The Bank Series 1994-2
Monthly Servicing Fee shall be payable to the Servicer solely to the
extent amounts are available for distribution in accordance with the terms
of this Bank Series 1994-2 Supplement.
Any Successor Servicer will be permitted, in its sole discretion,
to waive the Monthly Servicing Fee, if any, for any Distribution Date by
notice to the Custodian on or before the related Determination Date;
provided that the Successor Servicer believes that sufficient Collections
of Non-Principal Receivables will be available on any future Distribution
Date to pay the Bank Series 1994-2 Monthly Servicing Fee relating to the
waived Monthly Servicing Fee. If the Successor Servicer so waives the
Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee
and the Bank Series 1994-2 Monthly Servicing Fee for such Distribution Date
shall be deemed to be zero for all purposes of this Bank Series 1994-2
Supplement and the Agreement; provided, however, that such Bank Series
1994-2 Monthly Servicing Fee shall be paid on a future Distribution Date
solely to the extent amounts are available therefor pursuant to
Section 5.10(b); provided further that, to the extent any such waived Bank
Series 1994-2 Monthly Servicing Fee is so paid, the related portion of the
Monthly Servicing Fee to be paid by the Seller shall be paid by the Seller
to the Successor Servicer.
ARTICLE V
Rights of Bank Series 1994-2 Certificateholders and Allocation and
Application of Collections
SECTION 5.1. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections.
(a) Collections of Non-Principal Receivables and Principal
Receivables, Miscellaneous Payments and Defaulted Amounts and unpaid
Adjustment Payments allocated to the Bank Series 1994-2 pursuant to Article
IV of the Agreement shall be allocated and distributed as set forth in this
Article.
(b) The Servicer shall instruct the Custodian to withdraw from
the Collection Account and pay to the Seller on the dates set forth below
the following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Non-
Principal Collections deposited in the Collection
Account on such Deposit Date; and
(B) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Principal
Collections deposited in the Collection Account on such
Deposit Date, if the Seller's Invested Amount
(determined after giving effect to the transfer of any
Principal Receivables to the Custodian on such Deposit
Date) exceeds the Custodial Available Subordinated
Amount for the immediately preceding Determination Date
(after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution
Date immediately following such Determination Date and
to any Increase made thereafter that is not reflected
in the Custodial Available Subordinated Amount); and
(ii) on each Deposit Date with respect to the Revolving Period,
an amount equal to the Available Seller's Principal
Collections for such Deposit Date, if the Seller's Invested
Amount (determined after giving effect to any Principal
Receivables transferred to the Custodian on such Deposit
Date) exceeds the Custodial Available Subordinated Amount
for the immediately preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals
and deposits to be made on the Distribution Date immediately
following such Determination Date and to any Increase made
thereafter that is not reflected in the Custodial Available
Subordinated Amount); provided, however, that Available
Seller's Principal Collections shall be paid to the Seller
with respect to any Collection Period only after an amount
equal to the sum of
(A) the Deficiency Amount, if any, relating to the
immediately preceding Collection Period and
(B) the excess, if any, of the Reserve Fund Required Amount
over the amount in the Reserve Fund on the immediately
preceding Distribution Date (after giving effect to the
allocations of, distributions from, and deposits in,
the Reserve Fund on such Distribution Date), has been
deposited in the Collection Account for the account of
Bank Series 1994-2 Certificateholders from such
Available Seller's Principal Collections.
The withdrawals to be made from the Collection Account pursuant
to this Section 5.1(b) do not apply to deposits into the Collection Account
that do not represent Collections, including Miscellaneous Payments,
payments of the purchase price for the Master Custodial Certificateholders'
Interest pursuant to Section 2.03 of the Agreement, payments of the
purchase price for the Bank Series 1994-2 Certificateholders' Interest
pursuant to Section 9.1 of this Bank Series 1994-2 Supplement and proceeds
from the sale, disposition or liquidation of Receivables pursuant to
Section 12.02 of the Agreement.
(c) The Servicer shall instruct the Custodian to withdraw from
the Collection Account and deposit into the Reserve Fund on each Deposit
Date during the Revolving Period Available Seller's Principal Collections
for such Deposit Date, up to the amount of the excess, if any, determined
pursuant to Section 5.1(b)(ii)(B).
SECTION 5.2. Yield and Yield Options.
(a) (i) The amount of yield ("Yield") with respect to the Bank
Series 1994-2 Certificates payable on any Distribution Date
shall be an amount equal to the sum of (x) the product of
(A) the Bank Series 1994-2 Certificate Rate for such Yield
Period, (B) the Aggregate Bank Series 1994-2 Invested Amount
as of the close of business on the preceding Distribution
Date (after giving effect to all repayments of principal
made to Bank Series 1994-2 Certificateholders on such
preceding Distribution Date, if any) and (C) a fraction, the
numerator of which is the actual number of days elapsed in
such Yield Period and the denominator of which is 365 (or
366, in leap years) and (y) the product of (A) the Bank
Series 1994-2 Certificate Rate for such Yield Period, (B)
the amount of any Increase made after such preceding
Distribution Date and prior to the first day of the calendar
month following such preceding Distribution Date, and (C) a
fraction, the numerator of which is the actual number of
days elapsed from and including the Increase Date related to
such Increase to but excluding the next succeeding
Distribution Date and the denominator of which is 365 (or
366, in leap years) and (z) the amount equal to any Pre-
Yield Period Deposit made during the Yield Period preceding
such Yield Period.
(ii) In the event the Wholesale Prime Rate changes during the
period between any Determination Date and the following
Distribution Date and a portion of the Aggregate Bank Series
1994-2 Invested Amount has not been allocated to the BA
Tranche, the Servicer and the Agent shall cooperate on the
date of such change in modifying the Distribution Date
Statement to reflect the adjustment in the Yield for the
then current Yield Period caused by such change and any
consequent adjustments, including adjustment to the
Deficiency Amount, if any. Any such modification, including
any adjustment to the Deficiency Amount shall be completed
by 10:00 a.m. on such Distribution Date.
