<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
CHRYSLER FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C>
MICHIGAN 38-0961430
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
</TABLE>
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(810) 948-3060
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
ROBERT A. LINK, ESQ.
CHRYSLER FINANCIAL CORPORATION
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(810) 948-3060
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------------
Copy to:
RENWICK D. MARTIN, ESQ.
BROWN & WOOD
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 839-5319
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
REGISTERED REGISTERED PRICE PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Asset Backed Securities... $11,156,250,000 100% $11,156,250,000 $2,231,250
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
------------------------------------
PURSUANT TO RULE 429, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT
ALSO RELATES TO, AND THIS REGISTRATION STATEMENT CONSTITUTES A POST-EFFECTIVE
AMENDMENT TO, REGISTRATION STATEMENT NO. 33-50285, WHICH BECAME EFFECTIVE ON
SEPTEMBER 23, 1993.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
INTRODUCTORY NOTE
This Registration Statement contains (i) a form of Prospectus relating to
the offering of series of Asset Backed Notes and/or Asset Backed Certificates by
various Premier Auto Trusts created from time to time by Chrysler Financial
Corporation and (ii) two forms of Prospectus Supplement relating to the offering
by Premier Auto Trust 199 - of the particular series of Asset Backed
Certificates or of Asset Backed Notes and Asset Backed Certificates described
therein. Each form of Prospectus Supplement relates only to the securities
described therein and is a form which may be used, among others, by Chrysler
Financial Corporation to offer Asset Backed Notes and/or Asset Backed
Certificates under this Registration Statement.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 5, 1994
PROSPECTUS SUPPLEMENT
(To Prospectus dated , 1994)
$
PREMIER AUTO TRUST 199 -
$ CLASS A-1 % ASSET BACKED NOTES
$ CLASS A-2 % ASSET BACKED NOTES
$ CLASS A-3 % ASSET BACKED NOTES
$ % ASSET BACKED CERTIFICATES
CHRYSLER FINANCIAL CORPORATION
SELLER
CHRYSLER CREDIT CORPORATION
SERVICER
---------------------
THE PREMIER AUTO TRUST 199 - (THE "TRUST") WILL BE GOVERNED BY AN AMENDED
AND RESTATED TRUST AGREEMENT, TO BE DATED AS OF , 199 , AMONG CHRYSLER
FINANCIAL CORPORATION (THE "SELLER"), , A WHOLLY OWNED SUBSIDIARY OF
THE SELLER (THE "COMPANY") AND , AS OWNER TRUSTEE. THE TRUST WILL
ISSUE $ AGGREGATE PRINCIPAL AMOUNT OF CLASS A-1 % ASSET BACKED NOTES
(THE "CLASS A-1 NOTES"), $ AGGREGATE PRINCIPAL AMOUNT OF CLASS A-2 %
ASSET BACKED NOTES (THE "CLASS A-2 NOTES") AND $ AGGREGATE PRINCIPAL
AMOUNT OF CLASS A-3 % ASSET BACKED NOTES (THE "CLASS A-3 NOTES" AND, TOGETHER
WITH THE CLASS A-1 NOTES AND THE CLASS A-2 NOTES, THE "NOTES") PURSUANT TO AN
INDENTURE TO BE DATED AS OF , 199 , BETWEEN THE TRUST AND
, AS INDENTURE TRUSTEE. THE TRUST WILL ALSO ISSUE $ AGGREGATE
PRINCIPAL AMOUNT OF % ASSET BACKED CERTIFICATES (THE "CERTIFICATES" AND,
TOGETHER WITH THE NOTES, THE "SECURITIES"). THE ASSETS OF THE TRUST WILL INCLUDE
A POOL OF MOTOR VEHICLE RETAIL INSTALLMENT SALE CONTRACTS (THE "RECEIVABLES"),
SECURED BY SECURITY INTERESTS IN THE MOTOR VEHICLES FINANCED THEREBY AND
INCLUDING CERTAIN MONIES DUE OR RECEIVED THEREUNDER ON OR AFTER THE RELATED
CUTOFF DATE (AS DEFINED HEREIN), TRANSFERRED TO THE TRUST BY THE SELLER ON OR
PRIOR TO THE CLOSING DATE AND MONIES ON DEPOSIT IN A TRUST ACCOUNT (THE
"PRE-FUNDING ACCOUNT") TO BE ESTABLISHED WITH THE INDENTURE TRUSTEE. ADDITIONAL
MOTOR VEHICLE RETAIL INSTALLMENT SALE CONTRACTS (THE "SUBSEQUENT RECEIVABLES")
WILL BE PURCHASED BY THE TRUST FROM THE SELLER FROM TIME TO TIME ON OR BEFORE
, 199 , FROM FUNDS ON DEPOSIT IN THE PRE-FUNDING ACCOUNT. THE NOTES
WILL BE SECURED BY THE ASSETS OF THE TRUST PURSUANT TO THE INDENTURE.
INTEREST ON ALL CLASSES OF NOTES WILL ACCRUE AT THE FIXED PER ANNUM
INTEREST RATES SPECIFIED ABOVE. INTEREST ON THE NOTES WILL GENERALLY BE PAYABLE
ON THE DAY[S] OF EACH MONTH (EACH, A "DISTRIBUTION DATE"), COMMENCING
, 199 . PRINCIPAL OF THE NOTES WILL BE PAYABLE ON EACH DISTRIBUTION
DATE TO THE EXTENT DESCRIBED HEREIN, EXCEPT THAT NO PRINCIPAL WILL BE PAID ON
THE CLASS A-2 NOTES UNTIL THE CLASS A-1 NOTES HAVE BEEN PAID IN FULL AND NO
PRINCIPAL WILL BE PAID ON THE CLASS A-3 NOTES UNTIL THE CLASS A-2 NOTES HAVE
BEEN PAID IN FULL.
(Continued on following page)
---------------------
THE NOTES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES REPRESENT BENEFICIAL
INTERESTS IN, THE TRUST ONLY AND DO NOT REPRESENT OBLIGATIONS OF OR
INTERESTS IN CHRYSLER FINANCIAL CORPORATION, CHRYSLER CREDIT
CORPORATION, THE COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NONE
OF THE NOTES, THE CERTIFICATES OR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC(1) DISCOUNT THE SELLER(1)(2)
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Per Class A-1 Note............................... % % %
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Per Class A-2 Note............................... % % %
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Per Class A-3 Note............................... % % %
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Per Certificate.................................. % % %
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Total............................................ $ $ $
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</TABLE>
(1) Plus accrued interest, if any, from , 199 .
(2) Before deducting expenses, estimated to be $ .
---------------------
The Notes and the Certificates are offered by the Underwriters when, as and
if issued and accepted by the Underwriters and subject to their right to reject
orders in whole or in part. It is expected that delivery of the Notes and the
Certificates will be made in book-entry form only through the Same Day Funds
Settlement System of The Depository Trust Company on or about the Closing Date.
---------------------
The date of this Prospectus Supplement is , 199 .
<PAGE> 4
(Continued from preceding page)
The Certificates will represent fractional undivided interests in the
Trust. Interest, to the extent of the Pass Through Rate specified above, will be
distributed to the Certificateholders on each Distribution Date. Principal, to
the extent described herein, will be distributed to the Certificateholders on
each Distribution Date commencing with the later of (i) the
Distribution Date next succeeding the Distribution Date on which the Class A-1
Notes were paid in full and (ii) the , 199 Distribution Date.
Distributions of principal and interest on the Certificates will be subordinated
in priority to payments due on the Notes as described herein. In addition, upon
any downgrading or withdrawal by any Rating Agency of its rating of any class of
Notes, no distributions of principal on the Certificates will be made until all
the Notes have been paid in full, unless such rating has been restored.
Each class of the Notes and the Certificates will be payable in full on the
applicable final scheduled Distribution Date as set forth herein. However,
payment in full of a class of Notes or of the Certificates could occur earlier
than such dates as described herein. In addition, the Class A-3 Notes will be
subject to redemption in whole, but not in part, and the Certificates will be
subject to prepayment in whole, but not in part, on any Distribution Date on
which the Servicer exercises its option to purchase the Receivables. The
Servicer may purchase the Receivables when the aggregate principal balance of
the Receivables shall have declined to 10% or less of the initial aggregate
principal balance of the Receivables purchased by the Trust. One or more classes
of the Notes will be subject to partial mandatory redemption and the
Certificates may be subject to partial mandatory prepayment, at a premium
described herein, in the event that funds remain in the Pre-Funding Account at
the end of the Funding Period (as defined herein).
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "SPECIAL
CONSIDERATIONS" HEREIN AND IN THE ACCOMPANYING PROSPECTUS.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE NOTES AND THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED
IN THE PROSPECTUS AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE NOTES OR THE
CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. TO THE EXTENT ANY STATEMENTS IN THIS
PROSPECTUS SUPPLEMENT CONFLICT WITH STATEMENTS IN THE PROSPECTUS, THE STATEMENTS
IN THIS PROSPECTUS SUPPLEMENT SHALL CONTROL.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES AND THE
CERTIFICATES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
REPORTS TO SECURITYHOLDERS
Unless and until Definitive Notes or Definitive Certificates are issued,
monthly and annual unaudited reports containing information concerning the
Receivables will be prepared by the Servicer and sent on behalf of the Trust
only to Cede & Co. ("Cede"), as nominee of the Depository Trust Company ("DTC")
and registered holder of the Notes and the Certificates. See "Certain
Information Regarding the Securities--Book-Entry Registration" and "--Reports to
Securityholders" in the accompanying Prospectus (the "Prospectus"). Such reports
will not constitute financial statements prepared in accordance with generally
accepted accounting principles. The Seller, as originator of the Trust, will
file with the Securities and Exchange Commission (the "Commission") such
periodic reports as are required under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the Commission
thereunder.
S-2
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SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used herein are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
<TABLE>
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Issuer................. Premier Auto Trust 199 - (the "Trust" or the "Issuer"), a
Delaware business trust established pursuant to a trust agreement
(as amended and restated on the Closing Date and as amended and
supplemented thereafter, the "Trust Agreement") dated as of
, 199 , among the Seller, , a wholly-owned
subsidiary of the Seller (the "Company"), and the Owner Trustee.
Seller................. Chrysler Financial Corporation (the "Seller" or "CFC").
Servicer............... Chrysler Credit Corporation (the "Servicer" or "CCC").
Indenture Trustee...... , as trustee under the Indenture (the "Indenture Trustee").
Owner Trustee.......... , as trustee under the Trust Agreement (the "Owner Trustee").
The Notes.............. The Trust will issue Asset Backed Notes (the "Notes") pursuant to an
Indenture to be dated as of , 199 (as amended and
supplemented from time to time, the "Indenture"), between the Issuer
and the Indenture Trustee, as follows: (1) Class A-1 %
Asset-Backed Notes (the "Class A-1 Notes") in the aggregate
principal amount of $ ; (2) Class A-2 % Asset Backed
Notes (the "Class A-2 Notes") in the aggregate principal amount of
$ ; and (3) Class A-3 % Asset Backed Notes (the "Class
A-3 Notes") in the aggregate principal amount of $ .
The Notes will be secured by the assets of the Trust pursuant to the
Indenture.
The Certificates....... The Trust will issue % Asset-Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") with
an aggregate initial Certificate Balance of $ . The
Certificates will represent fractional undivided interests in the
Trust and will be issued pursuant to the Trust Agreement.
The Receivables........ On , 199 (the "Closing Date"), the Trust will purchase
Receivables (the "Initial Receivables") having an aggregate
principal balance of approximately $ as of (the "Initial
Cutoff Date") from the Seller pursuant to a Sale and Servicing
Agreement to be dated as of , 199 (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"),
among the Trust, the Seller and the Servicer. On and following the
Closing Date, pursuant to the Sale and Servicing Agreement, the
Seller will be obligated, subject only to the availability thereof,
to sell, and the Trust will be obligated to purchase, subject to the
satisfaction of certain conditions set forth therein, additional
Receivables (the "Subsequent Receivables") from time to time during
the Funding Period having an aggregate principal balance equal to
approximately $ (such amount being equal to an amount on
deposit in the Pre-Funding Account (the "Pre-Funded Amount") on the
Closing Date). The Seller will designate as a cutoff date (each a
"Subsequent Cutoff Date") each date as of which payments in respect
of particular Subsequent Receivables are conveyed to the Trust. It
is expected that certain of the Subsequent Receivables arising
between the Initial Cutoff Date and the Closing Date will be
conveyed to the Trust on the Closing Date and that other Subsequent
</TABLE>
S-3
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<TABLE>
<S> <C>
Receivables will be conveyed to the Trust as frequently as daily
thereafter on dates specified by the Seller (each date on which
Subsequent Receivables are conveyed to the Trust being referred to
as a "Subsequent Transfer Date") occurring during the Funding
Period. See "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables; Subsequent
Receivables" herein.
The Initial Receivables have been selected, and the Subsequent
Receivables will be selected, from the contracts owned by the Seller
based on the criteria specified in the Sale and Servicing Agreement
and described herein and in the Prospectus. As of the Initial Cutoff
Date, the weighted average annual percentage rate of the Initial
Receivables was approximately %, the weighted average remaining
maturity of the Initial Receivables was approximately months and
the weighted average original maturity of the Initial Receivables
was approximately months. No Initial Receivable has, and no
Subsequent Receivable will have, a scheduled maturity later than
(the "Final Scheduled Maturity Date").
Subsequent Receivables may be originated by CCC at a later date
using credit criteria different from those which were applied to the
Initial Receivables and may be of a different credit quality and
seasoning. In addition, following the transfer of Subsequent
Receivables to the Trust, the characteristics of the entire pool of
Receivables included in the Trust may vary significantly from those
of the Initial Receivables. See "Special Considerations -- The
Receivables and the Pre-Funding Account" and "The Receivables Pool"
herein.
The "Pool Balance" at any time will represent the aggregate
principal balance of the Receivables at the end of the preceding
Collection Period, after giving effect to all payments (other than
Payaheads) received from Obligors, Advances and Purchase Amounts to
be remitted by the Servicer or the Seller, as the case may be, all
for such Collection Period and all losses realized on Receivables
liquidated during such Collection Period.
Terms of the Notes..... The principal terms of the Notes will be as described below:
A. Distribution
Dates................ Payments of interest and principal on the Notes will be made on the
day[s] of each month or, if any such day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date")
commencing , 199 . Each reference to a "Payment Date" in
the Prospectus shall refer to a Distribution Date herein. Payments
will be made to holders of record of the Notes (the "Noteholders")
as of the day immediately preceding such Distribution Date or, if
Definitive Notes are issued, as of the 15th day of the preceding
month (a "Record Date"). A "Business Day" is a day other than a
Saturday, a Sunday or a day on which banking institutions or trust
companies in the City of New York are authorized by law, regulation
or executive order to be closed.
B. Interest Rates.... The Interest Rates on the Notes will be as follows: (i) Class A-1
Notes, % per annum (the "Class A-1 Rate"), (ii) Class A-2 Notes,
% per annum (the "Class A-2 Rate"), and (iii) Class A-3 Notes,
% per annum (the "Class A-3 Rate" and, together with the Class
A-1 Rate and the Class A-2 Rate, the "Interest Rates").
C. Interest.......... Interest on the outstanding principal amount of the Notes of each
class will accrue at the applicable Interest Rate from the Closing
Date (in the case of the first Distribution Date) or from the second
day of the month preceding the month in which a Distribution Date
occurs to and including the first day of the
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S-4
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<TABLE>
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month of such Distribution Date (each an "Interest Period").
Interest on the Notes will be calculated on the basis of a 360-day
year of twelve 30-day months. See "Description of the
Notes -- Payments of Interest" herein.
D. Principal......... Principal of the Notes will be payable on each Distribution Date in
an amount equal to the sum of the Noteholders' Principal
Distributable Amount for the calendar month (the "Collection
Period") preceding such Distribution Date (in the case of the first
Distribution Date, including the period from , 199 to
and including , 199 ) to the extent of funds available
therefor. Subject to the reconciliation methodology referred to
below, the "Noteholders' Principal Distributable Amount" will be the
sum of (i) the Noteholders' Percentage of the Regular Principal
Distribution Amount (such "Regular Principal Distribution Amount"
being the amount of principal paid or, in certain circumstances,
scheduled to be paid with respect to the Receivables (exclusive of
Payaheads allocable to principal that have not been applied as
payments under the related Receivables in such Collection Period and
inclusive of Payaheads allocable to principal that have been applied
as payments under the related Receivables in such Collection Period)
plus, in certain circumstances, the principal balance of defaulted
Receivables, as calculated by the Servicer as described under
"Description of the Transfer and Servicing Agreements --
Distributions") plus (ii) the portion, if any, of the Total
Distribution Amount for such Collection Period that remains after
payment of (a) the Servicing Fee, (b) the interest due on the Notes,
(c) the portion of the Regular Principal Distribution Amount
allocated to the Noteholders pursuant to clause (i), (d) the
interest due on the Certificates, (e) the portion of the Regular
Principal Distribution Amount distributed to the Certificateholders
as described below under "Description of the
Certificates -- Distributions of Principal Payments," and (f) the
amount, if any, required to be deposited in the Reserve Account on
such Distribution Date (the "Accelerated Principal Distribution
Amount"). [Or, state other method for determining the amount of
principal to be paid on the Notes.]
On the Business Day immediately preceding each Distribution Date (a
"Determination Date") the Indenture Trustee will determine the
amount in the Collection Account allocable to interest and the
amount allocable to principal on the basis described under
"Description of the Transfer and Servicing
Agreements -- Distributions -- Allocation of Collections on
Receivables; Reconciliation" in the Prospectus, and payments to
Securityholders on the following Distribution Date will be based on
such allocation, with the appropriate adjustments in respect of the
prior Collection Period as described under such heading.
Payments of principal on the Notes will be made on each Distribution
Date in the amounts and subject to the priorities described in
"Description of the Notes -- Payments of Principal" herein.
The outstanding principal amount of the Class A-1 Notes, to the
extent not previously paid, will be payable on (the "Class
A-1 Final Scheduled Distribution Date"), the outstanding principal
amount of the Class A-2 Notes, to the extent not previously paid,
will be payable on (the "Class A-2 Final Scheduled
Distribution Date") and the outstanding principal amount of the
Class A-3 Notes, to the extent not previously paid, will be payable
on (the "Class A-3 Final Scheduled Distribution Date").
</TABLE>
S-5
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<TABLE>
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E. Optional
Redemption........ The Class A-3 Notes will be redeemed in whole, but not in part, on
any Distribution Date on which the Servicer exercises its option to
purchase the Receivables, which can occur after the Pool Balance
declines to 10% or less of the Initial Pool Balance, at a redemption
price equal to the unpaid principal amount of the Class A-3 Notes
plus accrued and unpaid interest thereon. See "Description of the
Notes -- Optional Redemption" herein. The "Initial Pool Balance"
will equal the sum of (i) the aggregate principal balance of the
Initial Receivables as of the Initial Cutoff Date plus (ii) the
aggregate principal balances of all Subsequent Receivables added to
the Trust on or prior to such date as of their respective Subsequent
Cutoff Dates.
F. Mandatory
Redemption........ A class or classes of Notes then outstanding will be redeemed in
part on the Distribution Date on or immediately following the last
day of the Funding Period in the event that amounts remain on
deposit in the Pre-Funding Account after giving effect to the
purchase of all Receivables, including any such purchase on such
date (a "Mandatory Redemption"). If the amount on deposit in the
Pre-Funding Account on such date is equal to $ or less,
then such amount will be used to redeem the Class A-1 Notes up to an
amount not to exceed their outstanding balance, with any remaining
amount used to redeem the Class A-2 Notes. If the amount on deposit
in the Pre-Funding Account on such date is greater than
$ , then such amount will be used to redeem each class of
the Notes and the Certificates. The aggregate principal amount of
each class of Notes to be redeemed will be an amount equal to such
class' Pre-Funded Percentage of the amount then on deposit in the
Pre-Funding Account. The "Pre-Funded Percentage" with respect to a
class of Notes or the Certificates is the percentage derived from
the fraction, the numerator of which is the initial principal
balance of such class of Notes or the initial Certificate Balance,
as the case may be, and the denominator of which is the sum of the
initial principal balance of the Notes and the initial Certificate
Balance.
A limited recourse mandatory prepayment premium (the "Note
Prepayment Premium") will be payable by the Trust to the Noteholders
pursuant to a Mandatory Redemption if the amount on deposit in the
Pre-Funding Account exceeds $ . The Note Prepayment Premium
for each class of Notes will equal the excess, if any, discounted as
described below, of (i) the amount of interest that would accrue on
such class' portion of any remaining Pre-Funded Amount (the "Note
Prepayment Amount") at the Interest Rate borne by such class of
Notes during the period commencing on and including the Distribution
Date on which such Note prepayment amount is required to be
distributed to Noteholders of such class to but excluding
, in the case of the Class A-1 Notes, , in the
case of the Class A-2 Notes and , in the case of the Class
A-3 Notes, over (ii) the amount of interest that would have accrued
on such Note Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on
the Determination Date preceding such Distribution Date on the
, in the case of the Class A-1 Notes, the , in
the case of the Class A-2 Notes, and the , in the case of
the Class A-3 Notes. Such excess shall be discounted to present
value to such Distribution Date at the applicable yield described in
clause (ii) above. The Trust's obligation to pay the Note Prepayment
Premium shall be limited to funds which are received from the Seller
under the Sale and Servicing Agreement as liquidated damages for the
failure to deliver Subsequent
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S-6
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Receivables having an aggregate principal amount equal to the
Pre-Funded Amount. No other assets of the Trust will be available
for the purpose of making such payment.
Terms of the
Certificates......... The principal terms of the Certificates will be as described below:
A. Distribution
Dates................ Distributions with respect to the Certificates will be made on each
Distribution Date, commencing , 199 . Distributions will
be made to holders of record of the Certificates (the
"Certificateholders", and, together with the Noteholders, the
"Securityholders") as of the related Record Date (which will be the
15th day of the month if Definitive Certificates are issued).
B. Pass Through
Rate................. % per annum (the "Pass Through Rate").
C. Interest.......... On each Distribution Date, the Owner Trustee will distribute pro
rata to Certificateholders accrued interest at the Pass Through Rate
on the outstanding Certificate Balance generally to the extent of
funds available following payment of the Servicing Fee and
distributions in respect of the Notes from the Total Distribution
Amount and the Reserve Account. Interest will be calculated on the
basis of a 360-day year consisting of twelve 30-day months. Interest
in respect of a Distribution Date will accrue from the Closing Date
(in the case of the first Distribution Date) or from the second day
of the calendar month preceding such Distribution Date to and
including the fist day of the calendar month in which such
Distribution Date occurs.