(b) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Yield Shortfall"), of
(x) the aggregate Yield for the Yield Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Bank Series 1994-2 Certificateholders on such Distribution
Date in respect thereof pursuant to this Bank Series 1994-2 Supplement. If
the Yield Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Additional Yield") equal to the product of
(i) the Bank Series 1994-2 Certificate Rate for the Yield Period commencing
on the related Distribution Date (or, for subsequent Yield Periods, the
Bank Series 1994-2 Certificate Rate for such subsequent Yield Periods),
(ii) such Yield Shortfall (or the portion thereof which has not been paid)
and (iii) a fraction, the numerator of which is the actual number of days
elapsed in such Yield Period (or in a subsequent Yield Period) and the
denominator of which is 365 (or 366, in leap years) shall be payable as
provided herein with respect to the Bank Series 1994-2 Certificates on each
Distribution Date following such Distribution Date to and including the
Distribution Date on which such Yield Shortfall is paid. Notwithstanding
anything to the contrary herein, Additional Yield shall be payable or
distributed to Bank Series 1994-2 Certificateholders only to the extent
permitted by applicable law.
(c) (i) At least three Business Days prior to each Distribution
Date, the Seller may elect to have the yield due to the Bank
Series 1994-2 Certificateholders hereunder on all or any
portion of the Aggregate Bank Series 1994-2 Invested Amount
(determined in each case on such Distribution Date and after
giving effect to any distributions and Increases proposed on
such Date) based on the Wholesale Prime Rate or on one or
more Wholesale Bankers' Acceptance Rates for Canadian dollar
discount bankers' acceptances issued on the Distribution
Date maturing in a minimum of 28 days and a maximum of 180
days on a Distribution Date. The rate selection shall apply
for the period from and including the Distribution Date in
respect of which the election is being made to but not
including the immediately following Distribution Date;
provided, however, that if the Seller selects a Wholesale
Bankers' Acceptance Rate for discount bankers' acceptances
maturing after such immediately following Distribution Date,
then the Seller shall be deemed to have selected such rate
in respect of the applicable portion or portions of the
Aggregate Bank Series 1994-2 Invested Amount for the period
to the maturity date for such discount bankers' acceptances.
(ii) The Seller shall give written or telephonic notice (promptly
confirmed in writing) to the Agent of such election and
shall specify in such notice the portion or portions of the
Aggregate Bank Series 1994-2 Invested Amount to which each
such rate shall apply. If the Seller fails to give notice
of its yield option election in a timely manner as required,
the yield on the Aggregate Bank Series 1994-2 Invested
Amount (other than the portion or portions for which the
Seller shall have been deemed to have selected a rate as
aforesaid) shall be based on the Wholesale Prime Rate.
(iii) Promptly after receiving the Seller's yield option election
as aforesaid, the Agent shall notify each Bank Series 1994-2
Certificateholder thereof.
(iv) On each Distribution Date on which a Wholesale Bankers'
Acceptance Rate is to be calculated, each Bank Series 1994-2
Certificateholder will notify the Agent and the Seller of
its applicable Certificateholder's Bankers' Acceptance Rate.
(v) Notwithstanding anything to the contrary in this subsection
5.2(c),
(A) the portion of the Aggregate Bank Series 1994-2
Invested Amount to which a particular Wholesale
Bankers' Acceptance Rate shall apply shall be a minimum
of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, and
(B) in the event that the Agent shall have determined
(which determination shall be conclusive and binding
upon the Seller) that (I) quotation of annual rates for
the relevant discount bankers' acceptances referred to
above are not being provided in the relevant amount or
for the relevant maturities for the purposes of
determining the yield when based on the Wholesale
Bankers' Acceptance Rate, or (II) the Wholesale
Bankers' Acceptance Rate does not accurately reflect
the cost to the Bank Series 1994-2 Certificateholders
of adding to or maintaining their respective
investments in their respective portions of the
Aggregate Bank Series 1994-2 Invested Amount, the Agent
shall forthwith give written notice of such
determination to the Seller at least one day prior to
the Distribution Date on which such rate is to be
applied hereunder and if such notice is given then,
until such notice has been withdrawn by the Agent, the
Seller shall not have the option to elect the
calculation of the annual rate of return based upon the
Wholesale Bankers' Acceptance Rate.
(d) Anything contained in this Section 5.2 to the contrary
notwithstanding, after the occurrence and during the continuance of any
Bank Series 1994-2 Early Amortization Event, the Seller may not elect to
allocate all or any part of the Aggregate Bank Series 1994-2 Invested
Amount to the BA Tranche.
SECTION 5.3. Determination of Monthly Principal. The amount of
monthly principal ("Monthly Principal") distributable with respect to the
Bank Series 1994-2 Certificates on each Distribution Date with respect to
any Bank Series 1994-2 Early Amortization Period shall be equal to the
Available Bank Principal Collections with respect to such Distribution
Date; provided, however, that Monthly Principal shall not exceed the
Aggregate Bank Series 1994-2 Invested Amount.
SECTION 5.4. Establishment of Reserve Fund.
(a) (i) The Custodian, as agent for and on behalf of the Bank Series
1994-2 Certificateholders, shall cause to be established and
maintained at the Custodian an Eligible Deposit Account (the
"Reserve Fund") which shall be identified as the "Reserve
Fund for the Master Custodial and Servicing Agreement, Bank
Series 1994-2" and shall bear a designation clearly
indicating that the funds deposited therein belong to the
Bank Series 1994-2 Certificateholders and to the Seller as
their interests appear herein.
(ii) At the direction of the Servicer, funds on deposit in the
Reserve Fund shall be invested by the Custodian in Eligible
Investments selected by the Servicer that will mature so
that such funds will be available at the close of business
on or before the Business Day next preceding the following
Distribution Date. All Eligible Investments shall be held by
the Custodian as agent for and on behalf of the Bank Series
1994-2 Certificateholders and the Seller as their interests
appear herein. On each Distribution Date, all interest and
other investment earnings (net of losses and investment
expenses) on funds on deposit in the Reserve Fund received
prior to such Distribution Date shall be applied as set
forth in Section 5.6(a) of this Bank Series 1994-2
Supplement. Funds deposited in the Reserve Fund on a
Business Day (which immediately precedes a Distribution
Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.
(b) (i) The Bank Series 1994-2 Certificateholders shall possess all
right, title and interest in and to all funds on deposit
from time to time in, and all Eligible Investments credited
to, the Reserve Fund and in all proceeds thereof, except to
the extent of the interest of the Seller therein to the
extent expressly set forth in this Bank Series 1994-2
Supplement. The Bank Series 1994-2 Certificateholders
agree, by acceptance of their Bank Series 1994-2
Certificates and without further action, that all such funds
and Eligible Investments shall be maintained, invested and
disbursed in accordance with this Bank Series 1994-2
Supplement and the Bank Series 1994-2 Certificateholders
hereby authorize and empower the Custodian and the Servicer
to maintain, invest and disburse such funds and Eligible
Investments in accordance with this Bank Series 1994-2
Supplement. If, at any time, the Reserve Fund ceases to be
an Eligible Deposit Account, the Custodian (or the Servicer
on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the
Agent may consent) establish a new Reserve Fund meeting the
conditions specified in paragraph 5.4(a)(i) above, as
applicable, as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Reserve
Fund. None of the Seller, the Servicer, the Custodian nor
any person or entity claiming by, through or under the
Seller, the Servicer, the Custodian or any such person or
entity shall have any right, title or interest in, or any
right to withdraw any amount from, the Reserve Fund, except
as expressly provided herein. Schedule 1, which is hereby
incorporated into and made part of this Bank Series 1994-2
Supplement, identifies the Reserve Fund by setting forth the
account number of such account, the account designation of
such account and the name of the institution with which such
account has been established. If a substitute Reserve Fund
is established pursuant to this Section, the Servicer, prior
to making any deposits therein, shall provide to the
Custodian an amended Schedule 1, setting forth the relevant
information for such substitute Reserve Fund.
(ii) Pursuant to the authority granted to the Servicer in
Section 4.01(a) of the Agreement, the Servicer shall have
the power, revocable by the Custodian, to make withdrawals
and payments or to instruct the Custodian to make
withdrawals and payments from the Reserve Fund for the
purposes of carrying out the Servicer's or Custodian's
duties hereunder.
(iii) Unless otherwise agreed to by the Agent, at no time may
Eligible Investments in a principal amount equal to more
than 10% of the Aggregate Bank Series 1994-2 Invested Amount
be invested in Eligible Investments (other than obligations
of the Government of Canada) of any single entity or its
Affiliates.
SECTION 5.5. Deficiency Amount. With respect to each
Distribution Date, on the related Determination Date, the Servicer shall
determine the amount (the "Deficiency Amount"), if any, by which
(a) the sum of
(i) Yield for such Distribution Date,
(ii) any Yield previously due but not distributed to the Bank
Series 1994-2 Certificateholders on a prior Distribution Date,
(iii) Additional Yield, if any, for such Distribution Date and any
Additional Yield previously due but not distributed to the
Bank Series 1994-2 Certificateholders on a prior
Distribution Date,
(iv) the Bank Series 1994-2 Monthly Servicing Fee, if any, for
such Distribution Date, and
(v) the Bank Defaulted Amount, if any, for such Distribution
Date, and
(vi) the Bank Series 1994-2 Allocation Percentage of the amount
of any Adjustment Payment required to be deposited in the
Collection Account pursuant to Section 3.09(a) of the
Agreement with respect to the related Collection Period that
has not been so deposited as of such Determination Date,
exceeds
(b) the sum of
(i) Bank Non-Principal Collections for such Distribution Date,
Available Seller's Non-Principal Collections for such
Distribution Date, any Investment Proceeds with respect to
such Distribution Date, and
(ii) the amount of funds in the Reserve Fund which are available
pursuant to Section 5.8(a) to cover any portion of the
Deficiency Amount.
The lesser of the Deficiency Amount and the Available Subordinated Amount
shall be the "Required Subordination Draw Amount".
SECTION 5.6. Application of Bank Non-Principal Collections,
Available Seller's Non-Principal Collections, Investment Proceeds and
Available Bank Principal Collections. The Servicer shall cause the
Custodian to apply, on each Distribution Date, Bank Non-Principal
Collections, Available Seller's Non-Principal Collections, Investment
Proceeds and Available Bank Principal Collections to make the following
distributions:
(a) On each Distribution Date, an amount equal to the sum of Bank
Non-Principal Collections, Available Seller's Non-Principal
Collections and any Investment Proceeds with respect to the
preceding Collection Period will be distributed in the following
priority:
(i) first, an amount equal to Yield for such Distribution Date,
plus the amount of any Yield previously due but not
distributed to the Bank Series 1994-2 Certificateholders on
a prior Distribution Date, plus the amount of any Additional
Yield for such Distribution Date and any Additional Yield
previously due but not distributed to the Bank Series 1994-2
Certificateholders on a prior Distribution Date, shall be
distributed to the Bank Series 1994-2 Certificateholders;
(ii) second, an amount equal to the Bank Series 1994-2 Monthly
Servicing Fee, if any, for such Distribution Date shall be
distributed to the Successor Servicer (unless such amount
has been netted against deposits to the Collection Account
or waived);
(iii) third, an amount equal to the Bank Defaulted Amount for such
Distribution Date shall be distributed and treated as a
portion of Bank Principal Collections for such Distribution
Date;
(iv) fourth, an amount equal to the Reserve Fund Deposit Amount,
if any, for such Distribution Date shall be deposited in the
Reserve Fund; and
(v) fifth, the balance, if any, shall constitute Excess Income
and shall be allocated and distributed as set forth in
Section 5.10.
(b) (i) On each Distribution Date with respect to the Revolving
Period with respect to which the Seller has notified the
Agent a Decrease will occur, an amount of Available Bank
Principal Collections deposited in the Collection Account
for the related Collection Period equal to such Decrease
will be distributed to the Bank Series 1994-2 Certificate-
holders. The Aggregate Bank Series 1994-2 Invested Amount
shall be reduced by the amount of Available Bank Principal
Collections so distributed. Any such remaining Available
Bank Principal Collections shall be treated as Excess
Principal Collections and applied in accordance with Section
4.04 of the Agreement.
(ii) On each Distribution Date with respect to the Revolving
Period with respect to which the Seller has not notified the
Agent it will be making a Decrease, an amount equal to
Available Bank Principal Collections deposited in the
Collection Account for the related Collection Period shall
be treated as Excess Principal Collections and applied in
accordance with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to a Bank Series 1994-2
Early Amortization Period, an amount equal to Available Bank
Principal Collections will be distributed in the following
priority:
(i) first, an amount equal to Monthly Principal for such
Distribution Date shall be paid to the Bank Series 1994-2
Certificateholders; and
(ii) second, after giving effect to the payment referred to in
clause (i) above, an amount equal to the balance, if any, of
such Available Bank Principal Collections shall be treated
as Excess Principal Collections and applied in accordance
with Section 4.04 of the Agreement and Section 5.11 hereof.