D. Principal......... On each Distribution Date commencing on the later of (i) the
199 Distribution Date and (ii) the Distribution
Date next succeeding the Distribution Date on which the Class A-1
Notes were paid in full, principal of the Certificates will be
payable in an amount generally equal to the Certificateholders'
Principal Distributable Amount for the Collection Period preceding
such Distribution Date, to the extent of funds available therefor
following payment of the Servicing Fee and payments of interest and
principal in respect of the Notes and the distribution of interest
in respect of the Certificates; provided, however, that upon any
reduction or withdrawal by any Rating Agency of its rating of any
class of Notes, no distributions of principal on the Certificates
will be made until all the Notes have been paid in full or until
such rating has been restored. The Certificateholders' Principal
Distributable Amount will be based on the Certificateholders'
Percentage of the Regular Principal Distribution Amount, and will be
calculated by the Servicer in the manner described under
"Description of the Transfer and Servicing
Agreements -- Distributions," subject to the reconciliation
methodology described in the Prospectus under "Description of the
Transfer and Servicing Agreements -- Distributions -- Allocation of
Collections on Receivables; Reconciliation."
The outstanding principal amount, if any, of the Certificates will
be payable in full on , 199 (the "Final Scheduled
Distribution Date").
E. Optional
Prepayment........ If the Servicer exercises its option to purchase the Receivables,
which can occur after the Pool Balance declines to 10% or less of
the Initial Pool Balance, the Certificateholders will receive an
amount in respect of the Certificates equal to the Certificate
Balance together with accrued interest at the Pass Through Rate, and
the Certificates will be retired. See "Description of the
Certificates -- Optional Prepayment" herein.
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F. Mandatory
Repurchase........ The Certificates will be prepaid, in part, pro rata on the basis of
their initial principal amounts, on the Distribution Date on or
immediately following the last day of the Funding Period in the
event that the amount on deposit in the Pre-Funding Account after
giving effect to the purchase of all Receivables, including any such
purchase on such date exceeds $ (a "Mandatory Repurchase").
The aggregate principal amount of Certificates to be prepaid will be
an amount equal to the Certificates' Pre-Funded Percentage of the
amount then on deposit in the Pre-Funding Account.
A limited recourse mandatory prepayment premium (the "Certificate
Prepayment Premium") will be payable by the Trust to the
Certificateholders at the time of any prepayment of the Certificates
pursuant to a Mandatory Repurchase. The Certificate Prepayment
Premium will equal the excess, if any, discounted as described
below, of (i) the amount of interest that would accrue on the
Certificates' portion of any remaining Pre-Funded Amount (the
"Certificate Prepayment Amount") at the Pass Through Rate during the
period commencing on and including the Distribution Date on which
such Certificate Prepayment Amount is required to be distributed to
Certificateholders to but excluding , over (ii) the amount
of interest that would have accrued on such Certificate Prepayment
Amount over the same period at a per annum rate of interest equal to
the bond equivalent yield to maturity on the Determination Date
preceding such Distribution Date on the . Such excess will
be discounted to present value to such Distribution Date at the
yield described in clause (ii) above. The Trust's obligation to pay
the Certificate Prepayment Premium will be limited to funds which
are received from the Seller under the Sale and Servicing Agreement
as liquidated damages for the failure to deliver Subsequent
Receivables having an aggregate principal amount equal to the
Pre-Funded Amount. No other assets of the Trust will be available
for the purpose of making such payment.
Pre-Funding Account.... During the period (the "Funding Period") from and including the
Closing Date until the earliest of (a) the Determination Date on
which the amount on deposit in the Pre-Funding Account is equal to
$ or less, (b) the occurrence of an Event of Default under
the Indenture or a Servicer Default under the Sale and Servicing
Agreement, (c) the occurrence of certain events of insolvency with
respect to the Seller or the Servicer and (d) the Determination Date
with respect to the , 199 Determination Date, the
Pre-Funded Amount will be maintained as an account in the name of
the Indenture Trustee (the "Pre-Funding Account"). The Pre-Funded
Amount will initially equal approximately $ , and, during
the Funding Period, will be reduced by the amount thereof used to
purchase Subsequent Receivables in accordance with the Sale and
Servicing Agreement and the amount thereof deposited in the Reserve
Account in connection with the purchase of such Subsequent
Receivables. The Seller expects that the Pre-Funded Amount will be
reduced to $ or less by the Distribution Date.
Any Pre-Funded Amount remaining at the end of the Funding Period
will be payable to the Certificateholders and Noteholders as
described above.
Reserve Account........ The Reserve Account will be created with an initial deposit by the
Seller on the Closing Date of cash or Eligible Investments having a
value at least equal to % of the Initial Pool Balance plus an
amount attributable to the difference between the anticipated
investment earnings on the Pre-Funded Amount and the weighted
average interest expense on the portion of the Notes and
Certificates
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represented by the Pre-Funded Amount. On each Subsequent Transfer
Date, cash or Eligible Investments having a value approximately
equal to % of the aggregate principal balance of the Subsequent
Receivables conveyed to the Trust on such Subsequent Transfer Date
will be withdrawn from the Pre-Funding Account from amounts
otherwise distributable to the Seller in connection with the sale of
Subsequent Receivables and deposited in the Reserve Account. The
amount initially deposited in the Reserve Account by the Seller
together with the aggregate amount transferred from the Pre-Funding
Account to the Reserve Account on each Subsequent Transfer Date is
referred to as the "Reserve Account Initial Deposit".
Certain amounts in the Reserve Account on any Distribution Date
(after giving effect to all distributions to be made on such
Distribution Date, as reconciled on such Distribution Date) in
excess of the Specified Reserve Account Balance for such
Distribution Date will be released to the Company (except to the
extent described under "Description of the Transfer and Servicing
Agreements -- Reserve Account"). Subject to reduction as described
below, the "Specified Reserve Account Balance" with respect to any
Distribution Date generally will be equal to the sum of (i) %
of the Initial Pool Balance, plus an amount related to the
difference between anticipated investment earnings on the
outstanding Pre-Funded Amount and the weighted average interest
expense on the portion of the Notes and Certificates represented by
the outstanding Pre-Funded Amount and (ii) % of the Pool
Balance on the first day of the related Collection Period. However,
so long as on any Distribution Date (except the first Distribution
Date) the sum of (x) the outstanding principal balance of the
Securities (after giving effect to distributions made on the prior
Distribution Date) and (y) the aggregate amount of Payaheads that
have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection
Period is less than or equal to the sum of % of (a) the Pool
Balance on the first day of the related Collection Period and (b)
the Pre-Funded Amount on such date, then the portion of the
Specified Reserve Account Balance set forth in clause (i) above will
be reduced to % of the Initial Pool Balance. In addition, so
long as on any Distribution Date (except the first Distribution
Date) the sum of (x) the outstanding principal balance of the
Securities (after giving effect to distributions made on the prior
Distribution Date) and (y) the aggregate amount of Payaheads that
have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection
Period is less than the equal to the sum of % of (a) the Pool
Balance on the first day of the related Collection Period and (b)
the Pre-Funded Amount on such day, then such portion of the
Specified Reserve Account Balance set forth in clause (i) above will
be reduced to % of the Initial Pool Balance. With respect to
the portion of the Specified Reserve Account Balance set forth in
clause (ii) above, so long as on any Distribution Date (except the
first Distribution Date) the sum of (x) the outstanding principal
balance of the Securities (after giving effect to distributions made
on the prior Distribution Date) and (y) the aggregate amount of
Payaheads that have been collected but not yet applied as payments
under the related Receivables as of the first day of the related
Collection Period is less than or equal to the sum of % of (a)
the Pool Balance on the first day of the related Collection Period
and (b) the Pre-Funded Amount on such day, then such portion will be
reduced to an amount equal to the product of (I) the Pool Balance on
the first day of the related Collection Period and (II) the
percentage (which shall not be greater than % or less than
zero) equal to (X) the
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percentage derived from the fraction, the numerator of which is the
outstanding principal balance of the Securities (after giving effect
to distributions made on the prior Distribution Date) and the
denominator of which is such Pool Balance less (Y) %. [The
Specified Reserve Account Balance is further subject to adjustment
in certain circumstances described herein.] Funds will be withdrawn
from the Reserve Account up to the Available Amount to the extent
that the Total Distribution Amount with respect to any Collection
Period remaining after the Servicing Fee is paid is less than the
Noteholders' Distributable Amount and will be deposited in the Note
Distribution Account for distribution to the Noteholders on the
related Distribution Date. In addition, after giving effect to such
withdrawal, funds will be withdrawn from the Reserve Account up to
the Available Amount (as reduced by any withdrawal pursuant to the
preceding sentence) to the extent that the portion of the Total
Distribution Amount remaining after payment of the Servicing Fee and
the deposit of the Noteholders' Distributable Amount in the Note
Distribution Account is less than the Certificateholders'
Distributable Amount and will be deposited in the Certificate
Distribution Account for distribution to the Certificateholders. If
funds applied in accordance with the preceding sentence are
insufficient to distribute the interest due on the Certificates,
subject to certain limitations, funds will be withdrawn from the
Reserve Account and applied to distribute interest on the
Certificates to the extent of the Certificate Interest Reserve
Amount. On each Distribution Date, the Reserve Account will be
reinstated up to the Specified Reserve Account Balance to the extent
of the portion, if any, of the Total Distribution Amount remaining
after payment of the Servicing Fee, the deposit of the Noteholders'
Distributable Amount into the Note Distribution Account and the
deposit of the Certificateholders' Distributable Amount into the
Certificate Distribution Account and after giving effect to any
reconciliation on such Distribution Date in respect of the
distributions made on the preceding Distribution Date. The Reserve
Account will be maintained as an account in the name of the
Indenture Trustee.
Collection Account..... Except under certain conditions described herein, the Servicer will
be required to remit collections received with respect to the
Receivables within two Business Days of receipt thereof to one or
more accounts in the name of the Indenture Trustee (the "Collection
Account"). Pursuant to the Sale and Servicing Agreement, the
Servicer will have the revocable power to instruct the Indenture
Trustee to withdraw funds on deposit in the Collection Account and
to apply such funds on each Distribution Date to the following (in
the priority indicated): (i) the Servicing Fee for the prior
Collection Period and any overdue Servicing Fees to the Servicer,
(ii) the Noteholders' Interest Distributable Amount and the
Noteholders' Principal Distributable Amount into the Note
Distribution Account, (iii) the Certificateholders' Interest
Distributable Amount and, commencing on the later of (a) the
199 Distribution Date and (b) the Distribution
Date next succeeding the Distribution Date on which the Class A-1
Notes were paid in full, the Certificateholders' Principal
Distributable Amount into the Certificate Distribution Account and
(iv) the remaining balance, if any, to the Reserve Account.
Tax Status............. In the opinion of Brown & Wood ("Federal Tax Counsel"), for federal
income tax purposes, the Notes will be characterized as debt, and
the Trust will not be characterized as an association (or a publicly
traded partnership) taxable as a corporation. In the opinion of
Allan L. Ronquillo, the general counsel of the Seller and the
Servicer, ("Michigan Tax Counsel"), the same characterization will
apply for Michigan income and single business tax purposes. Each
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Noteholder, by the acceptance of a Note, will agree to treat the
Notes as indebtedness, and each Certificateholder, by the acceptance
of a Certificate, will agree to treat the Trust as a partnership in
which the Certificateholders are partners for federal income and
Michigan income and single business tax purposes. Alternative
characterizations of the Trust and the Certificates are possible,
but would not result in materially adverse tax consequences to
Certificateholders. See "Certain Federal Income Tax Consequences"
and "Certain State Tax Consequences with respect to Trusts for which
a Partnership Election is Made" in the Prospectus for additional
information concerning the application of federal income and
Michigan tax laws to the Trust and the Securities.
ERISA Considerations... Subject to the considerations discussed under "ERISA Considerations"
herein and in the Prospectus, the Notes are eligible for purchase by
employee benefit plans.
The Certificates may not be acquired by any employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") or by an individual retirement
account. See "ERISA Considerations" herein and in the Prospectus.
[Legal Investment...... The Class A-1 Notes will be eligible securities for purchase by
money market funds under Rule 2a-7 under the Investment Company Act
of 1940, as amended.]
Rating of the Notes.... It is a condition to the issuance of the Notes that they be rated in
the highest investment rating category by at least two nationally
recognized rating agencies. However, the rating agencies do not
evaluate, and the rating does not address, the likelihood that the
Note Prepayment Premium will be paid. There can be no assurance that
a rating will not be lowered or withdrawn by a rating agency if
circumstances so warrant.
Rating of the
Certificates......... It is condition of the issuance of the Certificates that they be
rated [at least] " " or its equivalent by at least two nationally
recognized rating agencies. However, the rating agencies do not
evaluate, and the rating does not address, the likelihood that the
Certificate Prepayment Premium will be paid. There can be no
assurance that a rating will not be lowered or withdrawn by a rating
agency if circumstances so warrant.
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SPECIAL CONSIDERATIONS
Limited Liquidity. There is currently no secondary market for the
Securities. Each Underwriter currently intends to make a market in the
Securities for which it is an Underwriter, but it is under no obligation to do
so. There can be no assurance that a secondary market will develop or, if a
secondary market does develop, that it will provide the Securityholders with
liquidity of investment or that it will continue for the life of the Securities.
The Receivables and the Pre-Funding Account. On the Closing Date, the
Seller will transfer to the Trust the approximately $ of Initial
Receivables and the approximately $ Pre-Funded Amount on deposit in the
Pre-Funding Account. If the principal amount of eligible Receivables originated
by CCC during the Funding Period is less than the Pre-Funded Amount, the Seller
will have insufficient Receivables to sell to the Trust on the Subsequent
Transfer Dates, thereby resulting in a prepayment of principal to the
Noteholders and the Certificateholders as described in the following paragraph.
See "Social, Economic and Other Factors" and "Trust's Relationship to the Seller
and Chrysler Credit Corporation; Financial Condition of Seller and Chrysler
Corporation" below. In addition, any conveyance of Subsequent Receivables is
subject to the satisfaction, on or before the related Subsequent Transfer Date,
of the following conditions precedent, among others: (i) each such Subsequent
Receivable must satisfy the eligibility criteria specified in the Sale and
Servicing Agreement (including that such Subsequent Receivable has not been
repurchased by the Seller through the exercise of optional redemption provisions
contained in other securitization transactions); (ii) the Seller will not select
such Subsequent Receivables in a manner that it believes is adverse to the
interests of the Noteholders or the Certificateholders; (iii) as of the related
Subsequent Cutoff Date, the Receivables in the Trust at that time, including the
Subsequent Receivables to be conveyed by the Seller as of such Subsequent Cutoff
Date, will satisfy the parameters described under "The Receivables Pool" herein
and under "The Receivables Pools" in the Prospectus; (iv) the applicable Reserve
Account Initial Deposit for such Subsequent Transfer Date shall have been made;
and (v) the Seller shall have executed and delivered to the Trust (with a copy
to the Indenture Trustee) a written assignment conveying such Subsequent
Receivables to the Trust (including a schedule identifying such Subsequent
Receivables). Moreover, any such conveyance of Subsequent Receivables made
during any given Collection Period will also be subject to the satisfaction, on
or about the fifteenth day of the month following such Collection Period, of the
following conditions subsequent, among others: (a) the Seller will deliver
certain opinions of counsel to the Owner Trustee, Indenture Trustee and the
Rating Agencies with respect to the validity of the conveyance of all such
Subsequent Receivables conveyed during such Collection Period; (b) the Trust and
the Indenture Trustee shall have received written confirmation from a firm of
certified independent public accountants that, as of the end of the preceding
Collection Period, the Receivables in the Trust at that time, including the
Subsequent Receivables conveyed by the Seller during such Collection Period,
satisfied the parameters described under "The Receivables Pool" herein and under
"The Receivables Pools" in the Prospectus; and (c) the Rating Agencies shall
have each notified the Seller in writing that, following the addition of all
such Subsequent Receivables, each class of the Notes and the Certificates will
be rated in the same rating category as they were rated by the Rating Agencies
on the Closing Date. The Seller will immediately repurchase any Subsequent
Receivable, at a price equal to the Purchase Amount thereof, upon the failure of
the Seller to satisfy any of the foregoing conditions subsequent with respect
thereto. Such confirmation of the ratings of the Notes and the Certificates may
depend on factors other than the characteristics of the Subsequent Receivables,
including the delinquency, repossession and net loss experience on the
automobile and light duty truck receivables in the portfolio serviced by CCC.
To the extent that amounts on deposit in the Pre-Funding Account have not
been fully applied to the conveyance of Subsequent Receivables to the Trust by
the end of the Funding Period and such amount exceeds $ , the
Noteholders and the Certificateholders will receive, on the Distribution Date on
or immediately following the last day of the Funding Period, a prepayment of
principal in an amount equal to the applicable Pre-Funded Percentage, in respect
of a class of the Notes or the Certificates, of the Pre-Funded Amount remaining
in the Pre-Funding Account following the purchase of any Subsequent Receivables
on such Distribution Date. If such remaining Pre-Funded Amount is equal to
$ or less, the entire amount thereof will be paid as principal of the
Class A-1 Notes up to an amount not to exceed their outstanding balance,
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with any remaining amount used to redeem the Class A-1 to A-2 Notes. It is
anticipated that the principal amount of Subsequent Receivables sold to the
Trust will not be exactly equal to the amount on deposit in the Pre-Funding
Account and that therefore there will be at least a nominal amount of principal
prepaid to the Class A-1 Noteholders.
Each Subsequent Receivable must satisfy the eligibility criteria specified
in the Sale and Servicing Agreement at the time of its addition. However,
Subsequent Receivables may have been originated by CCC at a later date using
credit criteria different from those which were applied to the Initial
Receivables and may be of a different credit quality and seasoning. In addition,
an increasing percentage of the Subsequent Receivables may be Fixed Value
Receivables or Receivables generated under the Market Value Pricing program.
Therefore, following the transfer of Subsequent Receivables to the Trust, the
characteristics of the entire Receivables Pool included in the Trust may vary
significantly from those of the Initial Receivables. See "The Receivables Pool"
herein and "The Receivables Pools" in the Prospectus.
Social, Economic and Other Factors. The ability of CCC to generate
Subsequent Receivables is largely dependent upon the level of retail sales of
automobiles and light duty trucks. The level of retail sales of automobiles and
light duty trucks may change as a result of a variety of social and economic
factors. Economic factors include interest rates, unemployment levels, the rate
of inflation and consumer perceptions of economic conditions generally. However,
the Seller is unable to determine and has no basis to predict whether or to what
extent economic or social factors will affect the level of vehicle sales.
Trust's Relationship to the Seller and Chrysler Credit Corporation;
Financial Condition of Seller and Chrysler Corporation. Neither the Seller nor
CCC is generally obligated to make any payments in respect of the Notes, the
Certificates or the Receivables. However, the ability of the Seller to convey
Subsequent Receivables on Subsequent Transfer Dates is completely dependent upon
the generation of additional receivables by CCC. The ability of CCC to generate
receivables is in turn dependent to a large extent on the sales of automobiles
and light duty trucks manufactured or distributed by Chrysler Corporation and
its consolidated subsidiaries ("Chrysler"). If, during the Funding Period,
Chrysler were temporarily or permanently no longer manufacturing or distributing
vehicles, the rate of sales of automobiles and light duty trucks manufactured by
Chrysler would decrease, adversely affecting the ability of the Seller to sell
Subsequent Receivables to the Trust. The use of incentive programs (e.g.,
manufacturers' rebate programs) also may affect retail sales. There can be no
assurance, therefore, that CCC will continue to generate receivables at the same
rate as in prior years. In addition, if CCC were to cease acting as Servicer,
delays in processing payments on the Receivables and information in respect
thereof could occur and result in delays in payments to the Securityholders.
Chrysler reported earnings before income taxes of $1.6 billion for the
second quarter of 1994, compared with $1.1 billion for the second quarter of
1993. For the first six months of 1994, Chrysler reported earnings before income
taxes and the cumulative effect of changes in accounting principles of $3.1
billion, compared with $2.0 billion for the comparable period of 1993. Pre-tax
earnings for the second quarter and first six months of 1993 included gains on
sales of automotive assets and investments of $171 million.
The improvement in operating results in the second quarter and first six
months of 1994 over the corresponding periods of 1993 resulted from an increase
in sales volume and pricing actions, including lower per unit sales incentives,
partially offset by increased employee costs. Chrysler's worldwide factory car
and truck sales for the three and six months ended June 30, 1994 were 702,802
units, a 7 percent increase from the second quarter of 1993, and 1,443,400
units, an 11 percent increase over the first six months of 1993. Combined U.S.
and Canadian dealers' days supply of vehicle inventory decreased to 45 days at
June 30, 1994 from 63 days at December 31, 1993 and 50 days at June 30, 1993.
Net earnings for the second quarter of 1994 were $956 million, or $2.61 per
common share, compared with $685 million, or $1.86 per common share, in the
second quarter of 1993. Net earnings for the six months ended June 30, 1994 were
$1.9 billion, compared to a net loss of $3.8 billion for the comparable period
of 1993. The net loss for the first six months of 1993 resulted from a charge of
$4.7 billion, or $13.86 per common share, for the cumulative effect of a change
in accounting principle related to the adoption of Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits
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Other Than Pensions." Results for the first six months of 1993 also included a
charge of $283 million, or $0.84 per common share, for the cumulative effect of
a change in accounting principle relating to the adoption of SFAS No. 112,
"Employers' Accounting for Postemployment Benefits."
Chrysler reported earnings before income taxes and the cumulative effect of
changes in accounting principles of $3.8 billion in 1993, compared with $934
million in 1992. The earnings in 1993 included a gain on sales of automotive
assets and investments of $265 million. Earnings in 1992 included a gain on the
sale of an automotive investment of $142 million, a $110 million charge for
reducing investments of Chrysler Canada Ltd. and certain of its employee benefit
plans in a real estate investment concern to their estimated net realizable
value, and a $101 million restructuring charge related to the realignment of
Chrysler's short-term vehicle rental subsidiaries. Excluding the effect of these
items, Chrysler's pre-tax earnings for 1993 and 1992 were $3.6 billion and $1.0
billion, respectively.