SECTION 5.7. Distributions to Bank Series 1994-2 Certificate-
holders. Notwithstanding anything to the contrary in this Bank Series
1994-2 Supplement or the Agreement, to the extent there are any amounts
owing to the Bank Series 1994-2 Certificateholders hereunder on the
Termination Date, such amounts shall be distributed to the Bank Series
1994-2 Certificateholders from Available Seller's Collections on such
Termination Date.
SECTION 5.8. Application of Reserve Fund and Available
Subordinated Amount.
(a) If the portion of Bank Non-Principal Collections, Available
Seller's Non-Principal Collections and Investment Proceeds allocated to
Bank Series 1994-2 Certificateholders on any Distribution Date pursuant to
Section 5.6(a) is not sufficient to make the entire distributions required
on such Distribution Date by Sections 5.6(a)(i), 5.6(a)(ii) and
5.6(a)(iii), the Servicer shall cause the Custodian to withdraw funds from
the Reserve Fund, to the extent available therein, and apply such funds to
complete the distributions pursuant to Sections 5.6(a)(i), 5.6(a)(ii) and
5.6(a)(iii).
(b) If there is a Required Subordination Draw Amount for such
Distribution Date, the Servicer shall apply or cause the Custodian to apply
the Available Seller's Principal Collections on deposit in the Collection
Account on such Distribution Date, but only up to the amount of the
Required Subordination Draw Amount, to make the distributions required by
Sections 5.6(a)(i), 5.6(a)(ii) and 5.6(a)(iii) that have not been made
through the application of funds from the Reserve Fund in accordance with
the preceding paragraph. Any such Available Seller's Principal Collections
remaining after the application thereof pursuant to the preceding sentence
and any Available Seller's Non-Principal Collections remaining after the
application thereof pursuant to Section 5.6(a) shall be treated as a
portion of Bank Principal Collections for such Distribution Date, but only
up to the amount of unpaid Adjustment Payments allocated to the Bank Series
1994-2 as described in Section 5.5(a)(vi). The amount of the Available
Seller's Principal Collections applied in accordance with the two preceding
sentences shall reduce the Available Subordinated Amount as described in
clause (c) of the definition thereof. If the Required Subordination Draw
Amount exceeds Available Seller's Collections for such Distribution Date,
the Available Subordinated Amount shall be further reduced by the amount of
such excess, but not by more than the sum of (x) the Bank Defaulted Amount
and (y) an amount of unpaid Adjustment Payments allocated to the Bank
Series 1994-2 as described in Section 5.5(a)(vi).
(c) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Fund made pursuant to Sections 5.1(c),
5.4, 5.6(a) and 5.8(a), the amount in the Reserve Fund is greater than the
Reserve Fund Required Amount for such Distribution Date, the Servicer shall
cause the Custodian to distribute such excess amount to the Seller,
provided that the Custodial Available Subordinated Amount for the
immediately preceding Determination Date exceeds the Seller's Invested
Amount on such date (determined after giving effect to any Principal
Receivables Transferred to the Custodian on such Distribution Date). On
the Termination Date, any funds in the Reserve Fund will be treated as
Available Bank Principal Collections. Upon the earlier of the Termination
Date and the payment in full of the Aggregate Bank Series 1994-2 Invested
Amount any funds remaining on deposit in the Reserve Fund shall be paid to
the Seller.
(d) If, for any Distribution Date with respect to a Bank Series 1994-2
Early Amortization Event, after giving effect to the allocations of,
distributions from, and deposits in, the Reserve Fund made pursuant to
Sections 5.1(c), 5.4, 5.6(a) and 5.8, the amount in the Reserve Fund is
less than the Reserve Fund Required Amount for such Distribution Date, the
Custodian shall deposit any remaining Available Seller's Principal
Collections on deposit in the Collection Account for such Distribution Date
into the Reserve Fund until the amount in the Reserve Fund is equal to such
Reserve Fund Required Amount.
(e) The balance of Available Seller's Principal Collections on any
Distribution Date, after giving effect to any distributions thereof
pursuant to Section 5.6 and this Section 5.8(b) and 5.8(d) shall be
distributed to the Seller on such Distribution Date, provided that, the
Custodial Available Subordinated Amount for the immediately preceding
Determination Date exceeds the Seller's Invested Amount on such date
(determined after giving effect to any Principal Receivables Transferred to
the Custodian on such Distribution Date).
SECTION 5.9. Bank Charge-Offs. If, on any Distribution Date on
which the Available Subordinated Amount on the preceding Determination Date
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on such Distribution Date) is zero and the Deficiency
Amount for such Distribution Date is greater than zero, the Aggregate Bank
Series 1994-2 Invested Amount shall be reduced by the amount (a "Bank
Charge-Off") of the excess of such Deficiency Amount over any remaining
Available Subordinated Amount on such Determination Date, but not by more
than the Bank Defaulted Amount. The Bank Series 1994-2 Certificateholders
shall thereafter be reimbursed in respect of the Bank Charge-Offs and the
Aggregate Bank Series 1994-2 Invested Amount increased (but not by an
amount in excess of the aggregate unreimbursed Bank Charge-Offs on any
Distribution Date) by the sum of
(a) Allocable Miscellaneous Payments with respect to such
Distribution Date and
(b) the amount of Excess Income allocated and available for that
purpose pursuant to Section 5.10(a).
SECTION 5.10. Excess Income. The Servicer shall cause the
Custodian to apply, on each Distribution Date, Excess Income with respect
to the Collection Period immediately preceding such Distribution Date, to
make the following distributions in the following priority:
(a) an amount equal to the aggregate amount of Bank Charge-Offs in
respect of which the Bank Series 1994-2 Certificateholders have
not been previously reimbursed as provided in Section 5.9 (after
giving effect to the allocation on such Distribution Date of any
amount for that purpose pursuant to Section 5.9) shall be treated
as a portion of Bank Principal Collections with respect to such
Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of the Bank
Series 1994-2 Monthly Servicing Fee, if any, which have been
previously waived pursuant to Section 4.1 shall be distributed to
the Servicer; and
(c) the balance, if any, shall be distributed to the Seller.
SECTION 5.11. Excess Principal Collections.
(a) On each Distribution Date, the Servicer shall allocate a portion
of Excess Principal Collections to the Bank Series 1994-2 as set forth in
this Bank Series 1994-2 Supplement. That portion of Excess Principal
Collections for any Distribution Date allocated to the Bank Series 1994-2
for any Distribution Date (the "Bank Series 1994-2 Excess Principal
Collections") shall be the amount specified under Section 5.11(b) and shall
be distributed as set forth in this Bank Series 1994-2 Supplement.
(b) Bank Series 1994-2 Excess Principal Collections, with respect to
any Distribution Date, shall be an amount equal to the Bank Series 1994-2
Principal Shortfall for such Distribution Date; provided, however, that, if
the aggregate amount of Excess Principal Collections for all Series for
such Distribution Date is less than the aggregate amount of Principal
Shortfalls for all Series for such Distribution Date, then Bank Series
1994-2 Excess Principal Collections for such Distribution Date shall be an
amount equal the product of (x) Excess Principal Collections for all Series
for such Distribution Date and (y) a fraction, the numerator of which is
the Bank Series 1994-2 Principal Shortfall for such Distribution Date and
the denominator of which is the aggregate amount of Principal Shortfalls
for all Series for such Distribution Date. The "Bank Series 1994-2
Principal Shortfall", with respect to any Distribution Date, means an
amount equal to the excess, if any, of (i) (x) for any Distribution Date
with respect to the Revolving Period, the amount of the Decrease, if any,
with respect to such Distribution Date or (y) for any Distribution Date
with respect to a Bank Series 1994-2 Early Amortization Period, the
Aggregate Bank Series 1994-2 Invested Amount, over (ii) Available Bank
Principal Collections for such Distribution Date (excluding any portion
thereof attributable to Excess Principal Collections).
SECTION 5.12. Allocations and Applications of Collections and
Other Funds. For purposes of Section 4.03(e)(i) of the Agreement as it
relates to the Bank Series 1994-2 and the definition of Series Adjusted
Invested Amount as it relates to the Bank Series 1994-2, each Increase
pursuant to Section 3.2 of this Bank Series 1994-2 Supplement and each
Decrease pursuant to Section 3.3 of this Bank Series 1994-2 Supplement (and
any related increase or decrease in the Available Subordinated Amount)
shall be deemed to have occurred as of the last day of the Collection
Period immediately preceding the Collection Period in which such Increase
or Decrease occurs.
ARTICLE VI
Distributions and Reports
to Bank Series 1994-2 Certificateholders
SECTION 6.1. Distributions.
(a) On each Distribution Date with respect to a Collection Period
during which the Aggregate Bank Series 1994-2 Invested Amount was greater
than zero at any time, the Servicer shall cause the Custodian to distribute
to the Agent on behalf of each Bank Series 1994-2 Certificateholder of
record on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) all amounts
required to be distributed to the Bank Series 1994-2 Certificateholders in
Article V and promptly thereafter the Agent shall make available to each
Bank Series 1994-2 Certificateholder pursuant to subsection 2.8(c) of the
Short-Term RPA an amount equal to the product of (i) the amounts to be
distributed to the Bank Series 1994-2 Certificateholders pursuant to
Article V and (ii) such Bank Series 1994-2 Certificateholder's Purchase
Percentage. Each Bank Series 1994-2 Certificateholder's Purchase
Percentage of Yield or Additional Yield will be calculated by the Agent as
if references to "Wholesale Bankers' Acceptance Rate" in the definition of
"Blended Wholesale Rate" were references to the applicable "Certificate-
holder's Bankers' Acceptance Rate".
(b) Except as provided in Section 12.02 of the Agreement with respect
to a final distribution, distributions to Bank Series 1994-2 Certificate-
holders hereunder shall be made by wire transfer to the Agent on behalf of
each Bank Series 1994-2 Certificateholder without presentation or surrender
of any Bank Series 1994-2 Certificate or the making of any notation
thereon; provided, however, that, subject to the receipt of the
Distribution Date Statement pursuant to Section 6.3(a) hereof, the
Custodian shall give wire transfer instructions with respect to such
distributions by 10:00 a.m., Toronto time, for wire transfer of such
distributions to the Agent to the account specified by the Agent at the
Royal Bank of Canada, Main Branch, Royal Bank Plaza, Toronto, Ontario, or
such other account in Canada as the Agent shall specify to the Servicer and
Custodian in writing from time to time in immediately available funds.
(c) All allocations and distributions hereunder shall be in
accordance with the Distribution Date Statement delivered by the Servicer
to the Custodian pursuant to subsection 6.3(a) and shall be made in lawful
currency of Canada and in immediately available funds.
SECTION 6.2. Daily Reports. On each Business Day when the
Aggregate Bank Series 1994-2 Invested Amount is greater than zero, the
Servicer shall provide the Agent and the Custodian with a Daily Report and
the Agent shall at the reasonable request of the Bank Series 1994-2
Certificateholders make copies of the Daily Reports available at its Main
Branch, Toronto.
SECTION 6.3. Periodic Reports.
(a) Distribution Date Statements. On each Determination Date with
respect to a Collection Period during which the Aggregate Bank Series 1994-2
Invested Amount was greater than zero at any time, the Servicer shall
deliver to the Custodian and the Agent a Distribution Date Statement and
the Agent shall forward a copy of each such Distribution Date Statement to
each Bank Series 1994-2 Certificateholder. The Custodian shall be entitled
to rely on each Distribution Date Statement to determine the Aggregate Bank
Series 1994-2 Invested Amount.
(b) Monthly Certificateholders' Statement. On each Distribution Date
with respect to a Collection Period during which the Aggregate Bank Series
1994-2 Invested Amount was greater than zero at any time, the Servicer
shall deliver to the Custodian and the Agent a Monthly Certificateholders'
Statement and the Agent shall forward a copy of each such statement to each
Bank Series 1994-2 Certificateholder.