The improvement in 1993 over 1992 was primarily the result of a substantial
increase in unit sales volume, pricing actions, including significantly lower
per unit sales incentives, and an improved mix of higher-margin products,
partially offset by increased labor and benefit costs. Chrysler's worldwide
factory car and truck sales during 1993 increased 14 percent to 2,475,738 units.
U.S. and Canadian dealers' days supply of vehicle inventory decreased to 63 days
at December 31, 1993 from 72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect of
changes in accounting principles, Chrysler reported a net loss for 1993 of $2.6
billion, or $7.62 per common share, compared with net earnings of $723 million,
or $2.21 per common share for 1992. The net loss for 1993 resulted from a charge
of $4.7 billion, or $13.57 per common share, for the cumulative effect of a
change in accounting principle related to the adoption of SFAS No. 106. Also
included in the 1993 results was a charge of $283 million, or $0.82 per common
share, for the cumulative effect of a change in accounting principle relating to
the adoption of SFAS No. 112. Net earnings for 1992 included a $218 million, or
$0.74 per common share, favorable cumulative effect of a change in accounting
principle relating to the adoption of SFAS No. 109, "Accounting for Income
Taxes".
During 1992 and 1993, Chrysler took various actions to strengthen its
financial condition, improve liquidity and add to its equity base in order to
ensure its ability to carry out its new product development and facility
modernization programs without significant interruption. In the second and third
quarters of 1993, Chrysler sold its remaining 50.3 million shares of Mitsubishi
Motors Corporation ("MMC") stock for net proceeds of $329 million and sold the
plastics operations of its Acustar division for net proceeds of $132 million. In
February 1993, Chrysler issued 52 million shares of common stock for net
proceeds of $1.95 billion. In 1992, Chrysler sold 43.6 million shares of MMC
stock for net proceeds of $215 million and issued 1.7 million shares of
convertible preferred stock for net proceeds of $836 million.
CFC's earnings before taxes were $69 million and $144 million for the three
and six months ended June 30, 1994, which compares to $62 million and $112
million for the comparable periods of 1993, before the cumulative effect of
changes in accounting principles. The increase in 1994 earnings before taxes and
accounting changes resulted from higher levels of automotive financing and lower
provisions for credit losses, partially offset by reduced retail automotive
margins.
CFC's net earnings were $44 million and $91 million for the three and six
months ended June 30, 1994 compared to $44 million and $51 million in the
comparable periods of 1993. Net earnings for the six months ended June 30, 1993
included charges totaling $30 million from the adoption of SFAS No. 106 and SFAS
No. 112.
CFC reported net earnings of $129 million for 1993 compared to $231 million
for 1992. Accounting changes in 1993 and 1992 negatively impact net earnings
comparison by $81 million. Net earnings for 1993 included a $30 million
after-tax charge from the adoption of SFAS No. 106 and SFAS No. 112, while 1992
net earnings included a $51 million favorable after-tax adjustment from the
adoption of SFAS No. 109.
CFC's earnings before the cumulative effect of changes in accounting
principles were $159 million for 1993 and $180 million for 1992. The decline in
earnings before accounting changes resulted largely from higher borrowing costs
incurred under CFC's revolving credit agreements.
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Both Chrysler and CFC regained investment grade credit ratings in 1993. The
improved credit ratings reflect Chrysler's improved operating results, the
significant improvements in Chrysler's balance sheet (including reductions in
its outstanding debt and unfunded pension obligation), and CFC's improved
liquidity.
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information with
the Commission. For further information regarding Chrysler and CFC reference is
made to such reports and other information which are available as described
under "Available Information" in the Prospectus.
Subordination; Limited Assets. Distributions of interest and principal on
the Certificates will be subordinated in priority of payment to interest and
principal due on the Notes. Consequently, the Certificateholders will not
receive any distributions with respect to a Collection Period until the full
amount of interest on and principal of the Notes on such Distribution Date has
been deposited in the Note Distribution Account. The Certificateholders will not
receive any distributions of principal until after the later to occur of (i) the
Distribution Date next succeeding the Distribution Date on which
the Class A-1 Notes were paid in full and (ii) the Distribution
Date. Moreover, upon any reduction or withdrawal by any Rating Agency of its
rating of any class of Notes (see "-- Ratings of the Securities"), the
Certificateholders will not receive any distributions of principal until after
all the Notes have been paid in full or until such rating has been restored.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables, the
Pre-Funding Account and the Reserve Account. Holders of the Notes and the
Certificates must rely for repayment upon payments on the Receivables and, if
and to the extent available, amounts on deposit in the Pre-Funding Account and
the Reserve Account. The Pre-Funding Account will be available only during the
Funding Period and is designed solely to cover obligations of the Trust relating
to a portion of its funds not invested in Receivables and is not designed to
cover losses on the Receivables. Similarly, although funds in the Reserve
Account will be available on each Distribution Date to cover shortfalls in
distributions of interest and principal on the Notes and the Certificates,
amounts to be deposited in the Reserve Account are limited in amount. If the
Reserve Account is exhausted, the Trust will depend solely on current
distributions on the Receivables to make payments on the Notes and the
Certificates.
Ratings of the Securities. It is a condition to the issuance of each class
of the Notes and of the Certificates that each class of the Notes be rated in
the highest rating category, and the Certificates be rated [at least] "A" or its
equivalent, by at least two nationally recognized rating agencies (the "Rating
Agencies"). A rating is not a recommendation to purchase, hold or sell
Securities, inasmuch as such rating does not comment as to market price or
suitability for a particular investor. The ratings of the Securities address the
likelihood of the payment of principal and interest on the Securities pursuant
to their terms. However, the Rating Agencies do not evaluate, and the ratings of
the Securities do not address, the likelihood that the Note Prepayment Premium
or the Certificate Prepayment Premium will be paid. There can be no assurance
that a rating will remain for any given period of time or that a rating will not
be lowered or withdrawn entirely by a Rating Agency if in its judgment
circumstances in the future so warrant.
THE TRUST
GENERAL
The Issuer, Premier Auto Trust 199 - , is a business trust formed under the
laws of the State of Delaware pursuant to the Trust Agreement for the
transactions described in this Prospectus Supplement. After its formation, the
Trust will not engage in any activity other than (i) acquiring, holding and
managing the Receivables and the other assets of the Trust and proceeds
therefrom, (ii) issuing the Notes and the Certificates, (iii) making payments on
the Notes and the Certificates and (iv) engaging in other activities that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith.
S-15
<PAGE> 18
The Trust will initially be capitalized with equity equal to the
Certificate Balance of $ excluding amounts deposited in the Reserve
Account. Certificates with an original principal balance of $ will be
sold to the Company and the remaining equity interest will be sold to third
party investors that are expected to be unaffiliated with the Seller, the
Servicer or their affiliates or the Trust. The equity of the Trust, together
with the net proceeds from the sale of the Notes, will be used by the Trust to
purchase the Initial Receivables from the Seller pursuant to the Sale and
Servicing Agreement and to fund the deposit of the Pre-Funded Amount.
If the protection provided to the investment of the Securityholders by the
Reserve Account is insufficient, the Trust will look only to the Obligors on the
Receivables and the proceeds from the repossession and sale of Financed Vehicles
which secure defaulted Receivables. In such event, certain factors, such as the
Trust's not having first priority perfected security interests in some of the
Financed Vehicles, may affect the Trust's ability to realize on the collateral
securing the Receivables, and thus may reduce the proceeds to be distributed to
Securityholders with respect to the Securities. See "Description of the Transfer
and Servicing Agreements-Distributions" and "--Reserve Account" herein and
"Certain Legal Aspects of the Receivables" in the Prospectus.
The Trust's principal offices are in Delaware, in care of , as
Owner Trustee, at the address listed below under "--The Owner Trustee".
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the Trust as of the
Closing Date, as if the issuance and sale of the Notes and the Certificates had
taken place on such date:
<TABLE>
<S> <C>
Class A-1 Notes........................................... $
Class A-2 Notes...........................................
Class A-3 Notes...........................................
Certificates..............................................
--------
Total.............................................. $
========
</TABLE>
THE OWNER TRUSTEE
is the Owner Trustee under the Trust Agreement. is a
and its principal offices are located at . The Seller and
its affiliates may maintain normal commercial banking relations with the Owner
Trustee and its affiliates.
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include the Initial
Receivables purchased as of the Initial Cutoff Date and will include any
Subsequent Receivables purchased as of the applicable Subsequent Cutoff Date
(the Initial Cutoff Date or any Subsequent Cutoff Date being individually
referred to herein as a "Cutoff Date").
The Initial Receivables were purchased, and the Subsequent Receivables were
or will be purchased, by the Servicer from Dealers in the ordinary course of
business, and were or will be selected from the Seller's portfolio for inclusion
in the Receivables Pool by several criteria, some of which are set forth in the
Prospectus under "The Receivables Pools," as well as the requirement that each
Receivable (i) has an outstanding gross balance of at least $1,000 and (ii) as
of the applicable Cutoff Date, was not or will not be more than 90 days past
due. As of the applicable Cutoff Date, no Obligor on any Receivable was or will
have been noted in the related records of the Servicer as being the subject of a
bankruptcy proceeding, and no Obligor on any Receivable will have financed a
Financed Vehicle under CCC's "New-Finance Buyer Plan" program. No selection
procedures believed by the Seller to be adverse to Securityholders were or will
be used in selecting the Receivables.
S-16
<PAGE> 19
The obligation of the Trust to purchase the Subsequent Receivables on a
Subsequent Transfer Date will be subject to the Receivables in the Trust,
including the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria: (i) not more than %
of the principal balances of the Receivables in the Trust will represent
vehicles financed at CCC's used vehicle rates; and (ii) the weighted average APR
of the Receivables in the Trust will not be less than %, unless the Seller
increases the Reserve Account Initial Deposit by certain specified amounts. In
addition, such obligation will be subject to the Receivables, including the
Subsequent Receivables to be transferred to the Trust on such Subsequent
Transfer Date, having a weighted average remaining term not greater than
months. Such criteria will be based on the characteristics of the
Initial Receivables on the applicable Initial Cutoff Dates and any Subsequent
Receivables on the related Subsequent Cutoff Dates. In addition, no Receivable
will be sold to the Trust if such Receivable has been repurchased by the Seller
through the exercise of optional redemption provisions contained in other
securitization transactions.
The Initial Receivables will represent approximately % of the aggregate
initial principal balance of the Securities. However, except for the criteria
described in the preceding paragraphs, there will be no required characteristics
of the Subsequent Receivables. Therefore, following the transfer of Subsequent
Receivables to the Trust, the aggregate characteristics of the entire
Receivables Pool, including the composition of the Receivables, the distribution
by annual percentage rate ("APR") and the geographic distribution described in
the following tables, may vary significantly from those of the Initial
Receivables.
The composition, distribution by APR and geographic distribution of the
Receivables Pool as of the Initial Cutoff Date are set forth in the following
tables.
COMPOSITION OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE APR AGGREGATE
OF PRINCIPAL NUMBER OF
RECEIVABLES BALANCE RECEIVABLES
----------- --------- -----------
<S> <C> <C>
% $
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
REMAINING ORIGINAL PRINCIPAL
TERM TERM BALANCE
--------- ---------- ---------
<S> <C> <C>
months months $
</TABLE>
S-17
<PAGE> 20
DISTRIBUTION BY APR
OF THE RECEIVABLES POOL
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
APR RANGE RECEIVABLES BALANCE BALANCE(1)
- -------------------- ----------- --------- ----------
<S> <C> <C> <C>
0.00% to 3.00%............................................. $ %
4.01% to 5.00%.............................................
5.01% to 6.00%.............................................
6.01% to 7.00%.............................................
7.01% to 8.00%.............................................
8.01% to 9.00%.............................................
9.01% to 10.00%............................................
10.01% to 11.00%...........................................
11.01% to 12.00%...........................................
12.01% to 13.00%...........................................
13.01% to 14.00%...........................................
14.01% to 15.00%...........................................
15.01% to 16.00%...........................................
16.01% to 17.00%...........................................
17.01% to 18.00%...........................................
18.01% to 19.00%...........................................
19.01% to 20.00%...........................................
Greater than 20.00%........................................
----------- --------- ----------
$ 100%
== ======== ========= ==========
</TABLE>
- ---------------
(1) Percentages may not add to 100.0% because of rounding.
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE PRINCIPAL
STATE(1) BALANCE(2)
- ---------- -------------------
<S> <C>
Alabama.....................................................................
Alaska......................................................................
Arizona.....................................................................
Arkansas....................................................................
California..................................................................
Colorado....................................................................
Connecticut.................................................................
Delaware....................................................................
District of Columbia........................................................
Florida.....................................................................
Georgia.....................................................................
Hawaii......................................................................
Idaho.......................................................................
Illinois....................................................................
</TABLE>
S-18
<PAGE> 21
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE PRINCIPAL
STATE(1) BALANCE(2)
- -------- -------------------
<S> <C>
Indiana.....................................................................
Iowa........................................................................
Kansas......................................................................
Kentucky....................................................................
Louisiana...................................................................
Maine.......................................................................
Maryland....................................................................
Massachusetts...............................................................
Michigan....................................................................
Minnesota...................................................................
Mississippi.................................................................
Missouri....................................................................
Montana.....................................................................
Nebraska....................................................................
Nevada......................................................................
New Hampshire...............................................................
New Jersey..................................................................
New Mexico..................................................................
New York....................................................................
North Carolina..............................................................
North Dakota................................................................
Ohio........................................................................
Oklahoma....................................................................
Oregon......................................................................
Pennsylvania................................................................
Rhode Island................................................................
South Carolina..............................................................
South Dakota................................................................
Tennessee...................................................................
Texas.......................................................................
Utah........................................................................
Vermont.....................................................................
Virginia....................................................................
Washington..................................................................
West Virginia...............................................................
Wisconsin...................................................................
Wyoming.....................................................................
----
100%
====
</TABLE>
- ---------------
(1) Based on physical addresses of the Dealers originating the Receivables.
(2) Percentages may not add to 100.0% because of rounding.
Approximately % of the aggregate principal balance of the Initial
Receivables, constituting % of the number of Initial Receivables, as of the
applicable Initial Cutoff Dates, represent vehicles financed at CCC's new
vehicle rates, which apply to new and certain previously owned vehicles; the
remainder represent vehicles financed at CCC's used vehicle rates. Approximately
% of the aggregate principal balance of the Initial Receivables represent
financing of vehicles manufactured or distributed by Chrysler.
S-19
<PAGE> 22
By aggregate principal balance, approximately % of the Initial
Receivables constitute Precomputed Receivables, % of the Initial Receivables
constitute Simple Interest Receivables and % constitute Fixed Value
Receivables. In addition, % of the Initial Receivables that are Precomputed
Receivables constitute Fixed Value Receivables. See "The Receivables Pools" in
the Prospectus for a further description of the characteristics of Precomputed
Receivables, Simple Interest Receivables and Fixed Value Receivables.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is certain information concerning the experience of the
Seller and its United States subsidiaries pertaining to retail new and used
automobile and light duty truck receivables, including those previously sold
which CCC continues to service. The Initial Receivables were, and it is expected
that the Subsequent Receivables will be, originated on average more recently
than were, on average, the automobile and light duty truck receivables in the
portfolio serviced by CCC. CCC began originating Fixed Value Receivables in July
1991. There can be no assurance that the delinquency, repossession and net loss
experience on the Receivables will be comparable to that set forth below.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
----------------------------------------------- -----------------------------------------------
1994 1993 1993 1992
--------------------- --------------------- --------------------- ---------------------
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------- --------- ------- --------- ------- --------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio................. 1,397,708 $15,598 1,333,839 $12,768 1,352,218 $14,116 1,344,799 $12,082
Period of Delinquency
31-60 Days.............. 16,966 $ 173 12,810 $ 109 16,350 $ 153 15,964 $ 134
61 Days or More......... 1,494 18 1,097 10 1,383 15 1,376 13
--------- ------- --------- ------- --------- ------- --------- -------
Total Delinquencies....... 18,460 $ 191 13,907 $ 119 17,733 $ 168 17,340 $ 147
Total Delinquencies as a
Percent of the
Portfolio............... 1.32% 1.22% 1.04% 0.93% 1.31% 1.19% 1.29% 1.22%
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------------------------------------------------
1991 1990 1989(1)
--------------------- --------------------- ---------------------
NUMBER OF NUMBER OF NUMBER OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------- --------- ------- --------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio........................................ 1,437,451 $11,994 1,622,834 $13,545 1,756,185 $14,134
Period of Delinquency
31-60 Days..................................... 21,025 $ 180 23,278 $ 206 19,096 $ 174
61 Days or More................................ 2,048 20 2,496 25 2,439 24
--------- ------- --------- ------- --------- -------
Total Delinquencies.............................. 23,073 $ 200 25,774 $ 231 21,535 $ 198
Total Delinquencies as a Percent of the
Portfolio...................................... 1.61% 1.67% 1.59% 1.71% 1.23% 1.40%
</TABLE>
- ---------------
(1) All amounts and percentages are based on the gross amount scheduled to be
paid on each contract, including unearned finance and other charges. The
information in the table includes an immaterial amount of retail
installment sale contracts on vehicles other than automobiles and light
duty trucks and includes previously sold contracts which CCC continues to
service.
(2) In 1990 the method by which delinquencies are calculated was changed.
Previously, an account was considered delinquent if more than $9.99 was
past due. Under the current method, an account is considered delinquent if
10% or more of the scheduled payment is past due. As a result,
delinquencies reported at December 31, 1989 are not directly comparable to
those reported in later periods.
S-20
<PAGE> 23
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- --------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Amount
Outstanding During
the Period........ $14,799 $12,268 $12,882 $11,818 $12,709 $13,410 $14,585
Average Number of
Contracts
Outstanding During
the Period........ 1,374,657 1,337,296 1,341,084 1,382,898 1,517,178 1,696,175 1,814,040
Percent of Contracts
Acquired During
the Period with
Recourse to the
Dealer............ 17.9% 16.2% 16.2% 15.8% 21.7% 22.7% 26.8%
Repossessions as a
Percent of Average
Number of
Contracts
Outstanding(2).... 2.11% 2.10% 2.15% 2.31% 2.63% 2.33% 2.21%
Net Losses as a
Percent of
Liquidations(3)(4).. 1.11% 1.20% 1.34% 1.71% 2.28% 1.81% 1.66%
Net Losses as a
Percent of Average
Amount
Outstanding(2)(3).. 0.59% 0.71% 0.75% 0.97% 1.21% 0.98% 0.83%
</TABLE>
- ---------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including unearned finance
and other charges. The information in the table includes an immaterial
amount of retail installment sales contracts on vehicles other than
automobiles and light duty trucks and includes previously sold contracts
that CCC continues to service.
(2) Percentages have been annualized for the six months ended June 30, 1994 and
1993 and are not necessarily indicative of the experience for the year.
(3) In 1994 the method by which net losses are calculated was changed. Currently
net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any recoveries
on contracts charged off in the period or any periods, including any losses
resulting from disposition expenses and any losses resulting from the
failure to recover commissions to dealers with respect to contracts that
are prepaid or charged off. Under the previous method, reported losses
excluded disposition costs. Prior period loss statistics have been restated
to conform to current period classifications.
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of monthly cash payments and charge-offs.
The net loss figures above reflect the fact that the Seller had recourse to
Dealers on a portion of its retail installment sale contracts. Approximately
% of the aggregate principal balance of the Initial Receivables as of the
applicable Initial Cutoff Dates represents contracts with recourse to Dealers.
This factor was taken into consideration in determining the principal balances
of the Securities and the Specified Reserve Account Balance. The Seller applies
underwriting standards to the purchase of contracts without regard to whether
recourse to Dealers is provided. Based on its experience, the Seller believes
that there is no material difference between the rates of delinquency and
repossession on contracts with recourse against Dealers as compared to contracts
without recourse against Dealers. However, the net loss experience of contracts
without recourse against Dealers is higher than that of contracts with recourse
against Dealers because, under its recourse
S-21
<PAGE> 24
obligation, the Dealer is responsible to the Seller for payment of the unpaid
balance of the contract, provided the Seller retakes the vehicle from the retail
buyer and returns it to the Dealer within a specified time. In the event of a
Dealer's bankruptcy, a bankruptcy trustee might attempt to characterize recourse
sales of contracts as loans to the Dealer secured by the contracts. Such an
attempt, if successful, could result in payment delays or losses on the affected
Receivables.
THE SELLER AND THE SERVICER
Information regarding the Seller and the Servicer is set forth under "The
Seller and the Servicer" in the Prospectus. In addition, as of June 30, 1994,
the Seller had nearly 3,100 employees and was servicing $30.2 billion in finance
receivables managed, and the Servicer provided financing services to automobile
dealers and their customers through 86 branches in the United States. During the
first six months of 1994, the Seller and CCC financed or leased approximately
429,000 vehicles at retail, including approximately 286,000 new Chrysler
passenger cars and light duty trucks representing 24% of Chrysler's U.S. retail
and fleet deliveries. The Seller and CCC also financed at wholesale
approximately 844,000 new Chrysler passenger cars and light duty trucks
representing 73% of Chrysler's U.S. factory unit sales for the six months ended
June 30, 1994. Wholesale vehicle financing accounted for 74% of the total U.S.
automotive financing volume of the Seller and CCC in the first six months of
1994 and represented 7% of gross automotive finance receivables outstanding in
the U.S. at June 30, 1994.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
Information regarding certain maturity and prepayment considerations with
respect to the Securities is set forth under "Weighted Average Life of the
Securities" in the Prospectus. In addition, the Class A-2 Notes, the Class A-3
Notes and the Certificates will not receive any principal payments until the
Class A-1 Notes have been paid in full, and the Class A-3 Notes will not receive
any principal payments until the Class A-2 Notes have been paid in full. In
addition, no principal payments on the Certificates will be made until the later
of (i) the 199 Distribution Date and (ii) the Distribution
Date next succeeding the Distribution Date on which the Class A-1 Notes were
paid in full. See "Description of the Notes -- Payments of Principal" and
"Description of the Certificates -- Distributions of Principal Payments" herein.
As the rate of payment of principal of each class of Notes and the Certificates
depends on the rate of payment (including prepayments) of the principal balance
of the Receivables, final payment of any class of Notes and the final
distribution in respect of the Certificates could occur significantly earlier
than the respective Final Scheduled Distribution Dates. In addition, the rate of
payment of principal of each Class of Notes will be affected by the amounts of
the Accelerated Principal Distribution Amounts. Securityholders will bear the
risk of being able to reinvest principal payments on the Securities at yields at
least equal to the yield on their respective Securities.
DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued pursuant to the terms of the Indenture, a form of
which has been filed as an exhibit to the Registration Statement. A copy of the
Indenture will be filed with the Commission following the issuance of the
Securities. The following summary describes certain terms of the Notes and the
Indenture. The summary does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Notes and
the Indenture. Where particular provisions or terms used in the Indenture are
referred to, the actual provisions (including definitions of terms) are
incorporated by reference as part of such summary. The following summary
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Notes of any given series and the
related Indenture set forth under the headings "Description of the Notes" and
"Certain Information Regarding the Securities" in the Prospectus, to which
description reference is hereby made. , a , will be the
Indenture Trustee under the Indenture.
S-22
<PAGE> 25
PAYMENTS OF INTEREST
Each class of Notes will constitute Fixed Rate Securities, as such term is
defined under "Certain Information Regarding the Securities -- Fixed Rate
Securities" in the Prospectus. Interest on the principal balances of the classes
of the Notes will accrue at the respective per annum Interest Rates and will be
payable to the Noteholders monthly on each Distribution Date commencing
, 199 . Interest will accrue from the Closing Date (in the case of the
first Distribution Date), or from the second day of the month preceding the
month of a Distribution Date to and including the first day of the month in
which such Distribution Date occurs (each an "Interest Period"). Interest on
each class of Notes will be calculated on the basis of a 360-day year of twelve
30-day months. Interest accrued as of any Distribution Date but not paid on such
Distribution Date will be due on the next Distribution Date, together with
interest on such amount at the applicable Interest Rate specified below (to the
extent lawful). Interest payments on the Notes will generally be derived from
the Total Distribution Amount remaining after the payment of the Servicing Fee
and from the Reserve Account. See "Description of the Transfer and Servicing
Agreements -- Distributions" and "-- Reserve Account" herein. Interest payments
to all classes of Noteholders will have the same priority. Under certain
circumstances, the amount available for interest payments could be less than the
amount of interest payable on the Notes on any Distribution Date, in which case
each class of Noteholders will receive their ratable share (based upon the
aggregate amount of interest due to such class of Noteholders) of the aggregate
amount available to be distributed in respect of interest on the Notes.
PAYMENTS OF PRINCIPAL
Principal payments will be made to the Noteholders on each Distribution
Date in an amount generally equal to the sum of (i) the Noteholders' Percentage
of the amount (such amount, the "Regular Principal Distribution Amount") equal
to the sum of (X) the aggregate principal payments received with respect to the
Receivables during the preceding Collection Period or, in certain cases,
scheduled to be paid during such Collection Period (exclusive of Payaheads
allocable to principal) plus (Y) the aggregate principal balances of defaulted
Receivables written off in respect of such Collection Period, subject to certain
limitations and the reconciliation methodology described below plus (ii) the
portion, if any, of the Total Distribution Amount for such Collection Period
that remains after payment of (a) the Servicing Fee, (b) the Noteholders'
Interest Distributable Amount, (c) the portion of the Regular Principal
Distribution Amount allocated to the Noteholders pursuant to clause (i), (d) the
Certificateholders' Interest Distributable Amount, (e) the portion of the
Regular Principal Distribution Amount distributed to Certificateholders as
described under "Description of the Certificates -- Distributions of Principal
Payments," and (f) the amount, if any, required to be deposited in the Reserve
Account on such Distribution Date (the "Accelerated Principal Distribution
Amount"). Principal payments on the Notes generally will be derived from the
Total Distribution Amount and the amount, if any, in the Reserve Account up to
the Available Amount remaining after the payment of the Servicing Fee and the
Noteholders' Interest Distributable Amount and, in the case of the Accelerated
Principal Distribution Amount, the Certificateholders' Distributable Amount and
the amount, if any, required to be deposited into the Reserve Account. See
"Description of the Transfer and Servicing Agreements -- Distributions" and
"-- Reserve Account" herein.
On the Business Day immediately preceding each Distribution Date (a
"Determination Date") the Indenture Trustee will determine the amount in the
Collection Account allocable to interest and the amount allocable to principal
on the basis described under "Description of the Transfer and Servicing
Agreements -- Distributions -- Allocation of Collections on Receivables;
Reconciliation" in the Prospectus, and payments to Securityholders on the
following Distribution Date will be based on such allocation, with the
appropriate adjustments in respect of the prior Collection Period as described
under such heading.
Principal payments on the Notes will be applied on each Distribution Date,
first, to the principal balance of the Class A-1 Notes until such principal
balance is reduced to zero, then second, to the principal balance of the Class
A-2 Notes until such principal balance is reduced to zero and then third, to the
principal balance of the Class A-3 Notes until such principal balance is reduced
to zero. The principal balance of the Class A-1 Notes, to the extent not
previously paid, will be due on the Class A-1 Final Scheduled Distribution Date,
the principal balance of the Class A-2 Notes, to the extent not previously paid,
will be due on the Class A-2 Final
S-23
<PAGE> 26
Scheduled Distribution Date, and the principal balance of the Class A-3 Notes,
to the extent not previously paid, will be due on the Class A-3 Final Scheduled
Distribution Date. The actual date on which the aggregate outstanding principal
amount of any class of Notes is paid may be earlier than the respective Final
Scheduled Distribution Dates set forth above based on a variety of factors,
including those described under "Weighted Average Life of the Securities" herein
and in the Prospectus.
MANDATORY REDEMPTION
A class or classes of Notes will be redeemed in part on the Distribution
Date on or immediately following the last day of the Funding Period in the event
that amounts remain on deposit in the Pre-Funding Account after giving effect to
the purchase of all Subsequent Receivables, including any such purchase on such
date (a "Mandatory Redemption"). If the amount on deposit in the Pre-Funding
Account is less than or equal to $ , then such amount will be used to
redeem the Class A-1 Notes up to an amount not to exceed their outstanding
balance and then to redeem the Class A-2 Notes. If the amount on deposit in the
Pre-Funding Account is greater than $ , then such amount will be used
to redeem each class of Notes and the Certificates, and the aggregate principal
amount of each class of Notes to be redeemed will be an amount equal to such
class' Pre-Funded Percentage of the amount then on deposit in the Pre-Funding
Account.
The Note Prepayment Premium will be payable by the Trust to the Noteholders
pursuant to a Mandatory Redemption if the amount on deposit in the Pre-Funding
Account exceeds $ . The Note Prepayment Premium for each class of Notes
will equal the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on such class' Pre-Funded Percentage of any
remaining Pre-Funded Amount (the "Note Prepayment Amount") at the Interest Rate
borne by such class of Notes during the period commencing on and including the
Distribution Date on which such Note Prepayment Amount is required to be
distributed to the Noteholders of such Class to but excluding , in the
case of the Class A-1 Notes, , in the case of the Class A-2 Notes and
, in the case of the Class A-3 Notes, over (ii) the amount of interest
that would have accrued on such Note Prepayment Amount over the same period at a
per annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the , in the
case of the Class A-1 Notes, the , in the case of the Class A-2 Notes
and the , in the case of the Class A-3 Notes. Such excess shall be
discounted to present value to such Distribution Date at the applicable yield
described in clause (ii) above. The Trust's obligation to pay the Note
Prepayment Premium shall be limited to funds which are received from the Seller
under the Sale and Servicing Agreement as liquidated damages for the failure to
deliver Subsequent Receivables having an aggregate principal amount equal to the
Pre-Funded Amount. No other assets of the Seller or the Trust will be available
for the purpose of making such payment.
OPTIONAL REDEMPTION
The Class A-3 Notes will be redeemed in whole, but not in part, on any
Distribution Date after all the other classes of Notes have been paid in full on
which the Servicer exercises its option to purchase the Receivables. The
Servicer may purchase the Receivables when the Pool Balance shall have declined
to 10% or less of the Initial Pool Balance, as described in the Prospectus under
"Description of the Transfer and Servicing Agreements -- Termination". The
redemption price will be equal to the unpaid principal amount of the Class A-3
Notes plus accrued and unpaid interest thereon (the "Redemption Price").
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Trust
Agreement, a form of which has been filed as an exhibit to the Registration
Statement. A copy of the Trust Agreement will be filed with the Commission
following the issuance of the Securities. The following summary describes
certain terms of the Certificates and the Trust Agreement. The summary does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Certificates and the Trust Agreement.
The following summary supplements, and to the extent inconsistent therewith
replaces, the description of the
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general terms and provisions of the Certificates of any given series and the
related Trust Agreement set forth in the Prospectus, to which description
reference is hereby made.
DISTRIBUTIONS OF INTEREST INCOME
On each Distribution Date, commencing , 199 , the
Certificateholders will be entitled to distributions in an amount equal to the
amount of interest that would accrue on the Certificate Balance at the Pass
Through Rate. The Certificates will constitute Fixed Rate Securities, as such
term is defined under "Certain Information Regarding the Securities -- Fixed
Rate Securities" in the Prospectus. Interest in respect of a Distribution Date
will accrue from the Closing Date (in the case of the first Distribution Date)
or from the second day of the month preceding the month of a Distribution Date
to and including the first day of the month in which such Distribution Date
occurs, and will be calculated on the basis of a 360-day year of twelve 30-day
months. Interest distributions due for any Distribution Date but not distributed
on such Distribution Date will be due on the next Distribution Date increased by
an amount equal to interest on such amount at the Pass Through Rate (to the
extent lawful). Interest distributions with respect to the Certificates will
generally be funded from the portion of the Total Distribution Amount and the
funds in the Reserve Account remaining after the distribution of the Servicing
Fee and the Noteholders' Distributable Amount. See "Description of the Transfer
and Servicing Agreements -- Distributions" and "-- Reserve Account" herein.
DISTRIBUTIONS OF PRINCIPAL PAYMENTS
Certificateholders will be entitled to distributions on each Distribution
Date, commencing with the later of (i) the Distribution Date and
(ii) the Distribution Date next succeeding the Distribution Date on which
the Class A-1 Notes were paid in full, in an amount generally equal to the
Certificateholders' Percentage of the Regular Principal Distribution Amount.
Distributions with respect to principal payments will generally be funded from
the portion of the Total Distribution Amount and funds in the Reserve Account
remaining after the distribution of the Servicing Fee, the Noteholders'
Distributable Amount and the Certificateholders' Interest Distributable Amount.
See "Description of the Transfer and Servicing Agreements -- Distributions" and
"-- Reserve Account" herein. However, upon any reduction or withdrawal by any
Rating Agency of its rating of any class of Notes, then, with respect to each
Distribution Date thereafter, the Certificateholders will not receive any
distributions of principal until all the Notes have been paid in full or such
rating has been restored. There can be no assurance that a rating will remain
for a given period of time or that a rating will not be lowered or withdrawn
entirely by a Rating Agency if in its judgment circumstances in the future so
warrant.
MANDATORY REPURCHASE
Cash distributions to Certificateholders will be made, on a pro rata basis,
on the Distribution Date on or immediately following the last day of the Funding
Period in the event that the amount on deposit in the Pre-Funding Account after
giving effect to the purchase of all Subsequent Receivables, including any such
purchase on such date exceeds $ (a "Mandatory Repurchase"). The
aggregate principal amount of the Certificates to be repurchased will be an
amount equal to the Certificates' Pre-Funded Percentage of the amount then on
deposit in the Pre-Funding Account.
The Certificate Prepayment Premium will be payable by the Trust to the
Certificateholders at the time of any prepayment of the Certificates pursuant to
a Mandatory Repurchase. The Certificate Prepayment Premium for the Certificates
will equal the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the Certificates' share of any remaining
Pre-Funded Amount (the "Certificate Prepayment Amount") at the Pass Through Rate
during the period commencing on and including the Distribution Date on which
such Certificate Prepayment Amount is required to be distributed to
Certificateholders to but excluding , over (ii) the amount of interest
that would have accrued on such Certificate Prepayment Amount over the same
period at a per annum rate of interest equal to the bond equivalent yield to
maturity on the Determination Date preceding such Distribution Date on the
. Such excess shall be discounted to present value to such
Distribution Date at the yield described in clause (ii) above. The Trust's
obligation to pay the Certificate Prepayment Premium shall be limited to funds
which are
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received from the Seller under the Sale and Servicing Agreement as liquidated
damages for the failure to deliver Subsequent Receivables having an aggregate
principal amount equal to the Pre-Funded Amount. No other assets of the Trust
will be available for the purpose of making such payment.
OPTIONAL PREPAYMENT
If the Servicer exercises its option to purchase the Receivables when the
Pool Balance declines to 10% or less of the Initial Pool Balance,
Certificateholders will receive an amount in respect of the Certificates equal
to the outstanding Certificate Balance together with accrued interest at the
Pass Through Rate, which distribution shall effect the early retirement of the
Certificates. See "Description of the Transfer and Servicing
Agreements -- Termination" in the Prospectus.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of the Sale and Servicing
Agreement, the Administration Agreement and the Trust Agreement (collectively,
the "Transfer and Servicing Agreements"). Forms of the Transfer and Servicing
Agreements have been filed as exhibits to the Registration Statement. A copy of
the Transfer and Servicing Agreements will be filed with the Commission
following the issuance of the Securities. The summary does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
the provisions of the Transfer and Servicing Agreements. The following summary
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Transfer and Servicing Agreements set
forth under the headings "Description of the Transfer and Servicing Agreements"
in the Prospectus, to which description reference is hereby made.
SALE AND ASSIGNMENT OF RECEIVABLES; SUBSEQUENT RECEIVABLES
Certain information with respect to the conveyance of the Initial
Receivables from the Seller to the Trust on the Closing Date pursuant to the
Sale and Servicing Agreement is set forth under "Description of the Transfer and
Servicing Agreements -- Sale and Assignment of Receivables" in the Prospectus.
In addition, during the Funding Period, pursuant to the Sale and Servicing
Agreement, the Seller will be obligated to sell to the Trust Subsequent
Receivables having an aggregate principal balance equal to approximately
$ (such amount being equal to the initial Pre-Funded Amount) to the
extent that such Subsequent Receivables are available.
During the Funding Period on each Subsequent Transfer Date, subject to the
conditions described below, the Seller will sell and assign to the Trust,
without recourse, the Seller's entire interest in the Subsequent Receivables
designated by the Seller as of the related Subsequent Cutoff Date and identified
in a schedule attached to a subsequent transfer assignment relating to such
Subsequent Receivables executed on such date by the Seller. It is expected that
on the Closing Date, subject to the conditions described below, certain of the
Subsequent Receivables designated by the Seller and arising between the Initial
Cutoff Dates and the Closing Date will be conveyed to the Trust. Upon the
conveyance of Subsequent Receivables to the Trust on a Subsequent Transfer Date,
(i) the Pool Balance will increase in an amount equal to the aggregate principal
balances of the Subsequent Receivables, (ii) an amount equal to [the sum of (a)]
% of the aggregate principal balances of such Subsequent Receivables [and (b)
the Holdback Amount (described under "-- Reserve Account" below] will be
withdrawn from the Pre-Funding Account and will be deposited in the Reserve
Account and (iii) an amount equal to the excess of the aggregate principal
balances of such Subsequent Receivables over the amount described in clause (ii)
will be withdrawn from the Pre-Funding Account and paid to the Seller.
Any conveyance of Subsequent Receivables is subject to the satisfaction, on
or before the related Subsequent Transfer Date, of the following conditions
precedent, among others: (i) each such Subsequent Receivable must satisfy the
eligibility criteria specified in the Sale and Servicing Agreement (including
that such Subsequent Receivable has not been repurchased by the Seller through
the exercise of optional redemption provisions contained in other
securitizations transactions); (ii) the Seller will not have selected such
Subsequent Receivables in a manner that it believes is adverse to the interests
of the Noteholders or the
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Certificateholders; (iii) as of the related Subsequent Cutoff Date, the
Receivables, including any Subsequent Receivables conveyed by the Seller as of
such Subsequent Cutoff Date, satisfy the criteria described under "The
Receivables Pool" herein and "The Receivables Pools" in the Prospectus; (iv) the
applicable Reserve Account Initial Deposit for such Subsequent Transfer Date
shall have been made [and the applicable Holdback Amount, if any, will have been
deposited in the Holdback Subaccount]; and (v) the Seller shall have executed
and delivered to the Trust (with a copy to the Indenture Trustee) a written
assignment conveying such Subsequent Receivables to the Trust (including a
schedule identifying such Subsequent Receivables). Moreover, any such conveyance
of Subsequent Receivables made during any given Collection Period will also be
subject to the satisfaction, on or before the fifteenth day of the month
following the end of such Collection Period, of the following conditions
subsequent, among others: (i) the Seller will have delivered certain opinions of
counsel to the Owner Trustee, the Indenture Trustee and the Rating Agencies with
respect to the validity of the conveyance of all such Subsequent Receivables
conveyed during such Collection Period; (ii) the Trust and the Indenture Trustee
shall have received written confirmation from a firm of certified independent
public accountants that, as of the end of the preceding Collection Period, the
Receivables in the Trust at that time, including the Subsequent Receivables
conveyed by the Seller during each Collection Period, satisfied the parameters
described under "The Receivables Pool" herein and under "The Receivables Pools"
in the Prospectus; and (iii) each of the Rating Agencies shall have notified the
Seller in writing that, following the addition of all such Subsequent
Receivables, each class of the Notes and the Certificates will be rated by the
Rating Agencies in the same rating category as they were rated by the Rating
Agencies on the Closing Date. The Seller will immediately repurchase any
Subsequent Receivable, at a price equal to the Purchase Amount thereof, upon the
failure of the Seller to satisfy any of the foregoing conditions subsequent with
respect thereto.
Subsequent Receivables may have been originated by CCC at a later date
using credit criteria different from those which were applied to the Initial
Receivables. See "Special Considerations -- The Receivables and the Pre-Funding
Account" and "The Receivables Pool" herein.
ACCOUNTS
In addition to the Accounts referred to under "Description of the Transfer
and Servicing Agreements -- Accounts" in the Prospectus, the Servicer will also
establish and will maintain with the Indenture Trustee, the Pre-Funding Account
and the Reserve Account, in the name of the Trustee on behalf of the Noteholders
and the Certificateholders. [There will be no Payahead Account.]
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the Servicer
will be 1.00% per annum of the Pool Balance as of the first day of the related
Collection Period. The Servicing Fee (together with any portion of the Servicing
Fee that remains unpaid from prior Distribution Dates) will be paid on each
Distribution Date solely to the extent of the Interest Distribution Amount, as
calculated on the related Determination Date, subject to reconciliation on the
subsequent Distribution Date. See "Description of the Transfer and Servicing
Agreements -- Servicing Compensation and Payment of Expenses" in the Prospectus.
DISTRIBUTIONS
Deposits to Collection Account. On or before each Distribution Date, the
Servicer will cause all collections and other amounts constituting the Total
Distribution Amount to be deposited into the Collection Account. The "Total
Distribution Amount" for a Distribution Date shall be the sum of the Interest
Distribution Amount and the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses). "Realized Losses" means the
excess of the principal balance of any Liquidated Receivable over Liquidation
Proceeds to the extent allocable to principal.
The "Interest Distribution Amount" for a Distribution Date will generally
be the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on the Receivables (including
Payaheads) allocable to interest plus that portion of Payaheads allocable to
principal; (ii) all
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proceeds of the liquidation of defaulted Receivables ("Liquidated Receivables"),
net of expenses incurred by the Servicer in connection with such liquidation and
any amounts required by law to be remitted to the Obligor on such Liquidated
Receivables ("Liquidation Proceeds"), to the extent attributable to interest due
thereon in accordance with the Servicer's customary servicing procedures, and
all recoveries in respect of Liquidated Receivables which were written off in
prior Collection Periods; (iii) all Advances made by the Servicer of interest
due on the Receivables; (iv) the Purchase Amount of each Receivable that was
repurchased by the Seller or purchased by the Servicer under an obligation which
arose during the related Collection Period, to the extent attributable to
accrued interest thereon; and (v) Investment Earnings for such Distribution
Date. The Interest Distribution Amount shall be determined on the related
Determination Date based on the methodology described under "Description of the
Notes -- Payments of Principal" in the Prospectus and shall be reconciled on the
subsequent Distribution Date.
The "Regular Principal Distribution Amount" for a Distribution Date will
generally be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the Receivables
allocable to principal (exclusive of Payaheads allocable to principal that have
not been applied as payments under the related Receivables in such Collection
Period and inclusive of Payaheads allocable to principal that have been applied
as payments under the related Receivables in such Collection Period); (ii) all
Liquidation Proceeds attributable to the principal amount of Receivables which
became Liquidated Receivables during such Collection Period in accordance with
the Servicer's customary servicing procedures, plus the amount of Realized
Losses with respect to such Liquidated Receivables; (iii) all Precomputed
Advances made by the Servicer of principal due on the Precomputed Receivables;
(iv) to the extent attributable to principal, the Purchase Amount received with
respect to each Receivable repurchased by the Seller or purchased by the
Servicer under an obligation which arose during the related Collection Period;
(v) partial prepayments relating to refunds of extended warranty protection plan
costs or of physical damage, credit life or disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligor as of the date of the original contract; and (vi) on the Final Scheduled
Distribution Date, any amounts advanced by the Servicer with respect to
principal on the Receivables. The Regular Principal Distribution Amount shall be
determined on the related Determination Date based on the methodology described
under "Description of the Notes -- Payments of Principal" in the Prospectus and
shall be reconciled on the subsequent Distribution Date.
The Interest Distribution Amount and the Regular Principal Distribution
Amount on any Distribution Date, as reconciled on the subsequent Distribution
Date, shall exclude the following:
(i) amounts received on Precomputed Receivables to the extent that the
Servicer has previously made an unreimbursed Precomputed Advance;
(ii) Liquidation Proceeds with respect to a particular Precomputed
Receivable to the extent of any unreimbursed Precomputed Advances thereon;
(iii) all payments and proceeds (including Liquidation Proceeds) of
any Receivables the Purchase Amount of which has been included in the Total
Distribution Amount in a prior Collection Period;
(iv) amounts received in respect of interest on Simple Interest
Receivables during the preceding Collection Period in excess of the amount
of interest that would have been due during the Collection Period on Simple
Interest Receivables at their respective APRs (assuming that a payment is
received on each Simple Interest Receivable on the due date thereof);
(v) Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of
any unreimbursed Simple Interest Advances; and
(vi) amounts released from the Pre-Funding Account.
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Deposits to the Distribution Accounts. On each Distribution Date, the
Servicer will allocate amounts on deposit in the Collection Account as described
under "Description of the Transfer and Servicing
Agreements -- Distributions -- Allocation of Collections on Receivables;
Reconciliation" in the Prospectus and will instruct the Indenture Trustee to
make the following deposits and distributions, to the extent of the amount then
on deposit in the Collection Account, in the following order of priority:
(i) to the Servicer, from the Interest Distribution Amount (as so
allocated), the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
(ii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i), the Noteholders'
Interest Distributable Amount;
(iii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clauses (i) and (ii), the
Noteholders' Principal Distributable Amount;
(iv) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i) through
(iii), the Certificateholders' Interest Distributable Amount;
(v) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i) through
(iv), the Certificateholders' Principal Distributable Amount; and
(vi) to the Reserve Account, the Total Distribution Amount remaining
after the application of clauses (i) through (v).
On each Determination Date (other than the first Determination Date), the
Servicer will provide the Indenture Trustee with certain information with
respect to the Collection Period related to the prior Distribution Date,
including the amount of aggregate collections on the Receivables, the aggregate
amount of Receivables which were written off, the aggregate Advances to be made
by the Servicer and the aggregate Purchase Amount of Receivables to be
repurchased by the Seller or to be purchased by the Servicer.
The Servicer will also provide the Indenture Trustee with a reconciliation
statement, reconciling the amounts shown in such information and the amounts
distributed to Securityholders on the immediately preceding Distribution Date.
The Servicer will instruct the Indenture Trustee to make the required deposits
to the Reserve Account, release to the Company any funds due to the Company, and
forward to the Securityholders a reconciliation report reflecting the allocation
of the payments made on such preceding Distribution Date and any adjustments
required by such reconciliation. If on such Distribution Date amounts were
distributed to Securityholders on account of principal in excess of the amount
required to be distributed, the amount of principal distributable to the
Securityholders on the next following Distribution Date shall be reduced by the
amount of such excess. If on such Distribution Date amounts distributed to the
Securityholders on account of principal were less than the amount required to be
distributed, the amount of such deficiency shall be retained in the Collection
Account and added to principal distributable to the Securityholders on the next
following Distribution Date.
For purposes hereof, the following terms shall have the following meanings,
as reconciled on each Distribution Date:
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable
Amount and the Noteholders' Interest Distributable Amount.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders'
Interest Carryover Shortfall for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, interest accrued for the related Interest
Period on each class of Notes at the respective Interest Rate for such
class on the outstanding principal balance of the Notes of such class on
the immediately preceding Distribution Date after giving effect to all
payments of principal to the Noteholders of such class on or prior to such
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date).
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"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any
outstanding Noteholders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding Distribution
Date, plus interest on the amount of interest due but not paid to
Noteholders on the preceding Distribution Date, to the extent permitted by
law, at the respective Interest Rates borne by each class of the Notes for
the related Interest Period.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided, however, that the Noteholders' Principal Distributable
Amount shall not exceed the outstanding principal balance of the Notes; and
provided, further, that (i) the Noteholders' Principal Distributable Amount
on the Class A-1 Final Scheduled Distribution Date shall not be less than
the Amount that is necessary (after giving effect to other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal balance of the
Class A-1 Notes to zero; (ii) the Noteholders' Principal Distributable
Amount on the Class A-2 Final Scheduled Distribution Date shall not be less
than the amount that is necessary (after giving effect to other amounts to
be deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal balance of the
Class A-2 Notes to zero; and (iii) on the Class A-3 Final Scheduled
Distribution Date the Noteholders' Principal Distributable Amount shall not
be less than the amount that is necessary (after giving effect to other
amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the outstanding
principal balance of the Class A-3 Notes to zero.
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (i) the Noteholders'
Percentage of the Regular Principal Distribution Amount and (ii) the
Accelerated Principal Distribution Amount. [Or, state other formula for
determining the Noteholders' Monthly Principal Distributable Amount.]
"Noteholders' Percentage" means (i) 100% for each Distribution Date to
and including the later to occur of (x) the Distribution Date next
succeeding the Distribution Date, on which the principal balance of the
Class A-1 Notes is reduced to zero and (y) the
Distribution Date, (ii) for each Distribution Date thereafter to and
including the Distribution Date on which the principal balance of each of
the Class A-3 Notes is reduced to zero, the percentage equivalent of a
fraction, the numerator of which is the outstanding principal balance of
the Notes on the Distribution Date immediately preceding the Distribution
Date for which the Noteholders' Percentage is being calculated (after
giving effect to all distributions made on such immediately preceding
Distribution Date) and the denominator of which is the Pool Balance on the
last day of the Collection Period second preceding the Distribution Date
for which the Noteholders' Percentage is being calculated; provided,
however, upon any reduction or withdrawal by any Rating Agency of its
rating of any class of Notes, then, with respect to each Distribution Date
thereafter until the principal balance of all the Notes is paid in full or
such rating is restored, the Noteholders' Percentage shall mean 100%, and
(iii) zero for each Distribution Date thereafter.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect
of principal that is actually deposited in the Note Distribution Account.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Principal
Distributable Amount and the Certificateholders' Interest Distributable
Amount.
"Certificateholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders'
Monthly Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution
Date.
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"Certificateholders' Monthly Interest Distributable Amount" means,
with respect to any Distribution Date, 30 days of interest (or, in the case
of the first Distribution Date, interest accrued from and including the
Closing Date to but excluding such Distribution Date) at the Pass Through
Rate on the Certificate Balance on the immediately preceding Distribution
Date, after giving effect to all payments allocable to the reduction of the
Certificate Balance made on or prior to such Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date).
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the Certificateholders' Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Pass Through Rate for the related Interest Period.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders'
Monthly Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Final Scheduled Distribution Date,
the principal required to be distributed to Certificateholders will include
the lesser of (a) (i) any scheduled payments of principal due and remaining
unpaid on each Precomputed Receivable and (ii) any principal due and
remaining unpaid on each Simple Interest Receivable, in each case, in the
Trust as of the Final Scheduled Maturity Date or (b) the portion of the
amount required to be advanced under clause (a) above that is necessary
(after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, and, in the case of
clauses (a) and (b), remaining after any required distribution in respect
of the Notes.
"Certificateholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, the Certificateholders' Percentage
of the Regular Principal Distribution Amount. [Or, state other method for
determining the Certificateholders' Monthly Principal Distributable
Amount.]
"Certificateholders' Percentage" means (i) for each Distribution Date
to and including the later to occur of (x) the Distribution Date next
succeeding the Distribution Date on which the principal balance of the
Class A-1 Notes is reduced to zero and (y) the Distribution
Date, zero, and (ii) for each Distribution Date thereafter to and including
the Distribution Date on which the Certificate Balance is reduced to zero,
the percentage equivalent of a fraction, the numerator of which is the
outstanding Certificate Balance on the Distribution Date immediately
preceding the Distribution Date for which the Certificateholders'
Percentage is being calculated (after giving effect to all distributions
made on such immediately preceding Distribution Date) and the denominator
of which is the Pool Balance on the last day of the Collection Period
second preceding the Distribution Date for which the Certificateholders'
Percentage is being calculated; provided, however, upon any reduction or
withdrawal by any Rating Agency of its rating of any class of Notes, then,
with respect to each Distribution Date thereafter until the principal
balance of all the Notes is paid in full or such rating is restored, the
Certificateholders' Percentage shall mean zero.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding
Certificateholders' Principal Carryover Shortfall from the preceding
Distribution Date, over the amount in respect of principal that is actually
deposited in the Certificate Distribution Account.
"Certificate Balance" equals, initially, $ and, thereafter,
equals the initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders.
On each Distribution Date, all amounts on deposit in the Note Distribution
Account (other than Investment Earnings) will be paid in the following order of
priority:
(i) to the applicable Noteholders, accrued and unpaid interest on the
outstanding principal balance of the applicable class of Notes at the
applicable Interest Rate;
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(ii) to the Class A-1 Noteholders in reduction of principal until the
principal balance of the Class A-1 Notes has been reduced to zero;
(iii) to the Class A-2 Noteholders in reduction of principal until the
principal balance of the Class A-2 Notes has been reduced to zero; and
(iv) to the Class A-3 Noteholders in reduction of principal until the
principal balance of the Class A-3 Notes has been reduced to zero.
On each Distribution Date, all amounts on deposit in the Certificate
Distribution Account will be distributed to the Certificateholders.
RESERVE ACCOUNT
The rights of the Certificateholders to receive distributions with respect
to the Receivables generally will be subordinated to the rights of the
Noteholders in the event of defaults and delinquencies on the Receivables as
provided in the Sale and Servicing Agreement. The protection afforded to the
Noteholders through subordination will be effected both by the preferential
right of the Noteholders to receive current distributions with respect to the
Receivables and by the establishment of the Reserve Account. The Reserve Account
will be created with a deposit initially by the Seller on the Closing Date and
thereafter with deposits from funds in the Pre-Funding Account that would
otherwise be payable to the Seller on each Subsequent Transfer Date (such
deposits, collectively, the "Reserve Account Initial Deposit"). The initial
deposit by the Seller on the Closing Date will also include the amount specified
in clause (b) of the following paragraph.
Subject to reduction as hereafter described, the "Specified Reserve Account
Balance" with respect to any Distribution Date means the sum of (i) the sum of
(a) % of the Initial Pool Balance, plus (b) an amount related to the
difference between anticipated investment earnings on the outstanding Pre-Funded
Amount and the weighted average interest expense on the portion of the Notes and
Certificates represented by the outstanding Pre-Funded Amount and (ii) % of
the Pool Balance on the first day of the related Collection Period. However, so
long as on any Distribution Date (except the first Distribution Date) the sum of
(x) the outstanding principal balance of the Securities (after giving effect to
distributions made on the prior Distribution Date) and (y) the aggregate amount
of Payaheads that have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection Period is less
than or equal to the sum of % of (a) the Pool Balance on the first day of the
related Collection Period and (b) the Pre-Funded Amount on such date, then the
portion of the Specified Reserve Account Balance set forth in clause (i) above
will be reduced to % of the Initial Pool Balance. In addition, so long as on
any Distribution Date (except the first Distribution Date) the sum of (x) the
outstanding principal balance of the Securities (after giving effect to
distributions made on the prior Distribution Date) and (y) the aggregate amount
of Payaheads that have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection Period is less
than or equal to the sum of % of (a) the Pool Balance on the first day of the
related Collection Period and (b) the Pre-Funded Amount on such day, then such
portion of the Specified Reserve Account Balance set forth in clause (i) above
will be reduced to % of the Initial Pool Balance. With respect to the portion
of the Specified Reserve Account Balance set forth in clause (ii) above, so long
as on any Distribution Date (except the first Distribution Date) the sum of (x)
the outstanding principal balance of the Securities (after giving effect to
distributions made on the prior Distribution Date) and (y) the aggregate amount
of Payaheads that have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection Period is less
than or equal to the sum of % of (a) the Pool Balance on the first day of the
related Collection Period and (b) the Pre-Funded Amount on such day, then such
portion will be reduced to an amount equal to the product of (I) the Pool
Balance on the first day of the related Collection Period and (II) the
percentage (which shall not be greater than % or less than zero) equal to (X)
the percentage derived from the fraction, the numerator of which is the
outstanding principal balance of the Securities (after giving effect to
distributions made on the prior Distribution Date) and the denominator of which
is such Pool Balance less (Y) %. The portion of the Specified Reserve Account
Balance specified in clause (ii) above may be invested in motor vehicle sale
contracts originated by CCC and secured by motor vehicles financed thereby that
are not included in the Pool
S-32
<PAGE> 35
Balance. [The Specified Reserve Account Balance is further subject to adjustment
in certain circumstances described herein.]
The Specified Reserve Account Balance would also be increased to the extent
that the Receivables in the Trust on a Subsequent Transfer Date, including the
Subsequent Receivables to be conveyed to the Trust on such Subsequent Transfer
Date, have a weighted average APR of less than %. See "The Receivables Pool"
herein. In addition, subject to certain limitations, the Seller has the option
to increase the Specified Reserve Account Balance in connection with the
addition of Subsequent Receivables.
If the amount on deposit in the Reserve Account on any Distribution Date
(after giving effect to all deposits or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance for
such Distribution Date, except as described below and subject to certain
limitations, the Servicer will instruct the Indenture Trustee to distribute such
excess to the Company. Upon any distribution to the Company of amounts from the
Reserve Account, neither the Noteholders nor the Certificateholders will have
any rights in, or claims to, such amounts. Subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any class of Notes, unless such
rating has been restored, any such excess released from the Reserve Account on a
Distribution Date will be deposited in the Note Distribution Account for payment
to Noteholders as an accelerated payment of principal on such Distribution Date.
[Or, state other methods for determining the Specified Reserve Account Balance
and applying such excess amounts.]
Amounts held from time to time in the Reserve Account will continue to be
held for the benefit of Noteholders and Certificateholders. On each Distribution
Date, and after giving effect to the reconciliation on such Distribution Date,
funds will be withdrawn from the Reserve Account up to the Available Amount to
the extent that the Total Distribution Amount (after the payment of the
Servicing Fee) with respect to any Collection Period is less than the
Noteholders' Distributable Amount and will be deposited in the Note Distribution
Account. In addition, after giving effect to such withdrawal, funds will be
withdrawn from the Reserve Account up to the Available Amount (as reduced by any
withdrawal pursuant to the preceding sentence) to the extent that the portion of
the Total Distribution Amount remaining after the payment of the Servicing Fee
and the deposit of the Noteholders' Distributable Amount in the Note
Distribution Account is less than the Certificateholders' Distributable Amount
and will be deposited in the Certificate Distribution Account. If funds applied
in accordance with the preceding sentence are insufficient to distribute
interest due on the Certificates, subject to certain limitations, funds will be
withdrawn from the Reserve Account and applied to distribute interest due on the
Certificates to the extent of the Certificate Interest Reserve Amount. On each
Distribution Date, the Reserve Account will be reinstated up to the Specified
Reserve Account Balance to the extent of the portion, if any, of the Total
Distribution Amount remaining after payment of the Servicing Fee, the deposit of
the Noteholders' Distributable Amount into the Note Distribution Account and the
deposit of the Certificateholders' Distributable Amount into the Certificate
Distribution Account.
"Available Amount" means, with respect to any Distribution Date, the amount
of funds on deposit in the Reserve Account on such Distribution Date (other than
Investment Earnings) less the Certificate Interest Reserve Amount with respect
to such Distribution Date, in each case, before giving effect to any reduction
thereto on such Distribution Date.
"Certificate Interest Reserve Amount" means the lesser of (i) $
less the amount of any application of the Certificate Interest Reserve Amount to
pay interest on the Certificates on any prior Distribution Date and (ii) % of
the Certificate Balance on such Distribution Date (before giving effect to any
reduction thereof on such Distribution Date); provided, however, that the
Certificate Interest Reserve Amount shall be zero subsequent to any reduction by
any Rating Agency to less than " " or its equivalent, or withdrawal by any
Rating Agency, of its rating of any class of Notes, unless such rating has been
restored.
If on any Distribution Date the entire Noteholders' Distributable Amount
for such Distribution Date (after giving effect to any amounts withdrawn from
the Reserve Account) is not deposited in the Note Distribution Account, the
Certificateholders generally will not receive any distributions.
S-33
<PAGE> 36
After the payment in full, or the provision for such payment, of (i) all
accrued and unpaid interest on the Securities and (ii) the outstanding principal
balance of the Securities, any funds remaining on deposit in the Reserve
Account, subject to certain limitations, will be paid to the Company.
The subordination of the Certificates and the Reserve Account are intended
to enhance the likelihood of receipt by Noteholders of the full amount of
principal and interest due them and to decrease the likelihood that the
Noteholders will experience losses. In addition, the Reserve Account is intended
to enhance the likelihood of receipt by Certificateholders of the full amount of
principal and interest due them and to decrease the likelihood that the
Certificateholders will experience losses. However, in certain circumstances,
the Reserve Account could be depleted. If the amount required to be withdrawn
from the Reserve Account to cover shortfalls in collections on the Receivables
exceeds the amount of available cash in the Reserve Account, Noteholders or
Certificateholders could incur losses or a temporary shortfall in the amounts
distributed to the Noteholders or the Certificateholders could result, which
could, in turn, increase the average life of the Notes or the Certificates.
ERISA CONSIDERATIONS
THE NOTES
The Notes may be purchased by an employee benefit plan or an individual
retirement account (a "Plan") subject to ERISA or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"). A fiduciary of a Plan must
determine that the purchase of a Note is consistent with its fiduciary duties
under ERISA and does not result in a nonexempt prohibited transaction as defined
in Section 406 of ERISA or Section 4975 of the Code. For additional information
regarding treatment of the Notes under ERISA, see "ERISA Considerations" in the
Prospectus.
The Notes may not be purchased with the assets of a Plan if the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or any of their affiliates
(a) has investment or administrative discretion with respect to such Plan
assets; (b) has authority or responsibility to give, or regularly gives,
investment advice with respect to such Plan assets, for a fee and pursuant to an
agreement or understanding that such advice (i) will serve as a primary basis
for investment decisions with respect to such Plan assets and (ii) will be based
on the particular investment needs for such Plan; or (c) is an employer
maintaining or contributing to such Plan.
THE CERTIFICATES
The Certificates may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity or which uses plan assets to acquire Certificates. By
its acceptance of a Certificate, each Certificateholder will be deemed to have
represented and warranted that it is not subject to the foregoing limitation. In
this regard, purchasers that are insurance companies should consult with their
counsel with respect to the United States Supreme Court case interpreting the
fiduciary responsibility rules of ERISA, John Hancock Mutual Life Insurance Co.
v. Harris Bank and Trust (decided December 12, 1993). In John Hancock, the
Supreme Court ruled that assets held in an insurance company's general account
may be deemed to be "plan assets" for ERISA purposes under certain
circumstances. Prospective purchasers should determine whether the decision
affects their ability to make purchases of the Certificates. For additional
information regarding treatment of the Certificates under ERISA, see "ERISA
Considerations" in the Prospectus. For additional information regarding
treatment of the Certificates under ERISA, see "ERISA Considerations" in the
Prospectus.
S-34
<PAGE> 37
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Note Underwriting Agreement"), the Seller has agreed to cause the Trust to
sell to each of the Note Underwriters named below (collectively, the "Note
Underwriters"), and each of the Note Underwriters has severally agreed to
purchase, the principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF
CLASS A-1 CLASS A-2 CLASS A-3
NOTE UNDERWRITERS NOTES NOTES NOTES
- ----------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
................................................. $ $ $
.................................................
.................................................
--------- --------- ---------
Total............................................... $ $ $
========= ========= =========
</TABLE>
The Seller has been advised by the Note Underwriters that they propose
initially to offer the Notes to the public at the prices set forth herein, and
to certain dealers at such prices less the initial concession not in excess of
% per Class A-1 Note, % per Class A-2 Note and % per Class A-3 Note.
The Note Underwriters may allow, and such dealers may reallow, a concession not
in excess of % per Class A-1 Note, % per Class A-2 Note and % per Class
A-3 Note to certain other dealers. After the initial public offering of the
Notes, the public offering price and such concessions may be changed.
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Certificate Underwriting Agreement"), the Seller has agreed to cause the
Trust to sell to each of the Certificate Underwriters named below (the
"Certificate Underwriters" and, together with the Note Underwriters, the
"Underwriters"), and each of the Certificate Underwriters has severally agreed
to purchase, the principal amount of Certificates set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
CERTIFICATE UNDERWRITERS CERTIFICATES
---------------------------------------------------------- ------------
<S> <C>
................................................ $
................................................
----------
Total.............................................. $
==========
</TABLE>
The Seller has been advised by the Certificate Underwriters that they
propose initially to offer the Certificates to the public at the price set forth
herein, and to certain dealers at such price less the initial concession not in
excess of % per Certificate. The Certificate Underwriters may allow, and such
dealers may reallow, a concession not in excess of % per Certificate to
certain other dealers. After the initial public offering of the Certificates,
the public offering price and such concessions may be changed.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain
legal matters relating to the Notes and the Certificates will be passed upon for
the Underwriters and certain federal income tax and other matters will be passed
upon for the Trust by [ ] [ may from time to time
render legal services to CFC and its affiliates.]