(c) Bank Series 1994-2 Early Amortization Period Notices. Upon the
occurrence of a Bank Series 1994-2 Early Amortization Event or any event
which, with the giving of notice, the lapse of time or both, or the
satisfaction of any other condition, would be a Bank Series 1994-2 Early
Amortization Event, the Seller or the Servicer, as the case may be, shall
give prompt written notice thereof to the Custodian and the Agent. In
addition, the Seller shall give the Agent written notice of the occurrence
and nature of an Early Amortization Event with respect to any other Series
which is not a Bank Series 1994-2 Early Amortization Event or any event
which, with the giving of notice, the lapse of time or both, or the
satisfaction of any other condition would be an Early Amortization Event
for such other Series.
(d) Annual Tax Statement. As soon as practicable after the end of
each calendar year during which the Aggregate Bank Series 1994-2 Invested
Amount was greater than zero at any time, beginning with calendar year
1994, the Custodian shall furnish or cause to be furnished to each Person
who at any time during the preceding calendar year was a Bank Series 1994-2
Certificateholder, a statement prepared by the Servicer containing the
information which is required to be contained in the Distribution Date
Statement aggregated for such preceding calendar year or the applicable
portion thereof during which such Person was a Bank Series 1994-2
Certificateholder, together with other information as is necessary to
enable the Bank Series 1994-2 Certificateholders to prepare their Canadian
federal and provincial income, large corporations and capital tax returns.
(e) Tax Information. Each of the Custodian, the Servicer and the
Seller shall, upon reasonable notice and during normal business hours, in
connection with any assessment, reassessment or audit of any Bank Series
1994-2 Certificateholder under or pursuant to any relevant Canadian federal
or provincial taxing legislation, or any objection to or appeal from such
assessment, reassessment or audit, make available to the affected Bank
Series 1994-2 Certificateholder, its advisors and relevant taxing
authorities, all information, records, and documents in its possession
pertaining to the Purchased Assets or the Bank Series 1994-2 Certificate-
holder's ownership interest therein which is relevant to such assessment,
reassessment or audit. The obligations of the Custodian, Seller and
Servicer under this clause shall survive and continue notwithstanding any
termination of or final distribution with respect to this Bank Series 1994-2
Supplement or any termination of custodial arrangements created under the
Agreement.
ARTICLE VII
Amortization Events
SECTION 7.1. Additional Amortization Events. The occurrence of
any of the following events shall, immediately upon the occurrence thereof
without notice or other action on the part of the Custodian, the Agent or
the Bank Series 1994-2 Certificateholders, be deemed to be an Early
Amortization Event solely with respect to the Bank Series 1994-2;
(a) on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods is less than 20%;
(b) on any Determination Date, the Available Subordinated Amount for
the next Distribution Date will be less than the Required
Subordinated Amount on such Determination Date, after giving
effect to the distributions to be made on the next Distribution
Date;
(c) any Service Default as defined in this Bank Series 1994-2
Supplement occurs;
(d) on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds 20% of the Pool Balance on such
last day;
(e) any Yield Shortfall or Additional Yield exists on six consecutive
Distribution Dates;
(f) on any Determination Date the average ratio of the Allocable
Defaulted Amounts for the three preceding Collection Periods to
the Allocable Principal Collections for the three preceding
Collection Periods exceeds O.75%; or
(g) the earlier of (i) the day any Commitment Termination Event, as
defined in the Short-Term RPA, occurs and (ii) May 22, 1994.
SECTION 7.2. Notice of Bank Series 1994-2 Early Amortization
Event. The Custodian shall not be deemed to have knowledge of the
occurrence of an Bank Series 1994-2 Early Amortization Event unless the
Custodian shall have received written notice describing such Bank Series
1994-2 Early Amortization Event and stating that such notice is a "notice
of Bank Series 1994-2 Early Amortization Event".
ARTICLE VIII
Covenants, Representations and Warranties
SECTION 8.1. Representations and Warranties of the Seller and
the Servicer.
(a) The Seller and the Servicer each hereby represents and warrants
to the Agent and each of the Banks that each of their respective
representations and warranties contained in Section 2.03, 2.04 and 3.03 of
the Agreement and in Article 3 of the Short-Term RPA is true and correct in
all material respects as of the date hereof and as of the date of each
Increase.
(b) Each of the Investor Master Custodial Certificateholder(s) in
whose name the Investor Master Custodial Certificates issued pursuant to
the Series 1992-1 Supplement to the Agreement are registered and the
registered holders of securities issued by the Investor Master Custodial
Certificateholder(s) in whose name the Investor Master Custodial
Certificates issued pursuant to the Series 1992-1 Supplement to the
Agreement are registered has been and will be at all material times at
arm's length with CCCL within the meaning of the Income Tax Act (Canada).
A true and complete copy of each of the Agreement and the Series 1992-1
Supplement to the Agreement has been delivered to the Agent.
(c) No Receivable Transferred to the Custodian is at the time of
Transfer, or will be thereafter, subject to any right of rescission, set-
off, (other than in respect of a Dealer's Dealer Account) counterclaim, or
other defence (including defences arising out of violations of usury laws)
of the Dealer.
(d) True and complete copies of all agreements of the type referred
to in Subsection 11.01(h) of the Agreement have been delivered to the
Agent.
SECTION 8.2. Covenants of the Seller and CCCL. The Seller and
CCCL hereby covenant:
(a) that if at any time, the Agent is unable to obtain the names and
addresses of all Master Custodial Certificateholders under each
series supplement to the Agreement, and so advises CCCL, CCCL
will promptly obtain and provide such information to the Agent.
CCCL shall deal at arms' length with all Master Custodial
Certificateholders within the meaning of the Income Tax Act
(Canada); and
(b) that neither CCCL nor any Seller will modify any term or
provision of CCCL's standard forms of Floorplan Financing
Agreements or the Floorplan Financing Guidelines in use in Canada
in a manner which would materially and adversely affect the Bank
Series 1994-2 Certificateholders, and CCCL shall at any time and
from time to time upon the request of the Agent, provide to the
Agent summaries of the Floorplan Financing Guidelines and copies
of CCCL's standard forms of Floorplan Financing Agreements.
SECTION 8.3. Covenants of the Servicer. The Servicer hereby
covenants that:
(a) upon three Business Days' prior written notice, it shall allow
employees and agents of the Agent, acting at the request of any
Bank Series 1994-2 Certificateholder, during normal business
hours of the Servicer and without disruption of normal business
conducted by the Servicer, to initiate an audit of the Servicer
for the purpose of confirming compliance with the terms of the
Agreement and this Bank Series 1994-2 Supplement, which audit
shall be at the expense of the Servicer;
(b) it shall give prior notice to the Agent of the delegation of any
of its servicing, collection, enforcement or administrative
duties with respect to the Receivables; and
(c) if, at any time, none of then outstanding Series or Classes of
Master Custodial Certificates are being rated by a Rating Agency,
the condition set forth in Section 4.03(b)(iii)(z) of the
Agreement with respect to the Servicer's right to make monthly
deposits of Collections into the Collection Account shall not be
applicable, and any change in the frequency of deposits of
Collections shall be subject to the prior written consent of the
Agent; provided, however, that such consent will not be required
so long as the Servicer shall have delivered to the Custodian a
written confirmation from each of the Rating Agencies by which
debt securities issued by Specified Holders (as hereinafter
defined) of Investor Master Custodial Certificates are then being
rated to the effect that the failure of the Servicer to make
deposits in accordance with Section 4.03(a) of the Agreement
shall not result in a reduction or withdrawal of such rating. For
the purposes of this Section 8.3(c), a "Specified Holder" is a
body corporate the only or principal asset of which is one or
more Master Custodial Certificates where the rating assigned by a
Rating Agency to the debt securities of such body corporate could
reasonably be regarded as reflecting the Rating Agency's
assessment of the value and risk of such Master Custodial
Certificate or Certificates.
ARTICLE IX
Final Distributions
SECTION 9.1. Sale of Bank Series 1994-2 Certificateholders'
Interest Pursuant to Section 2.03 of the Agreement; Distributions Pursuant
to Section 9.1 of this Bank Series 1994-2 Supplement or Section 2.03 or
12.02(c) of the Agreement.
(a) The amount to be paid by the Seller to the Collection Account
with respect to the Bank Series 1994-2 in connection with a purchase of the
Bank Series 1994-2 Certificateholders' Interest pursuant to Section 2.03 of
the Agreement shall equal the Reassignment Amount for the Distribution Date
on which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 2.03 of the Agreement or any Bank
Series 1994-2 Termination Proceeds deposited into the Collection Account
pursuant to Section 12.02(c) of the Agreement, the Custodian shall, upon
receipt of written instructions from the Servicer, not later than 12:00
noon, Toronto time, on the Distribution Date on which such amounts are
deposited (or, if such date is not a Distribution Date, on the immediately
following Distribution Date) in the priority set forth below: (i) first,
distribute the amount deposited, up to the Reassignment Amount to the Bank
Series 1994-2 Certificateholders and (ii) second, pay the remainder of any
Termination Proceeds to the Seller.
(c) Notwithstanding anything to the contrary in this Bank Series
1994-2 Supplement or the Agreement, any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Agreement with respect to the Bank Series 1994-2.
ARTICLE X
Miscellaneous Provisions
SECTION 10.1. Ratification of Agreement. As supplemented by
this Bank Series 1994-2 Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Bank
Series 1994-2 Supplement shall be read, taken and construed as one and the
same instrument.
SECTION 10.2. Counterparts. This Bank Series 1994-2 Supplement
may be executed in two or more counterparts (and by different parties on
separate counterparts) each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 10.3. Governing Law. This Bank Series 1994-2 Supplement
shall be construed in accordance with the laws of Province of Ontario and
the laws of Canada applicable therein, 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 10.4. Notices. All notices, requests and demands to or
upon any of the Seller, the Servicer, the Agent and the Bank Series 1994-2
Certificateholders shall be delivered in accordance with Section 10.2 of
the Short-Term RPA.
SECTION 10.5. Successors and Assigns.
(a) This Bank Series 1994-2 Supplement shall be binding upon and
enure to the benefit of the parties hereto and their respective successors
and assigns.
(b) Each Bank Series 1994-2 Certificateholder may only sell its Bank
Invested Amount in accordance with the terms hereof and of the Short-Term
RPA.
SECTION 10.6. Rights of Bank Series 1994-2 Certificateholders.
The Bank Series 1994-2 Certificates evidence undivided ownership interests
in the Purchased Property only and do not evidence any interest in or
obligation of the Seller or the Custodian. The Bank Series 1994-2
Certificates shall not evidence any interest in the Series Accounts or
Enhancement for the benefit of any other Series or Class. The Bank Series
1994-2 Certificates evidence undivided ownership interests in the Purchased
Property which include the right to receive, to the extent necessary to
make the required payments with respect to the Bank Series 1994-2
Certificates at the times and in the amounts specified in this Bank Series
1994-2 Supplement, the portion of the Collections allocable to the Bank
Series 1994-2 Certificateholders pursuant to the Agreement and this Bank
Series 1994-2 Supplement, funds on deposit in the Collection Account
allocable to the Bank Series 1994-2 Certificateholders pursuant to the
Agreement and this Bank Series 1994-2 Supplement and funds on deposit in
the Reserve Fund.
SECTION 10.7. Custodian's Communications. The Agent has been
designated and appointed by the Bank Series 1994-2 Certificateholders
pursuant to the Short-Term RPA. Notwithstanding any other provision of
this Bank Series 1994-2 Supplement to the contrary, the Custodian shall not
be obligated to communicate with or make distributions to individual Bank
Series 1994-2 Certificateholders, but instead shall be entitled to deal
exclusively with the Agent for the Bank Series 1994-2 Certificateholders.
SECTION 10.8. Amendments. Notwithstanding Section 13.01 of the
Agreement, any amendment to this Bank Series 1994-2 Supplement shall also
comply with the requirements of Article 10 of the Short-Term RPA.
ARTICLE XI
Conditions Precedent
SECTION 11.1. Conditions Precedent to Effectiveness of
Supplement. This Bank Series 1994-2 Supplement will become effective on
the date (the "Effective Date") that the Agent shall have received:
(a) Documents.
(i) A copy of the Short-Term RPA executed by a duly authorized
officer of the Seller and certified by a Responsible Officer
of the Seller,
(ii) this Bank Series 1994-2 Supplement executed by a duly
authorized officer of each of the Seller and the Custodian,
(iii) the Bank Series 1994-2 Certificates executed by and
authenticated by the Custodian, and
(iv) a copy of the 1993 Termination Agreement executed by a duly
authorized officer of each of the Seller, the Custodian and
Chrysler Financial Corporation.