S-35
<PAGE> 38
INDEX OF TERMS
<TABLE>
<S> <C>
Accelerated Principal Distribution Amount........................................... S-5
APR................................................................................. S-17
Available Amount.................................................................... S-33
Business Day........................................................................ S-4
CCC................................................................................. S-3
Cede................................................................................ S-2
Certificate Balance................................................................. S-31
Certificate Interest Reserve Amount................................................. S-33
Certificate Prepayment Amount....................................................... S-8
Certificate Prepayment Premium...................................................... S-8
Certificate Underwriters............................................................ S-35
Certificate Underwriting Agreement.................................................. S-35
Certificateholders.................................................................. S-7
Certificateholders' Distributable Amount............................................ S-30
Certificateholders' Interest Carryover Shortfall.................................... S-31
Certificateholders' Interest Distributable Amount................................... S-30
Certificateholders' Monthly Interest Distributable Amount........................... S-31
Certificateholders' Monthly Principal Distributable Amount.......................... S-31
Certificateholders' Percentage...................................................... S-31
Certificateholders' Principal Carryover Shortfall................................... S-31
Certificateholders' Principal Distributable Amount.................................. S-31
Certificates........................................................................ S-3
CFC................................................................................. S-3
Chrysler............................................................................ S-13
Class A-1 Final Scheduled Distribution Date......................................... S-5
Class A-1 Notes..................................................................... S-3
Class A-1 Rate...................................................................... S-4
Class A-2 Final Scheduled Distribution Date......................................... S-5
Class A-2 Notes..................................................................... S-3
Class A-2 Rate...................................................................... S-4
Class A-3 Final Scheduled Distribution Date......................................... S-5
Class A-3 Notes..................................................................... S-3
Class A-3 Rate...................................................................... S-4
Closing Date........................................................................ S-3
Code................................................................................ S-11
Collection Account.................................................................. S-10
Collection Period................................................................... S-10
Commission.......................................................................... S-2
Company............................................................................. S-3
Cutoff Date......................................................................... S-16
Determination Date.................................................................. S-5
Distribution Date................................................................... S-4
DTC................................................................................. S-2
ERISA............................................................................... S-11
Exchange Act........................................................................ S-2
Federal Tax Counsel................................................................. S-10
Final Scheduled Distribution Date................................................... S-7
Final Scheduled Maturity Date....................................................... S-4
Funding Period...................................................................... S-8
Indenture........................................................................... S-3
Indenture Trustee................................................................... S-3
Initial Cutoff Date................................................................. S-3
</TABLE>
S-36
<PAGE> 39
<TABLE>
<S> <C>
Initial Pool Balance................................................................ S-6
Initial Receivables................................................................. S-3
Interest Distribution Amount........................................................ S-27
Interest Period..................................................................... S-5
Interest Rates...................................................................... S-4
Issuer.............................................................................. S-3
Liquidated Receivables.............................................................. S-28
Liquidation Proceeds................................................................ S-28
Mandatory Redemption................................................................ S-6
Mandatory Repurchase................................................................ S-8
Michigan Tax Counsel................................................................ S-10
MMC................................................................................. S-14
Note Prepayment Amount.............................................................. S-6
Note Prepayment Premium............................................................. S-6
Note Underwriters................................................................... S-35
Note Underwriting Agreement......................................................... S-35
Noteholders......................................................................... S-4
Noteholders' Distributable Amount................................................... S-29
Noteholders' Interest Carryover Shortfall........................................... S-30
Noteholders' Interest Distributable Amount.......................................... S-29
Noteholders' Monthly Interest Distributable Amount.................................. S-29
Noteholders' Monthly Principal Distributable Amount................................. S-30
Noteholders' Percentage............................................................. S-30
Noteholders' Principal Carryover Shortfall.......................................... S-30
Noteholders' Principal Distributable Amount......................................... S-5
Notes............................................................................... S-3
Owner Trustee....................................................................... S-3
Pass Through Rate................................................................... S-7
Plan................................................................................ S-34
Pool Balance........................................................................ S-4
Pre-Funded Amount................................................................... S-3
Pre-Funded Percentage............................................................... S-6
Pre-Funding Account................................................................. S-8
Prospectus.......................................................................... S-2
Rating Agencies..................................................................... S-15
Realized Losses..................................................................... S-27
Receivables Pool.................................................................... S-16
Record Date......................................................................... S-4
Redemption Price.................................................................... S-24
Regular Principal Distribution Amount............................................... S-5
Reserve Account..................................................................... S-8
Reserve Account Initial Deposit..................................................... S-9
Sale and Servicing Agreement........................................................ S-3
Securities.......................................................................... S-3
Securityholders..................................................................... S-7
Seller.............................................................................. S-3
Servicer............................................................................ S-3
SFAS................................................................................ S-13
Specified Reserve Account Balance................................................... S-9
Subsequent Cutoff Date.............................................................. S-3
Subsequent Receivables.............................................................. S-3
</TABLE>
S-37
<PAGE> 40
<TABLE>
<S> <C>
Subsequent Transfer Date............................................................ S-4
Total Distribution Amount........................................................... S-27
Transfer and Servicing Agreements................................................... S-26
Trust............................................................................... S-3
Trust Agreement..................................................................... S-3
Underwriters........................................................................ S-35
</TABLE>
S-38
<PAGE> 41
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 5, 1994
PROSPECTUS SUPPLEMENT
(To Prospectus dated , 1994)
$
PREMIER AUTO TRUST 199 -
$ % ASSET BACKED CERTIFICATES, CLASS A
[$ % ASSET BACKED CERTIFICATES, CLASS B]
CHRYSLER FINANCIAL CORPORATION
SELLER
CHRYSLER CREDIT CORPORATION
SERVICER
---------------------
THE PREMIER AUTO TRUST 199 - (THE "TRUST") WILL BE FORMED PURSUANT TO A
POOLING AND SERVICING AGREEMENT, TO BE DATED AS OF , 199 (THE "CLOSING
DATE"), AMONG CHRYSLER FINANCIAL CORPORATION (THE "SELLER"), CHRYSLER CREDIT
CORPORATION (THE "SERVICER") AND , AS TRUSTEE, AND WILL ISSUE
$ AGGREGATE PRINCIPAL AMOUNT OF % ASSET BACKED CERTIFICATES, CLASS A
(THE "CLASS A CERTIFICATES") AND $ AGGREGATE PRINCIPAL AMOUNT OF %
ASSET BACKED CERTIFICATES, CLASS B (THE "CLASS B CERTIFICATES" AND, TOGETHER
WITH THE CLASS A CERTIFICATES, THE "CERTIFICATES"). [ONLY THE CLASS A
CERTIFICATES ARE BEING OFFERED HEREBY.] THE CLASS A CERTIFICATES WILL EVIDENCE
IN THE AGGREGATE AN UNDIVIDED OWNERSHIP INTEREST IN APPROXIMATELY % OF THE
TRUST. THE CLASS B CERTIFICATES [, WHICH INITIALLY WILL BE SOLD TO AND RETAINED
BY [ , A WHOLLY-OWNED SUBSIDIARY OF THE SELLER (THE "COMPANY")] [A
LIMITED PARTNERSHIP (THE "COMPANY"), THE GENERAL PARTNER OF WHICH IS ,
A WHOLLY-OWNED SUBSIDIARY OF THE SELLER], WILL EVIDENCE IN THE AGGREGATE AN
UNDIVIDED OWNERSHIP INTEREST IN APPROXIMATELY % OF THE TRUST [AND WILL NOT BE
OFFERED HEREBY]. THE RIGHTS OF THE CLASS B CERTIFICATEHOLDERS TO RECEIVE
DISTRIBUTIONS WITH RESPECT TO THE RECEIVABLES ARE SUBORDINATED TO THE RIGHTS OF
THE CLASS A CERTIFICATEHOLDERS TO THE EXTENT DESCRIBED HEREIN. THE TRUST
PROPERTY WILL INCLUDE A POOL OF MOTOR VEHICLE RETAIL INSTALLMENT SALE CONTRACTS
(THE "RECEIVABLES"), SECURED BY SECURITY INTERESTS IN THE MOTOR VEHICLES
FINANCED THEREBY AND INCLUDING CERTAIN MONIES DUE OR RECEIVED THEREUNDER ON OR
AFTER , 199 , AND CERTAIN OTHER PROPERTY. THE TRUSTEE ALSO WILL HOLD
MONIES ON DEPOSIT IN A TRUST ACCOUNT (THE "PRE-FUNDING ACCOUNT"). ADDITIONAL
MOTOR VEHICLE RETAIL INSTALLMENT SALE CONTRACTS (THE "SUBSEQUENT RECEIVABLES")
WILL BE PURCHASED BY THE TRUST FROM THE SELLER FROM TIME TO TIME ON OR BEFORE
, 199 OUT OF FUNDS ON DEPOSIT IN THE PRE-FUNDING ACCOUNT.
PRINCIPAL AND INTEREST TO THE EXTENT OF THE APPLICABLE PASS THROUGH RATE
GENERALLY WILL BE DISTRIBUTED ON THE DAY OF EACH MONTH (THE "DISTRIBUTION
DATE"), COMMENCING , 199 . THE FINAL SCHEDULED DISTRIBUTION DATE ON
THE CERTIFICATES WILL BE , 199 .
(Continued on following page)
---------------------
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT OBLIGATIONS OF OR INTERESTS IN CHRYSLER FINANCIAL
CORPORATION, CHRYSLER CREDIT CORPORATION, THE COMPANY OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE
RECEIVABLES ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC(1) DISCOUNT THE SELLER(1)(2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Class A Certificate........................ % % %
- -------------------------------------------------------------------------------------------------------
Per Class B Certificate........................ % % %
- -------------------------------------------------------------------------------------------------------
Total.......................................... $ $ $
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from , 199 .
(2) Before deducting expenses, estimated to be $ .
---------------------
The [Class A] Certificates are offered by the Underwriters when, as and if
issued and accepted by the Underwriters and subject to their right to reject
orders in whole or in part. It is expected that delivery of the Certificates
will be made in book-entry form only through the Same Day Funds Settlement
System of The Depository Trust Company on or about the Closing Date.
---------------------
The date of this Prospectus Supplement is , 199 .
<PAGE> 42
(Continued from preceding page)
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH UNDER "SPECIAL
CONSIDERATIONS" HEREIN AND IN THE ACCOMPANYING PROSPECTUS.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED IN THE
PROSPECTUS AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE CERTIFICATES MAY NOT BE
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS. TO THE EXTENT ANY STATEMENTS IN THIS PROSPECTUS SUPPLEMENT
CONFLICT WITH STATEMENTS IN THE PROSPECTUS, THE STATEMENTS IN THIS PROSPECTUS
SUPPLEMENT SHALL CONTROL.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE CERTIFICATES
AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
unaudited reports containing information concerning the Receivables will be
prepared by the Servicer and sent on behalf of the Trust only to Cede & Co.
("Cede"), as nominee of the Depository Trust Company ("DTC") and registered
holder of the Certificates. See "Certain Information Regarding the
Securities--Book-Entry Registration" and "--Reports to Certificateholders" in
the accompanying Prospectus (the "Prospectus"). Such reports will not constitute
financial statements prepared in accordance with generally accepted accounting
principles. The Seller, as originator of the Trust, will file with the
Securities and Exchange Commission (the "Commission") such periodic reports as
are required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
S-2
<PAGE> 43
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used herein are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
<TABLE>
<S> <C>
Issuer................. Premier Auto Trust 199 - (the "Trust" or the "Issuer"), a trust
to be formed by the Seller and the Trustee pursuant to the
Agreement.
Seller................. Chrysler Financial Corporation (the "Seller" or "CFC").
Servicer............... Chrysler Credit Corporation (the "Servicer" or "CCC").
Trustee................ , as trustee under the Agreement (the "Trustee").
The Certificates....... The Trust will issue Asset-Backed Certificates (the "Certificates")
in an aggregate initial principal amount of $ . The
Certificates represent fractional undivided interests in the Trust
and will be issued pursuant to a Pooling and Servicing Agreement to
be dated as of , 199 (as amended and supplemented from
time to time, the "Agreement"), among the Seller, the Servicer and
the Trustee.
The Certificates will consist of $ aggregate
principal amount of % Asset Backed Certificates,
Class A (the "Class A Certificates") and $
aggregate principal amount of % Asset Backed
Certificates, Class B (the "Class B Certificates"). [Only the Class
A Certificates are being offered hereby.] Each Certificate will
represent a fractional undivided ownership interest in the Trust.
The Trust assets will include the Receivables, all monies due
thereunder on or after , 199 with respect to the
Precomputed Receivables and all monies received thereunder on or
after , 199 with respect to the Simple Interest
Receivables (each such date, a "Cutoff Date"), security interests in
the vehicles financed thereby ("Financed Vehicles"), certain bank
accounts and the proceeds thereof, any proceeds from claims on
certain insurance policies, and certain rights under the Agreement.
The Certificates will be issued in fully registered form in
denominations of $1,000 and integral multiples thereof.
The Class A Certificates will evidence in the aggregate an undivided
ownership interest (the "Class A Percentage") of approximately
% of the Trust (initially representing
$ ) and the Class B Certificates will evidence in
the aggregate an undivided ownership interest (the "Class B
Percentage") of approximately % of the Trust
(initially representing $ ). The Class B
Certificates are subordinated to the Class A Certificates to the
extent described herein. [The Class B Certificates are not being
offered hereby and initially will be sold to and retained by
, a wholly-owned subsidiary of the Seller (the
"Company")].
The Receivables........ On , 199 (the "Closing Date"), the Trust will purchase
Receivables (the "Initial Receivables") having an aggregate
principal balance of approximately $ as of , 199
(the "Initial Cutoff Date"), from the Seller pursuant to the
Agreement. On and following the Closing Date, pursuant to the
Agreement, the Seller will be obligated, subject only to the
availability thereof, to sell, and the Trust will be obligated to
purchase, subject to the satisfaction of certain conditions set
forth therein, additional Receivables (the "Subsequent Receivables")
from time to time during the Funding Period
</TABLE>
S-3
<PAGE> 44
<TABLE>
<S> <C>
having an aggregate principal balance equal to approximately
$ (such amount being equal to an amount on deposit in the
Pre-Funding Account (the "Pre-Funded Amount") on the Closing Date).
The Seller will designate as a Cutoff Date (each a "Subsequent
Cutoff Date") the date as of which particular Subsequent Receivables
are conveyed to the Trust. It is expected that certain of the
Subsequent Receivables arising between the Initial Cutoff Date and
the Closing Date will be conveyed to the Trust on the Closing Date
and that other Subsequent Receivables will be conveyed to the Trust
as frequently as daily thereafter on dates specified by the Seller
(each date on which Subsequent Receivables are conveyed to the Trust
being referred to as a "Subsequent Transfer Date") occurring during
the Funding Period. See "Description of the Certificates--Sale and
Assignment of Receivables; Subsequent Receivables" herein.
The Initial Receivables have been selected, and the Subsequent
Receivables will be selected, from the contracts owned by the Seller
based on the criteria specified in the Agreement and described
herein and in the Prospectus. As of the Initial Cutoff Date, the
weighted average annual percentage rate of the Initial Receivables
was approximately %, the weighted average remaining maturity of
the Initial Receivables was approximately months and the weighted
average original maturity of the Initial Receivables was
approximately months. No Initial Receivable has, and no
Subsequent Receivable will have, a scheduled maturity later than
(the "Final Scheduled Maturity Date").
Subsequent Receivables may be originated by CCC at a later date
using credit criteria different from those which were applied to the
Initial Receivables and may be of a different credit quality and
seasoning. In addition, following the transfer of Subsequent
Receivables to the Trust, the characteristics of the entire pool of
Receivables included in the Trust may vary significantly from those
of the Initial Receivables. See "Special Considerations -- The
Receivables and the Pre-Funding Account" and "The Receivables Pool"
herein.
The "Pool Balance" at any time will represent the aggregate
principal balance of the Receivables at the end of the preceding
Collection Period, after giving effect to all payments (other than
Payaheads) received from Obligors, Advances and Purchase Amounts to
be remitted by the Servicer or the Seller, as the case may be, all
for such Collection Period and all losses realized on Receivables
liquidated during such Collection Period.
Terms of the
Certificates......... The principal terms of the Certificates will be as described below:
A. Distribution
Dates................ Distributions with respect to the Certificates will be made on the
day of each month or, if any such day is not a Business Day, on
the next succeeding Business Day (each, a "Distribution Date")
commencing , 199 . Distributions will be made to holders
of the Certificates (the "Certificateholders") of record as of the
day immediately preceding such Distribution Date or, if Definitive
Certificates are issued, as of the day of the preceding month
(a "Record Date"). A "Business Day" is a day that in New York City
or in the city in which the corporate trust office of the Trustee is
located is neither a legal holiday nor a day on which banking
institutions are authorized by law, regulation or executive order to
be closed.
B. Class A Pass
Through Rate...... % per annum (the "Class A Pass Through Rate").
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C. Class B Pass
Through Rate...... % per annum (the "Class B Pass Through Rate").
D. Class A
Interest......... On each Distribution Date, the Trustee shall distribute pro rata to
the Class A Certificateholders interest at the Class A Pass Through
Rate on the Class A Certificate Balance as of the last day of the
preceding calendar month (before giving effect to distributions of
principal on such Distribution Date) generally to the extent of
funds available from (i) the Class A Percentage of the Interest
Distribution Amount, (ii) the Reserve Account and (iii) the Class B
Percentage of the Total Distribution Amount. The "Class A
Certificate Balance" will equal, initially, $ and
thereafter will equal the initial Class A Certificate Balance,
reduced by all principal distributions on the Class A Certificates.
E. Class A
Principal........ On each Distribution Date, the Trustee shall distribute pro rata to
Class A Certificateholders an amount equal to the Class A Percentage
of the Principal Distribution Amount for the Collection Period
preceding such Distribution Date to the extent of funds available
therefor. The "Principal Distribution Amount" is the amount of
principal paid or, in certain circumstances, scheduled to be paid
with respect to the Receivables plus, in certain circumstances, the
principal balance of defaulted Receivables, as calculated by the
Servicer as described under "Description of the
Certificates -- Distributions." The Class A Percentage of the
Principal Distribution Amount will be passed through on each
Distribution Date to the Class A Certificateholders to the extent of
funds available from (i) the Class A Percentage of the Principal
Distribution Amount (exclusive of the portion thereof attributable
to Realized Losses), (ii) the Reserve Account and (iii) the Class B
Percentage of the Total Distribution Amount. In addition, on the
Distribution Date occurring on , 199 (the "Final Scheduled
Distribution Date"), the principal due to be distributed to the
Class A Certificateholders will include the lesser of (i) the Class
A Percentage of any payments of principal due and remaining unpaid
with respect to the Receivables in the Trust as of the last day of
the preceding Collection Period and (ii) the portion of the amount
in clause (i) above that is necessary (after giving effect to all
other amounts distributed to Class A Certificateholders on such
Distribution Date and allocable to principal) to reduce the Class A
Certificate Balance to zero. The "Class A Certificate Balance" will
equal, initially, $ and, thereafter, will equal the initial
Class A Certificate Balance reduced by all amounts previously
distributed to Class A Certificateholders as principal. "Realized
Losses" means the excess of the principal balance of any Liquidated
Receivable over Liquidation Proceeds to the extent allocable to
principal received in the Collection Period in which the Receivable
became a Liquidated Receivable. A "Collection Period" with respect
to a Distribution Date will be the calendar month preceding the
month in which such Distribution Date occurs, or, in the case of the
initial Distribution Date, the period from the Initial Cutoff Date
through the last day of the calendar month preceding the month in
which the initial Distribution Date occurs. The reconciliation
methodology for determining the Principal Distribution Amount, as
described under "Description of the Transfer and Servicing
Agreements -- Distributions -- Allocation of Collections on
Receivables; Reconciliation" in the Prospectus will not be used.
F. Class B
Interest......... On each Distribution Date, the Trustee shall distribute pro rata to
the Class B Certificateholders interest at the Class B Pass Through
Rate on the Class B Certificate Balance as of the last day of the
preceding calendar month (before giving effect to distributions of
principal on such Distribution Date) generally to
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the extent of funds available, after giving effect to the prior
rights of the Class A Certificateholders to receive the distribution
of principal and interest due them as described above, from (i) the
Class B Percentage of the Interest Distribution Amount and (ii) the
Reserve Account. The "Class B Certificate Balance" will equal,
initially, $ and, thereafter, will equal the initial Class
B Certificate Balance reduced by all amounts previously distributed
to Class B Certificateholders (or deposited in the Reserve Account,
but not including the Reserve Account Initial Deposit) and allocable
to principal and by Realized Losses.
G. Class B
Principal........ On each Distribution Date, the Trustee will distribute the Class B
Percentage of the Principal Distribution Amount to the Class B
Certificateholders to the extent of funds available (after giving
effect to the distribution of the interest and principal due to the
Class A Certificateholders and the interest due to the Class B
Certificateholders) from (i) the Class B Percentage of the Principal
Distribution Amount (exclusive of the portion thereof attributable
to Realized Losses) and (ii) the Reserve Account. In addition, on
the Final Scheduled Distribution Date, the principal required to be
distributed to the Class B Certificateholders will include the
lesser of (i) the Class B Percentage of any payments of principal
due and remaining unpaid with respect to the Receivables in the
Trust as of the last day of the preceding Collection Period and (ii)
the portion of the amount in clause (i) above that is necessary
(after giving effect to all other amounts distributed to Class A and
Class B Certificateholders on such Distribution Date and allocable
to principal) to reduce the Class B Certificate Balance to zero.
H. Optional Prepay-
ment.............. If the Servicer exercises its option to purchase the Receivables,
which can occur after the Pool Balance declines to 10% or less of
the Initial Pool Balance, the Class A Certificateholders will
receive an amount equal to the Class A Certificate Balance together
with accrued interest at the Class A Pass Through Rate, the Class B
Certificateholders will receive an amount equal to the Class B
Certificate Balance together with accrued interest at the Class B
Pass Through Rate, and the Certificates will be retired. The
"Initial Pool Balance" will equal the sum of (i) the Pool Balance as
of the Initial Cutoff Date plus (ii) the aggregate principal
balances of all Subsequent Receivables added to the Trust as of
their respective Subsequent Cutoff Dates. See "Description of the
Certificates -- Optional Prepayment" herein.
I. Mandatory Repur-
chase............. The Certificates will be prepaid, in part, pro rata on the basis of
their initial principal amounts, on the Distribution Date on or
immediately following the last day of the Funding Period in the
event that any amount remains on deposit in the Pre-Funding Account
after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such date (a "Mandatory Repur-
chase"). The aggregate principal amount of Certificates to be
prepaid will be an amount equal to the amount then on deposit in the
Pre-Funding Account.
A limited recourse mandatory prepayment premium (the "Certificate
Prepayment Premium") will be payable by the Trust to the
Certificateholders if the aggregate principal amount of Certificates
to be prepaid pursuant to a Mandatory Repurchase exceeds
$ . The Certificate Prepayment Premium will equal the
excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the remaining Pre-Funded Amount (the
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"Certificate Prepayment Amount") at the related Pass Through Rate
during the period commencing on and including the Distribution Date on
which such Certificate Prepayment Amount is required to be distributed to
Certificateholders to but excluding , over (ii) the amount
of interest that would have accrued on such Certificate Prepayment
Amount over the same period at a per annum rate of interest equal to
the bond equivalent yield to maturity on the Determination Date
preceding such Distribution Date on the , in the case of a
Class A Certificate, and on the , in the case of a Class B
Certificate. Such excess shall be discounted to present value to
such Distribution Date at the applicable yield described in clause
(ii) above. The Trust's obligation to pay the Certificate Prepayment
Premium shall be limited to funds which are received from the Seller
under the Agreement as liquidated damages for the failure to deliver
Subsequent Receivables having an aggregate principal amount equal to
the Pre-Funded Amount. No other assets of the Seller or the Trust
will be available for the purpose of making such payment.
Pre-Funding Account.... During the period (the "Funding Period") from and including the
Closing Date until the earliest of (i) the date on which (a) the
amount on deposit in the Pre-Funding Account is less than
$ , (b) an Event of Default occurs under the Agreement or
(c) certain events of insolvency occur with respect to the Seller or
the Servicer or (ii) the close of business on the
Distribution Date, the Pre-Funded Amount will be maintained as an
account in the name of the Trustee (the "Pre-Funding Account"). The
Pre-Funded Amount will initially equal approximately $ ,
and, during the Funding Period, will be reduced by the amount
thereof used to purchase Subsequent Receivables in accordance with
the Agreement and the amount thereof deposited in the Reserve
Account in connection with the purchase of such Subsequent
Receivables. The Seller expects that the Pre-Funded Amount will be
reduced to less than $ by the Distribution Date.
Any Pre-Funded Amount remaining at the end of the Funding Period
will be payable to the Certificateholders pro rata in proportion to
their initial principal amounts.
Subordination.......... The rights of the Class B Certificateholders to receive
distributions to which they would otherwise be entitled with respect
to the Receivables are subordinated to the rights of the Class A
Certificateholders, as described more fully herein.
Reserve Account........ The Reserve Account will be created with an initial deposit by the
Seller on the Closing Date of cash or Eligible Investments having a
value of at least $ plus an amount attributable to the
difference between the anticipated investment earnings on the
Pre-Funded Amount and the weighted average interest expense on the
portion of the Certificates represented by the Pre-Funded Amount. On
each Subsequent Transfer Date, cash or Eligible Investments having a
value approximately equal to % of the aggregate principal balance
of the Subsequent Receivables conveyed to the Trust on such
Subsequent Transfer Date will be withdrawn from the Pre-Funding
Account from amounts otherwise distributable to the Seller in
connection with the sale of Subsequent Receivables and deposited in
the Reserve Account. The amount initially deposited in the Reserve
Account by the Seller together with the aggregate amount transferred
from the Pre-Funding Account to the Reserve Account on each
Subsequent Transfer Date is referred to as the "Reserve Account
Initial Deposit".
Certain amounts in the Reserve Account on any Distribution Date
(after giving effect to all distributions to be made on such
Distribution Date) in excess of the Specified Reserve Account
Balance for such Distribution Date will be released to
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the Company. The "Specified Reserve Account Balance" with respect to any
Distribution Date generally will be equal to [state formula]. The
amount in the Reserve Account will be increased by the deposit
thereto on each Distribution Date of the amount, if any, of the
Total Distribution Amount remaining after the payment of the
Servicing Fee and any prior unpaid Servicing Fees, the Class A
Distributable Amount and the Class B Distributable Amount until the
amount in the Reserve Account equals the Specified Reserve Account
Balance. Amounts in the Reserve Account on any Distribution Date
(after giving effect to all distributions made on such Distribution
Date) in excess of the Specified Reserve Account Balance for such
Distribution Date generally will be released to the Company and will
no longer be available to the Certificateholders. The Reserve
Account will be maintained with the Trustee as a segregated trust
account, but will not be part of the Trust.
Collection Account..... Except under certain conditions described herein, the Servicer will
be required to remit collections received with respect to the
Receivables within two Business Days of receipt thereof to one or
more accounts in the name of the Trustee (the "Collection Account").
Pursuant to the Agreement, the Servicer will have the revocable
power to instruct the Trustee to withdraw funds on deposit in the
Collection Account and to apply such funds on each Distribution Date
to the following (in the priority indicated): (i) the Servicing Fee
for the prior Collection Period and any overdue Servicing Fees to
the Servicer, (ii) the Class A Distributable Amount to the Class A
Certificateholders (iii) the Class B Distributable Amount to the
Class B Certificateholders, and (iv) the remaining balance, if any,
to the Reserve Account.
Tax Status............. In the opinion of Brown & Wood ("Federal Tax Counsel") the Trust
will be treated as a grantor trust for federal income tax purposes
and will not be subject to federal income tax. Certificate Owners
will report their pro rata share of all income earned on the
Receivables (other than amounts, if any, treated as "stripped
coupons") and, subject to certain limitations in the case of
Certificate Owners who are individuals, trusts, or estates, may
deduct their pro rata share of reasonable servicing and other fees.
See "Certain Federal Income Tax Consequences" in the Prospectus for
additional information concerning the application of federal income
tax laws to the Trust and the Certificates.
ERISA Considerations... Subject to the considerations discussed under "ERISA Considerations"
herein and in the Prospectus, the Class A Certificates are eligible
for purchase by employee benefit plans.
The Class B Certificates may not be acquired by any employee benefit
plan subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or by an individual retirement account. See
"ERISA Considerations" herein and in the Prospectus.
Ratings of the
Certificates......... It is a condition to the issuance of the Class A Certificates that
they be rated in the highest investment rating category by at least
two nationally recognized rating agencies[, and it is a condition to
the issuance of the Class B Certificates that they be rated by at
least two nationally recognized rating agencies at least " " or
its equivalent]. There can be no assurance that a rating will not be
lowered or withdrawn by a rating agency if circumstances so warrant.
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SPECIAL CONSIDERATIONS
Limited Liquidity. There is currently no secondary market for the Class A
Certificates or the Class B Certificates. The Underwriters currently intend to
make a market in the Class A Certificates and the Class B Certificates, but they
are under no obligation to do so. There can be no assurance that a secondary
market will develop or, if a secondary market does develop, that it will provide
the Certificateholders with liquidity of investment or that it will continue for
the life of the Class A Certificates or the Class B Certificates.
The Receivables and the Pre-Funding Account. On the Closing Date, the
Seller will transfer to the Trust the approximately $ of Initial
Receivables and the approximately $ Pre-Funded Amount on deposit in the
Pre-Funding Account. If the principal amount of eligible Receivables originated
by CCC during the Funding Period is less than the Pre-Funded Amount, the Seller
will have insufficient Receivables to sell to the Trust on the Subsequent
Transfer Dates, thereby resulting in a prepayment of principal to the
Certificateholders as described in the following paragraph. See "Social,
Economic and Other Factors" and "Trust's Relationship to the Seller and Chrysler
Credit Corporation; Financial Condition of Seller and Chrysler Corporation"
below. In addition, any conveyance of Subsequent Receivables is subject to the
satisfaction, on or before the related Subsequent Transfer Date, of the
following conditions precedent, among others: (i) each such Subsequent
Receivable must satisfy the eligibility criteria specified in the Agreement
(including the requirement that such Subsequent Receivables have not been
repurchased by the Seller through the exercise of an optional repurchase
provision contained in another securitization transaction); (ii) the Seller will
not select such Subsequent Receivables in a manner that it believes is adverse
to the interests of the Certificateholders; (iii) as of the related Subsequent
Cutoff Date, the Receivables in the Trust at that time, including the Subsequent
Receivables to be conveyed by the Seller as of such Subsequent Cutoff Date, will
satisfy the parameters described under "The Receivables Pool" herein and under
"The Receivables Pools" in the Prospectus; (iv) the applicable Reserve Account
Initial Deposit for such Subsequent Transfer Date shall have been made; and (v)
the Seller shall have executed and delivered to the Trustee a written assignment
conveying such Subsequent Receivables to the Trustee (including a schedule
identifying such Subsequent Receivables). Moreover, any such conveyance of
Subsequent Receivables made during any given Collection Period will also be
subject to the satisfaction, on or about the fifteenth day of the month
following the end of such Collection Period, of the following conditions
subsequent, among others: (a) the Seller will deliver certain opinions of
counsel to the Trustee and the Rating Agencies with respect to the validity of
the conveyance of all such Subsequent Receivables conveyed during such
Collection Period; (b) the Trustee shall have received written confirmation from
a firm of certified independent public accountants that, as of the end of the
preceding Collection Period, the Receivables in the Trust at that time,
including the Subsequent Receivables conveyed by the Seller during such
Collection Period, satisfied the parameters described under "The Receivables
Pool" herein and under "The Receivables Pools" in the Prospectus; and (c) the
Rating Agencies shall have each notified the Seller in writing that, following
the addition of all such Subsequent Receivables, the Certificates will be rated
by the Rating Agencies in the same respective rating categories in which they
were rated on the Closing Date. The Seller will immediately repurchase any
Subsequent Receivable, at a price equal to the Purchase Amount thereof, upon the
failure of the Seller to satisfy any of the foregoing conditions subsequent with
respect thereto. Such confirmation of the ratings of the Certificates may depend
on factors other than the characteristics of the Subsequent Receivables,
including the delinquency, repossession and net loss experience on the
automobile and light duty truck receivables in the portfolio serviced by CCC.
To the extent that amounts on deposit in the Pre-Funding Account have not
been fully applied to the conveyance of Subsequent Receivables to the Trust by
the end of the Funding Period, the Certificateholders will receive, on the
Distribution Date on or immediately following the last day of the Funding
Period, a prepayment of principal in an amount equal to the Pre-Funded Amount
remaining in the Pre-Funding Account following the purchase of any Subsequent
Receivables on such Distribution Date. It is anticipated that the principal
amount of Subsequent Receivables sold to the Trust will not be exactly equal to
the amount on deposit in the Pre-Funding Account and that therefore there will
be at least a nominal amount of principal prepaid to the Certificateholders.
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<PAGE> 50
Each Subsequent Receivable must satisfy the eligibility criteria specified
in the Agreement at the time of its addition. However, Subsequent Receivables
may have been originated by CCC at a later date using credit criteria different
from those which were applied to the Initial Receivables and may be of a
different credit quality and seasoning. In addition, an increasing percentage of
the Subsequent Receivables may be Fixed Value Receivables or Receivables
generated under the Market Value Pricing program. Therefore, following the
transfer of Subsequent Receivables to the Trust, the characteristics of the
entire Receivables Pool included in the Trust may vary significantly from those
of the Initial Receivables. See "The Receivables Pool" herein and "The
Receivables Pools" in the Prospectus.
Social, Economic and Other Factors. The ability of CCC to generate
Subsequent Receivables is largely dependent upon the level of retail sales of
automobiles and light duty trucks. The level of retail sales of automobiles and
light duty trucks may change as a result of a variety of social and economic
factors. Economic factors include interest rates, unemployment levels, the rate
of inflation and consumer perceptions of economic conditions generally. However,
the Seller is unable to determine and has no basis to predict whether or to what
extent economic or social factors will affect the level of vehicle sales.
Trust's Relationship to the Seller and Chrysler Credit Corporation;
Financial Condition of Seller and Chrysler Corporation. Neither the Seller nor
CCC is generally obligated to make any payments in respect of the Certificates
or the Receivables. However, the ability of the Seller to convey Receivables on
Subsequent Transfer Dates is completely dependent upon the generation of
additional receivables by CCC. The ability of CCC to generate receivables is in
turn dependent to a large extent on the sales of automobiles and light duty
trucks manufactured or distributed by Chrysler Corporation and its consolidated
subsidiaries ("Chrysler"). If, during the Funding Period, Chrysler were
temporarily or permanently no longer manufacturing or distributing vehicles, the
rate of sales of automobiles and light duty trucks manufactured by Chrysler
would decrease, adversely affecting the ability of the Seller to sell
Receivables to the Trust. The use of incentive programs (e.g., manufacturers'
rebate programs) may also affect retail sales. There can be no assurance,
therefore, that CCC will continue to generate receivables at the same rate as in
prior years. In addition, if CCC were to cease acting as Servicer, delays in
processing payments on the Receivables and information in respect thereof could
occur and result in delays in payments to the Certificateholders.
Chrysler reported earnings before income taxes of $1.6 billion for the
second quarter of 1994, compared with $1.1 billion for the second quarter of
1993. For the first six months of 1994, Chrysler reported earnings before income
taxes and the cumulative effect of changes in accounting principles of $3.1
billion, compared with $2.0 billion for the comparable period of 1993. Pre-tax
earnings for the second quarter and first six months of 1993 included gains on
sales of automotive assets and investments of $171 million.
The improvement in operating results in the second quarter and first six
months of 1994 over the corresponding periods of 1993 resulted from an increase
in sales volume and pricing actions, including lower per unit sales incentives,
partially offset by increased employee costs. Chrysler's worldwide factory car
and truck sales for the three and six months ended June 30, 1994 were 702,802
units, a 7 percent increase from the second quarter of 1993, and 1,443,400
units, and 11 percent increase over the first six months of 1993. Combined U.S.
and Canadian dealers' days supply of vehicle inventory decreased to 45 days at
June 30, 1994 from 63 days at December 31, 1993 and 50 days at June 30, 1993.
Net earnings for the second quarter of 1994 were $956 million, or $2.61 per
common share, compared with $685 million, or $1.86 per common share, in the
second quarter of 1993. Net earnings for the six months ended June 30, 1994 were
$1.9 billion, compared to a net loss of $3.8 billion for the comparable period
of 1993. The net loss for the first six months of 1993 resulted from a charge of
$4.7 billion, or $13.86 per common share, for the cumulative effect of a change
in accounting principle related to the adoption of Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." Results for the first six months of 1993 also
included a charge of $283 million, or $0.84 per common share, for the cumulative
effect of a change in accounting principle relating to the adoption of SFAS No.
112, "Employers' Accounting for Postemployment Benefits."
Chrysler reported earnings before income taxes and the cumulative effect of
changes in accounting principles of $3.8 billion in 1993, compared with $934
million in 1992. The earnings in 1993 included a gain on sales of automotive
assets and investments of $265 million. Earnings in 1992 included a gain on the
sale of an
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automotive investment of $142 million, a $110 million charge for reducing
investments of Chrysler Canada Ltd. and certain of its employee benefit plans in
a real estate investment concern to their estimated net realizable value, and a
$101 million restructuring charge related to the realignment of Chrysler's
short-term vehicle rental subsidiaries. Excluding the effect of these items,
Chrysler's pre-tax earnings for 1993 and 1992 were $3.6 billion and $1.0
billion, respectively.
The improvement in 1993 over 1992 was primarily the result of a substantial
increase in unit sales volume, pricing actions, including significantly lower
per unit sales incentives, and an improved mix of higher-margin products,
partially offset by increased labor and benefit costs. Chrysler's worldwide
factory car and truck sales during 1993 increased 14 percent to 2,475,738 units.
U.S. and Canadian dealers' days supply of vehicle inventory decreased to 63 days
at December 31, 1993 from 72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect of
changes in accounting principles, Chrysler reported a net loss for 1993 of $2.6
billion, or $7.62 per common share, compared with net earnings of $723 million,
or $2.21 per common share for 1992. The net loss for 1993 resulted from a charge
of $4.7 billion, or $13.57 per common share, for the cumulative effect of a
change in accounting principle related to the adoption of SFAS No. 106. Also
included in the 1993 results was a charge of $283 million, or $0.82 per common
share, for the cumulative effect of a change in accounting principle relating to
the adoption of SFAS No. 112. Net earnings for 1992 included a $218 million, or
$0.74 per common share, favorable cumulative effect of a change in accounting
principle relating to the adoption of SFAS No. 109, "Accounting for Income
Taxes".
During 1992 and 1993, Chrysler took various actions to strengthen its
financial condition, improve liquidity and add to its equity base in order to
ensure its ability to carry out its new product development and facility
modernization programs without significant interruption. In the second and third
quarters of 1993, Chrysler sold its remaining 50.3 million shares of Mitsubishi
Motors Corporation ("MMC") stock for net proceeds of $329 million and sold the
plastics operations of its Acustar division for net proceeds of $132 million. In
February 1993, Chrysler issued 52 million shares of common stock for net
proceeds of $1.95 billion. In 1992, Chrysler sold 43.6 million shares of MMC
stock for net proceeds of $215 million and issued 1.7 million shares of
convertible preferred stock for net proceeds of $836 million.
CFC's earnings before taxes were $69 million and $144 million for the three
and six months ended June 30, 1994, which compares to $62 million and $112
million for the comparable periods of 1993, before the cumulative effect of
changes in accounting principles. The increase in 1994 earnings before taxes and
accounting changes results from higher levels of automotive financing and lower
provisions for credit losses, partially offset by reduced retail automotive
margins.
CFC's net earnings were $44 million and $91 million for the three and six
months ended June 30, 1994 compared to $44 million and $51 million in the
comparable periods of 1993. Net earnings for the six months ended June 30, 1993
included charges totaling $30 million from the adoption of SFAS No. 106 and SFAS
No. 112.
CFC reported net earnings of $129 million for 1993 compared to $231 million
for 1992. Accounting changes in 1993 and 1992 negatively impact the net earnings
comparison by $81 million. Net earnings for 1993 included a $30 million
after-tax charge from the adoption of SFAS No. 106 and SFAS No. 112, while 1992
net earnings included a $51 million favorable after-tax adjustment from the
adoption of SFAS No. 109.
CFC's earnings before the cumulative effect of changes in accounting
principles were $159 million for 1993 and $180 million for 1992. The decline in
earnings before accounting changes resulted largely from higher borrowing costs
incurred under CFC's revolving credit agreements.
Both Chrysler and CFC regained investment grade credit ratings in 1993. The
improved credit ratings reflect Chrysler's improved operating results, the
significant improvements in Chrysler's balance sheet (including reductions in
its outstanding debt and unfunded pension obligation), and CFC's improved
liquidity.
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information with
the Commission. For further information regarding Chrysler and CFC reference is
made to such reports and other information which are available as described
under "Available Information" in the Prospectus.
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<PAGE> 52
Subordination; Limited Assets. Distributions of interest and principal on
the Class B Certificates will be subordinated in priority of payment to interest
and principal due on the Class A Certificates. Consequently, the Class B
Certificateholders will not receive any distributions with respect to a
Collection Period until the full amount of interest on and principal of the
Class A Certificates on such Distribution Date has been distributed to the Class
A Certificateholders. Any amounts released from the Reserve Account to the
Company will not be available to the Certificateholders.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables, the
Pre-Funding Account and the Reserve Account. Holders of the Certificates must
rely for repayment upon payments on the Receivables and, if and to the extent
available, amounts on deposit in the Pre-Funding Account and the Reserve
Account. The Pre-Funding Account will be available only during the Funding
Period and is designed solely to cover obligations of the Trust relating to a
portion of its funds not invested in Receivables and is not designed to cover
losses on the Receivables. Similarly, although funds in the Reserve Account will
be available on each Distribution Date to cover shortfalls in distributions of
interest and principal on the Certificates, amounts to be deposited in the
Reserve Account are limited in amount. If the Reserve Account is exhausted, the
Trust will depend solely on current distributions on the Receivables to make
distributions on the Certificates.
Ratings of the Certificates. It is a condition to the issuance of the
Certificates that the Class A Certificates be rated in the highest rating
category, and the Class B Certificates be rated " " or its equivalent, by at
least two nationally recognized rating agencies (the "Rating Agencies"). A
rating is not a recommendation to purchase, hold or sell Certificates, inasmuch
as such rating does not comment as to market price or suitability for a
particular investor. The ratings of the Certificates address the likelihood of
the payment of principal and interest on the Certificates pursuant to their
terms. However, the Rating Agencies do not evaluate, and the ratings of the
Certificates do not address, the likelihood that the Certificate Prepayment
Premium will be paid. There can be no assurance that a rating will remain for
any given period of time or that a rating will not be lowered or withdrawn
entirely by a Rating Agency if in its judgment circumstances in the future so
warrant.
THE TRUST
GENERAL
The Seller will establish the Trust by selling and assigning the Trust
property, as described below, to the Trustee in exchange for the Certificates.
The Servicer will service the Receivables pursuant to the Agreement and will be
compensated for acting as the Servicer. See "Description of the
Certificates -- Servicing Compensation and Payment of Expenses". To facilitate
servicing and to minimize administrative burden and expense, the Servicer will
be appointed custodian for the Receivables by the Trustee, but will not stamp
the Receivables to reflect the sale and assignment of the Receivables to the
Trust or amend the certificates of title of the Financed Vehicles. In the
absence of amendments to the certificates of title, the Trustee may not have
perfected security interests in the Financed Vehicles securing the Receivables
originated in some states. See "Certain Legal Aspects of the Receivables" in the
Prospectus.
If the protection provided to the Certificateholders by the Reserve Account
and, in the case of the Class A Certificateholders, the subordination of the
Class B Certificates is insufficient, the Trust will look only to the Obligors
on the Receivables and the proceeds from the repossession and sale of Financed
Vehicles which secure defaulted Receivables. In such event, certain factors,
such as the Trust's not having first priority perfected security interests in
some of the Financed Vehicles, may affect the Trust's ability to realize on the
collateral securing the Receivables, and thus may reduce the proceeds to be
distributed to Certificateholders with respect to the Certificates. See
"Description of the Certificates -- Distributions" and "-- Reserve Account"
herein and "Certain Legal Aspects of the Receivables" in the Prospectus.
Each Certificate represents a fractional undivided ownership interest in
the Trust. The Trust property includes retail instalment sale contracts between
Dealers and Obligors, and all payments due thereunder on or after the related
Cutoff Date with respect to the Precomputed Receivables and all payments
received
S-12
<PAGE> 53
thereunder on or after the related Cutoff Date with respect to the Simple
Interest Receivables. The Trust property also includes (i) such amounts as from
time to time may be held in one or more trust accounts established and
maintained by the Servicer pursuant to the Agreement, as described below; (ii)
security interests in the Financed Vehicles and any accessions thereto; (iii)
the rights to proceeds with respect to the Receivables from claims on physical
damage, credit life and disability insurance policies covering the Financed
Vehicles or the Obligors, as the case may be; (iv) the interest of the Seller in
any proceeds with respect to the Receivables from recourse to Dealers on
Receivables or Financed Vehicles with respect to which the Servicer has
determined that eventual repayment in full is unlikely; (v) any property that
shall have secured a Receivable and that shall have been acquired by the
Trustee; (vi) the Pre-Funded Account and (vii) any and all proceeds of the
foregoing. The Reserve Account will be maintained by the Trustee for the benefit
of the Certificateholders, but will not be part of the Trust.
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include the Initial
Receivables purchased as of the Initial Cutoff Date and will include any
Subsequent Receivables purchased as of any Subsequent Cutoff Date (the Initial
Cutoff Date or any Subsequent Cutoff Date being individually referred to herein
as a "Cutoff Date").
The Initial Receivables were purchased, and the Subsequent Receivables were
or will be purchased, by the Servicer from Dealers in the ordinary course of
business, and were or will be selected from the Seller's portfolio for inclusion
in the Receivables Pool by several criteria, some of which are set forth in the
Prospectus under "The Receivables Pools", as well as the requirement that each
Receivable (i) has an outstanding gross balance of at least $1,000 and (ii) as
of the applicable Cutoff Date, was not or will not be more than 90 days past
due. As of the applicable Cutoff Date, no Obligor on any Receivable was or will
have been noted in the related records of the Servicer as being the subject of a
bankruptcy proceeding, and no Obligor on any Receivable will have financed a
Financed Vehicle under CCC's "New-Finance Buyer Plan" program. No selection
procedures believed by the Seller to be adverse to Certificateholders were or
will be used in selecting the Receivables.
The obligation of the Trust to purchase the Subsequent Receivables on a
Subsequent Transfer Date will be subject to the Receivables in the Trust,
including the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria: (i) not more than %
of the principal balances of the Receivables in the Trust will represent
vehicles financed at CCC's used vehicle rates, and (ii) the weighted average APR
of the Receivables in the Trust will not be less than %, unless the Seller
increases the Reserve Account Initial Deposit by certain specified amounts. In
addition, such obligation will be subject to the Receivables, including the
Subsequent Receivables to be transferred to the Trust on such Subsequent
Transfer Date, having a weighted average remaining term not greater than
months. Such criteria will be based on the characteristics of the
Initial Receivables on the Initial Cutoff Date and any Subsequent Receivables on
the related Subsequent Cutoff Dates. In addition, no Receivable will be sold to
the Trust if such Receivable has been repurchased by the Seller through the
exercise of optional repurchase provisions contained in other securitization
transactions.