(b) Legal Opinions. A legal opinion of Gowling, Strathy & Henderson,
counsel to the Seller and the Servicer, dated the Effective Date, in
substantially the form of Schedule 4.1(m)(ii) to the Short-Term RPA;
(c) Bank Series 1994-2 Early Amortization Events. A certificate of a
Responsible Officer of the Seller that no Bank Series 1994-2 Early
Amortization Event and no event which, with the lapse of time or the giving
of notice or both, or the satisfaction of any other condition, would be a
Bank Series 1994-2 Early Amortization Event, has occurred and is
continuing;
(d) Conditions to Issuance of Bank Series 1994-2 Certificates. A
certificate of a Responsible Officer of the Seller that the conditions to
the issuance of the Bank Series 1994-2 Certificates set forth in the
Agreement have been satisfied; and
(e) Short-Term RPA Conditions. The conditions precedent set forth in
Section 4.1 of Short-Term RPA (excluding the condition that this Bank
Series 1994-2 Supplement be effective) shall have been satisfied and the
Agent shall have received a Certificate of a Responsible Officer of the
Seller that the conditions to the effectiveness of the Short-Term RPA set
forth therein (excluding the condition that this Bank Series 1994-2
Supplement be effective) have been satisfied.
IN WITNESS WHEREOF, the parties hereto have caused this Bank
Series 1994-2 Supplement to be duly executed by their respective officers
as of the day and year first above written.
CHRYSLER CREDIT CANADA LTD.
27777 Franklin Road By: "David A. Robison"
Southfield, Michigan
U.S.A. Title: V-P & Treasurer
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
CHRYSLER FINANCIAL CORPORATION
27777 Franklin Road By: "Dennis M. Cantwell"
Southfield, Michigan
U.S.A. Title: V-P, Corp. Finance & Devpt
48034-8286
Attention: Treasurer
Telephone: 810-948-3140
Telecopier: 810-948-3801
ROYAL BANK OF CANADA
As Agent
13th Floor
200 Bay Street
South Tower By: "David W. Cox"
Royal Bank Plaza
Toronto, Ontario Title: Senior Manager
M5J 2J5
Attention: Manager, Operations
Loan Structuring and Syndications
Telex: 06218783
Telephone: 416-974-4154
Telecopier: 416-974-2407
ROYAL BANK OF CANADA
By: "Glen D. Carter"
20 King Street West Title: Senior Manager
10th Floor
Toronto, Ontario
M5H 1C4
Attention: Glen D. Carter
Senior Manager,
Corporate Banking, Multinational
Telephone: 416-974-4278
Telecopier: 416-974-5938
CANADIAN IMPERIAL BANK OF
COMMERCE
Commerce Court West By: "Harold Chataway"
7th Floor
Toronto, Ontario Title: Managing Dir.Auto.Grp.
M5L 1A2
Attention: Harold Chataway
Managing Director, Automotive Group
Commerce Court Corporate Group
Telephone: 416-980-5315
Telecopier: 416-980-8384
Telex: 06-524116
THE BANK OF NOVA SCOTIA
By: "Cynthia Thomas"
44 King Street West
16th Floor Title: Senior Relationship Mgr.
Toronto, Ontario
M5H 1H1 By: "Anthony S. Courtright"
Attention: Cynthia P. Thomas Title: Unit Head
Senior Relationship Manager
Telephone: 416-866-3548
Telecopier: 416-866-2009
Telex: 06-524712
BANK OF MONTREAL
By: "Surjit Rajpal"
24th Floor
First Canadian Place Title: Managing Director
Toronto, Ontario
M5X 1A1
Attention: Algis Vaitonis
Director
Corporate Banking
Telephone: 416-867-4092
Telecopier: 416-867-5818
Telex: 06-22735
THE TORONTO-DOMINION BANK
55 King Street West By: "Karl H. Schulz"
P.O. Box 1
Toronto-Dominion Centre Title: V-P, Corp. & Ivst. Bkng. Grp.
Toronto, Ontario
M5K 1A2
Attention: B.E. (Rick) Van Waterschoot
Manager
Corporate and Investment Banking Group
Telephone: 416-944-5824
Telecopier: 416-982-5018
Telex: 06-524267
BANK OF AMERICA CANADA
4 King Street West By: "Jai S. Menon"
18th Floor
Toronto, Ontario Title: Vice-President
M5H 1B6
Attention: Richard Hall
Assistant Vice President
Telephone: 416-863-4008
Telecopier: 416-863-5265
Telex: 06-219707
CHEMICAL BANK OF CANADA
100 Yonge Street By: "William T. Carrothers"
Suite 900
Toronto, Ontario Title: Vice President
M5C 2W1
Attention: Owen G. Roberts By: "Owen G. Roberts"
Vice-President
Telephone: 416-594-2259 Title: Vice President
Telecopier: 416-594-2266
Telex: 06-218241
CREDIT LYONNAIS CANADA
One Financial Place By: "David J. Farmer"
1 Adelaide Street East
Suite 2505 Title: Vice President
Toronto, Ontario
M5C 2V9
Attention: David Farmer
Vice President
Telephone: (416) 947-9355
Telecopier: (416) 947-9471
MORGAN BANK OF CANADA
Royal Bank Plaza By: "Katherine B. Stevenson"
South Tower
22nd Floor, P.O. Box 80 Title: Vice President
Toronto, Ontario
M5J 2J2
Attention: Katharine B. Stevenson
Vice President
Telephone: 416-981-9224
Telecopier: 416-865-1641
Telex: 06-23490
SWISS BANK CORPORATION
(CANADA)
P.O. Box 103 By: "Blaise Ganguin"
207 Queen's Quay West
Suite 78O Title: Associate Dir. Mrch. Bnkg.
Toronto, Ontario
Attention: Blaise Ganguin By: "Robin V.J. Scott"
Associate Director
Merchant Banking Title: Mrch. Bnkg. Director
Telephone: 416-203-4263
Telecopier: 416-203-4385
Telex: 06-217872
THE ROYAL TRUST COMPANY,
Custodian
By: "Edward Fujisawa"
Title: Senior Solicitor