The Initial Receivables will represent approximately % of the aggregate
initial principal balance of the Certificates. However, except for the criteria
described in the preceding paragraphs, there will be no required characteristics
of the Subsequent Receivables. Therefore, following the transfer of Subsequent
Receivables to the Trust, the aggregate characteristics of the entire
Receivables Pool, including the composition of the Receivables, the distribution
by annual percentage rate ("APR") and the geographic distribution described in
the following tables, may vary significantly from those of the Initial
Receivables.
S-13
<PAGE> 54
The composition, distribution by APR and geographic distribution of the
Initial Receivables as of the Initial Cutoff Date are as set forth in the
following tables.
COMPOSITION OF THE INITIAL RECEIVABLES AS OF THE
INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE APR AGGREGATE
OF PRINCIPAL NUMBER
RECEIVABLES BALANCE RECEIVABLES
----------- --------- -----------
<S> <C> <C>
% $
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
REMAINING ORIGINAL PRINCIPAL
TERM TERM BALANCE
--------- ---------- ---------
<S> <C> <C>
months months $
</TABLE>
DISTRIBUTION BY APR
OF THE INITIAL RECEIVABLES
AS OF THE INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
APR RANGE RECEIVABLES BALANCE BALANCE
- ----------------------------------------------------------- ----------- --------- ----------
<S> <C> <C> <C>
0.00% to 3.00%............................................. $ %
4.01% to 5.00%.............................................
5.01% to 6.00%.............................................
6.01% to 7.00%.............................................
7.01% to 8.00%.............................................
8.01% to 9.00%.............................................
9.01% to 10.00%............................................
10.01% to 11.00%...........................................
11.01% to 12.00%...........................................
12.01% to 13.00%...........................................
13.01% to 14.00%...........................................
14.01% to 15.00%...........................................
15.01% to 16.00%...........................................
16.01% to 17.00%...........................................
17.01% to 18.00%...........................................
18.01% to 19.00%...........................................
19.01% to 20.00%...........................................
Greater than 20.00%........................................
----------- --------- ---
$ 100%
======== ======== ===
</TABLE>
S-14
<PAGE> 55
GEOGRAPHIC DISTRIBUTION OF THE INITIAL RECEIVABLES
AS OF THEIR RESPECTIVE INITIAL CUTOFF DATES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE PRINCIPAL
STATE(1) BALANCE(2)
- -------- -------------------
<S> <C>
Alabama.....................................................................
Alaska......................................................................
Arizona.....................................................................
Arkansas....................................................................
California..................................................................
Colorado....................................................................
Connecticut.................................................................
Delaware....................................................................
District of Columbia........................................................
Florida.....................................................................
Georgia.....................................................................
Hawaii......................................................................
Idaho.......................................................................
Illinois....................................................................
Indiana.....................................................................
Iowa........................................................................
Kansas......................................................................
Kentucky....................................................................
Louisiana...................................................................
Maine.......................................................................
Maryland....................................................................
Massachusetts...............................................................
Michigan....................................................................
Minnesota...................................................................
Mississippi.................................................................
Missouri....................................................................
Montana.....................................................................
Nebraska....................................................................
Nevada......................................................................
New Hampshire...............................................................
New Jersey..................................................................
New Mexico..................................................................
New York....................................................................
North Carolina..............................................................
North Dakota................................................................
Ohio........................................................................
Oklahoma....................................................................
Oregon......................................................................
Pennsylvania................................................................
Rhode Island................................................................
South Carolina..............................................................
South Dakota................................................................
Tennessee...................................................................
</TABLE>
S-15
<PAGE> 56
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE PRINCIPAL
STATE(1) BALANCE(2)
-------------------
<S> <C>
Texas.......................................................................
Utah........................................................................
Vermont.....................................................................
Virginia....................................................................
Washington..................................................................
West Virginia...............................................................
Wisconsin...................................................................
Wyoming.....................................................................
----
100%
====
</TABLE>
- ---------------
(1) Based on physical addresses of the Dealers originating the Receivables.
(2) Percentages may not add to 100.0% because of rounding.
By aggregate principal balance, approximately % of the Initial
Receivables constitute Precomputed Receivables, % of the Initial Receivables
constitute Simple Interest Receivables and % constitute Fixed Value
Receivables. See "The Receivables Pools" in the Prospectus for a further
description of the characteristics of Precomputed Receivables, Simple Interest
Receivables and Fixed Value Receivables.
By aggregate principal balance, approximately % of the Initial
Receivables, constituting % of the number of Initial Receivables, as of the
Initial Cutoff Date, represent vehicles financed at CCC's new vehicle rates,
which apply to new and certain previously owned vehicles; the remainder
represent vehicles financed at CCC's used vehicle rates. Approximately % of
the aggregate principal balance of the Initial Receivables represent financing
of vehicles manufactured or distributed by Chrysler.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Set forth below is certain information concerning the experience of the
Seller and its United States subsidiaries pertaining to retail new and used
automobile and light duty truck receivables, including those previously sold
which CCC continues to service. It is expected that the Receivables will be
originated on average more recently than were, on average, the automobile and
light duty truck receivables in the portfolio serviced by CCC. CCC began
originating Fixed Value Receivables in July 1991. There can be no assurance that
the delinquency, repossession and net loss experience on the Receivables will be
comparable to that set forth below.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
------------------------------------------ ------------------------------------------
1994 1993 1993 1992
------------------- ------------------- ------------------- -------------------
NUMBER NUMBER NUMBER NUMBER
OF OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------ --------- ------ --------- ------ --------- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio............................. 1,397,708 $15,598 1,333,839 $12,768 1,352,218 $14,116 1,344,799 $12,082
Period of Delinquency
31-60 Days.......................... 16,966 $ 173 12,810 $ 109 16,350 $ 153 15,964 $ 134
61 Days or More..................... 1,494 18 1,097 10 1,383 15 1,376 13
--------- ------- --------- ------- --------- ------- --------- -------
Total Delinquencies................... 18,460 $ 191 13,907 $ 119 17,733 $ 168 17,340 $ 147
Total Delinquencies as a Percent of
the Portfolio....................... 1.32% 1.22% 1.04% 0.93% 1.31% 1.19% 1.29% 1.22%
</TABLE>
S-16
<PAGE> 57
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------------------------------------------------------
1991 1990 1989(2)
-------------------- -------------------- --------------------
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------ --------- ------ --------- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio.......................................... 1,437,451 $11,994 1,622,834 $13,545 1,756,185 $14,134
Period of Delinquency
31-60 Days....................................... 21,025 $ 180 23,278 $ 206 19,096 $ 174
61 Days or More.................................. 2,048 20 2,496 25 2,439 24
-------- ------- -------- ------- -------- -------
Total Delinquencies................................ 23,073 $ 200 25,774 $ 231 21,535 $ 198
Total Delinquencies as a Percent of the
Portfolio........................................ 1.61% 1.67% 1.59% 1.71% 1.23% 1.40%
</TABLE>
- ---------------
(1) All amounts and percentages are based on the gross amount scheduled to be
paid on each contract, including unearned finance and other charges. The
information in the table includes an immaterial amount of retail
installment sale contracts on vehicles other than automobiles and light
duty trucks and includes previously sold contracts which CCC continues to
service.
(2) In 1990 the method by which delinquencies are calculated was changed.
Previously, an account was considered delinquent if more than $9.99 was
past due. Under the current method, an account is considered delinquent if
10% or more of the scheduled payment is past due. As a result,
delinquencies reported at December 31, 1989 are not directly comparable to
those reported in later periods.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding During
the Period..................... $14,799 $12,268 $12,882 $11,818 $12,709 $13,410 $14,585
Average Number of Contracts
Outstanding During the
Period......................... 1,374,657 1,337,296 1,341,084 1,382,898 1,517,178 1,696,175 1,814,040
Percent of Contracts Acquired
During the Period with Recourse
to the Dealer.................. 17.9% 16.2% 16.2% 15.8% 21.7% 22.7% 26.8%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2)................. 2.11% 2.10% 2.15% 2.31% 2.63% 2.33% 2.21%
Net Losses as a Percent of
Liquidations(3)(4)............. 1.11% 1.20% 1.34% 1.71% 2.28% 1.81% 1.66%
Net Losses as a Percent of
Average Amount
Outstanding(2)(3).............. 0.59% 0.71% 0.75% 0.97% 1.21% 0.98% 0.83%
</TABLE>
- ---------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including unearned finance
and other charges. The information in the table includes an immaterial
amount of retail installment sales contracts on vehicles other than
automobiles and light duty trucks and includes previously sold contracts
that CCC continues to service.
(2) Percentages have been annualized for the six months ended June 30, 1994 and
1993 and are not necessarily indicative of the experience for the year.
(3) In 1994 the method by which net losses are calculated was changed. Currently
net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any recoveries
on contracts charged off in the period or any periods, including any losses
resulting from disposition expenses and any losses resulting from the
failure to recover commissions to dealers with respect to contracts that
are prepaid or charged off. Under the previous method, reported losses
excluded disposition costs. Prior period loss statistics have been restated
to conform to current period classifications.
S-17
<PAGE> 58
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of monthly cash payments and charge-offs.
The net loss figures above reflect the fact that the Seller had recourse to
Dealers on a portion of its retail installment sale contracts. Approximately
% of the aggregate principal balance of the Initial Receivables as of the
Initial Cutoff Date represents contracts with recourse to Dealers. This factor
was taken into consideration in determining the principal balances of the Class
A and Class B Certificates and the Specified Reserve Account Balance. The Seller
applies underwriting standards to the purchase of contracts without regard to
whether recourse to Dealers is provided. Based on its experience, the Seller
believes that there is no material difference between the rates of delinquency
and repossession on contracts with recourse against Dealers as compared to
contracts without recourse against Dealers. However, the net loss experience of
contracts without recourse against Dealers is higher than that of contracts with
recourse against Dealers because, under its recourse obligation, the Dealer is
responsible to the Seller for payment of the unpaid balance of the contract,
provided the Seller retakes the vehicle from the retail buyer and returns it to
the Dealer within a specified time. In the event of a Dealer's bankruptcy, a
bankruptcy trustee might attempt to characterize recourse sales of contracts as
loans to the Dealer secured by the contracts. Such an attempt, if successful,
could result in payment delays or losses on the affected Receivables.
THE SELLER AND THE SERVICER
Information regarding the Seller and the Servicer is set forth under "The
Seller and the Servicer" in the Prospectus. In addition, as of June 30, 1994,
the Seller had nearly 3,100 employees and was servicing $30.2 billion in finance
receivables managed, and the Servicer provided financing services to automobile
dealers and their customers through 86 branches in the United States. During the
first six months of 1994, the Seller and CCC financed or leased approximately
429,000 vehicles at retail, including approximately 286,000 new Chrysler
passenger cars and light duty trucks representing 24% of Chrysler's U.S. retail
and fleet deliveries. The Seller and CCC also financed at wholesale
approximately 844,000 new Chrysler passenger cars and light duty trucks
representing 73% of Chrysler's U.S. factory unit sales for the six months ended
June 30, 1994. Wholesale vehicle financing accounted for 74% of the total U.S.
automotive financing volume of the Seller and CCC in the first six months of
1994 and represented 7% of gross automotive finance receivables outstanding in
the U.S. at June 30, 1994.
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES
Information regarding certain maturity and prepayment considerations with
respect to the Certificates is set forth under "Weighted Average Life of the
Securities" in the Prospectus. As the rate of payment of principal of each class
of Certificates depends on the rate of payment (including prepayments and
liquidations due to default) of the principal balance of the Receivables, the
final distribution in respect of the Certificates could occur significantly
earlier than the Final Scheduled Distribution Date. Certificateholders will bear
the risk of being able to reinvest principal payments on the Certificates at
yields at least equal to the yield on their respective Certificates.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the terms of the Agreement, a
form of which has been filed as an exhibit to the Registration Statement. A copy
of the Agreement will be filed with the Commission following the issuance of the
Certificates. The following summary describes certain terms of the Certificates
and the Agreement. The summary does not purport to be complete and is subject
to, and qualified in its entirety by reference to, all the provisions of the
Certificates and the Agreement. The following summary supplements, and to the
extent inconsistent therewith replaces, the description of the general terms and
provisions of the Certificates of any given series and the related Agreement set
forth in the Prospectus, to which description reference is hereby made.
S-18
<PAGE> 59
GENERAL
In general, it is intended that Class A Certificateholders receive, on each
Distribution Date, the Class A Percentage of the Principal Distribution Amount
plus interest at the Class A Pass Through Rate on the Class A Principal Balance.
Subject to the prior rights of the Class A Certificateholders, it is intended
that the Class B Certificateholders receive, on each Distribution Date, the
Class B Percentage of the Principal Distribution Amount plus interest at the
Class B Pass Through Rate on the Class B Principal Balance.
The Certificates will evidence interests in the Trust created pursuant to
the Agreement. The Class A Certificates will evidence in the aggregate an
undivided ownership interest (the "Class A Percentage") of approximately % of
the Trust and the Class B Certificates will evidence in the aggregate an
undivided ownership interest (the "Class B Percentage") of approximately % of
the Trust. [The Class B Certificates, which are not being offered hereby,
initially will be held by the Company.]
MANDATORY REPURCHASE
Cash distributions to Certificateholders will be made, on a pro rata basis,
on the Distribution Date on or immediately following the last day of the Funding
Period in the event that the amount on deposit in the Pre-Funding Account after
giving effect to the purchase of all Subsequent Receivables, including any such
purchase on such date, exceeds $ (a "Mandatory Repurchase").
The Certificate Prepayment Premium will be payable by the Trust to the
Certificateholders pursuant to a Mandatory Repurchase if the amount on deposit
in the Pre-Funding Account exceeds $ . The Certificate Prepayment Premium
will equal the excess, if any, discounted as described below, of (i) the amount
of interest that would accrue on the remaining Pre-Funded Amount (the
"Certificate Prepayment Amount") at the Class A Pass Through Rate or the Class B
Pass Through Rate, as applicable, during the period commencing on and including
the Distribution Date on which such Certificate Prepayment Amount is required to
be distributed to Certificateholders to but excluding over (ii) the
amount of interest that would have accrued on such Certificate Prepayment Amount
over the same period at a per annum rate of interest equal to the bond
equivalent yield to maturity on the Determination Date preceding such
Distribution Date on the . Such excess shall be discounted to
present value to such Distribution Date at the yield described in clause (ii)
above. The Trust's obligation to pay the Certificate Prepayment Premium shall be
limited to funds that are received from the Seller under the Agreement as
liquidated damages for the failure to deliver Subsequent Receivables having an
aggregate principal amount equal to the Pre-Funded Amount. No other assets of
the Trust will be available for the purpose of making such payment.
OPTIONAL PREPAYMENT
If the Servicer exercises its option to purchase the Receivables when the
Pool Balance declines to 10% or less of the Initial Pool Balance, the Class A
Certificateholders will receive an amount in respect of the Class A Certificates
equal to the outstanding Class A Certificate Balance together with accrued
interest at the Class A Pass Through Rate, the Class B Certificateholders will
receive an amount in respect of the Class B Certificates equal to the
outstanding Class B Certificate Balance together with accrued interest at the
Class B Pass Through Rate, which distributions shall effect early retirement of
the Certificates. See "Description of the Transfer and Servicing
Agreements -- Termination" in the Prospectus.
SALE AND ASSIGNMENT OF RECEIVABLES; SUBSEQUENT RECEIVABLES
Certain information with respect to the conveyance of the Initial
Receivables from the Seller to the Trust on the Closing Date pursuant to the
Agreement is set forth under "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables" in the Prospectus. In
addition, during the Funding Period, pursuant to the Agreement, the Seller will
be obligated to sell to the Trust Subsequent Receivables having an aggregate
principal balance equal to approximately $ (such amount being equal to
the initial Pre-Funded Amount) to the extent that such Subsequent Receivables
are available.
S-19
<PAGE> 60
During the Funding Period on each Subsequent Transfer Date, subject to the
conditions described below, the Seller will sell and assign to the Trust,
without recourse, the Seller's entire interest in the Subsequent Receivables
designated by the Seller as of the related Subsequent Cutoff Date and identified
in a schedule attached to a subsequent transfer assignment relating to such
Subsequent Receivables executed on such date by the Seller. It is expected that
on the Closing Date, subject to the conditions described below, certain of the
Subsequent Receivables designated by the Seller and arising between the Initial
Cutoff Date and the Closing Date will be conveyed to the Trust. Upon the
conveyance of Subsequent Receivables to the Trust on a Subsequent Transfer Date,
(i) the Pool Balance will increase in an amount equal to the aggregate principal
balance of the Subsequent Receivables, (ii) an amount equal to % of the
aggregate principal balance of such Subsequent Receivables will be withdrawn
from the Pre-Funding Account and will be deposited in the Reserve Account and
(iii) an amount equal to the excess of the aggregate principal balance of such
Subsequent Receivables over the amount described in clause (ii) will be
withdrawn from the Pre-Funding Account and paid to the Seller.
Any conveyance of Subsequent Receivables is subject to the satisfaction, on
or before the related Subsequent Transfer Date, of the following conditions
precedent, among others: (i) each such Subsequent Receivable must satisfy the
eligibility criteria specified in the Agreement (including that such Subsequent
Receivable has not been repurchased by the Seller through the exercise of
optional repurchase provisions contained in another securitization transaction);
(ii) the Seller will not have selected such Subsequent Receivables in a manner
that it believes is adverse to the interests of the Certificateholders; (iii) as
of the related Subsequent Cutoff Date, the Receivables, including any Subsequent
Receivables conveyed by the Seller as of such Subsequent Cutoff Date, satisfy
the criteria described under "The Receivables Pool" herein and "The Receivables
Pools" in the Prospectus; (iv) the applicable Reserve Account Initial Deposit
for such Subsequent Transfer Date shall have been made; and (v) the Seller shall
have executed and delivered to the Trustee a written assignment conveying such
Subsequent Receivables to the Trust (including a schedule identifying such
Subsequent Receivables). Moreover, any such conveyance of Subsequent Receivables
made during any Collection Period will also be subject to the satisfaction, on
or about the fifteenth day of the month following the end of such Collection
Period, of the following conditions subsequent, among others: (i) the Seller
will have delivered certain opinions of counsel to the Trustee and the Rating
Agencies with respect to the validity of the conveyance of all such Subsequent
Receivables conveyed during such Collection Period; (ii) the Trustee shall have
received written confirmation from a firm of certified independent public
accountants that, as of each applicable Subsequent Cutoff Date, the Receivables
in the Trust at that time, including the Subsequent Receivables conveyed by the
Seller as of such Subsequent Cutoff Date, satisfied the parameters described
under "The Receivables Pool" herein and under "The Receivables Pools" in the
Prospectus; and (iii) the Rating Agencies shall have each notified the Seller in
writing that, following the addition of all such Subsequent Receivables, the
Class A Certificates and the Class B Certificates are rated in the same
respective rating categories in which they were rated at the Closing Date. The
Seller will immediately repurchase any Subsequent Receivable, at a price equal
to the Purchase Amount thereof, upon the failure of the Seller to satisfy any of
the foregoing conditions subsequent with respect thereto.
Subsequent Receivables may have been originated by CCC at a later date
using credit criteria different from those which were applied to the Initial
Receivables. See "Special Considerations -- The Receivables and the Pre-Funding
Account" and "The Receivables Pool" herein.
ACCOUNTS
In addition to the Accounts referred to under "Description of the Transfer
and Servicing Agreements -- Accounts" in the Prospectus, the Servicer will also
establish and will maintain with the Trustee, the Payahead Account, the
Pre-Funding Account and the Reserve Account, in the name of the Trustee on
behalf of the Certificateholders. The Reserve Account will not be part of the
Trust.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the Servicer
will be 1.00% per annum of the Pool Balance as of the first day of the
Collection Period (after giving effect to distributions to be made on the
S-20
<PAGE> 61
following Distribution Date). The Servicing Fee (together with any portion of
the Servicing Fee that remains unpaid from prior Distribution Dates) will be
paid on each Distribution Date solely to the extent of the Interest Distribution
Amount. See "Description of the Transfer and Servicing Agreements -- Servicing
Compensation and Payment of Expenses" in the Prospectus.
DISTRIBUTIONS
Deposits to Collection Account. On or about the Business Day of
each month (the "Determination Date"), the Servicer will provide the Trustee
with certain information with respect to the preceding Collection Period,
including the amount of aggregate collections on the Receivables, the aggregate
Advances to be made by the Servicer and the aggregate Purchase Amount of
Receivables to be repurchased by the Seller or to be purchased by the Servicer
(exclusive of Payaheads allocable to principal that have not been applied as
payments under the related Receivables in such Collection Period and inclusive
of Payaheads allocable to principal that have been applied as payments under the
related Receivables in such Collection Period).
On or before each Distribution Date, the Servicer shall cause to be
transferred from the Payahead Account to the Collection Account scheduled
payments due during the related Collection Period or as may be applied to full
prepayments on the Precomputed Receivables.
On or before each Distribution Date, the Servicer will cause the Total
Distribution Amount to be deposited into the Collection Account. The "Total
Distribution Amount" for a Distribution Date shall be the sum of the Interest
Distribution Amount and the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses). "Realized Losses" means the
excess of the principal balance of any Liquidated Receivable over Liquidation
Proceeds to the extent allocable to principal received in the Collection Period
in which the Receivable became a Liquidated Receivable.
The "Interest Distribution Amount" for a Distribution Date generally will
be the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on the Receivables (including
amounts withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account) allocable to interest; (ii) all proceeds of the
liquidation of defaulted Receivables ("Liquidated Receivables"), net of expenses
incurred by the Servicer in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Receivables
("Liquidation Proceeds"), to the extent attributable to interest due thereon in
accordance with the Servicer's customary servicing procedures, and all
recoveries in respect of Liquidated Receivables which were written off in prior
Collection Periods; (iii) all Advances made by the Servicer of interest due on
the Receivables; (iv) the Purchase Amount of each Receivable that was
repurchased by the Seller or purchased by the Servicer under an obligation which
arose during the related Collection Period, to the extent attributable to
accrued interest thereon; and (v) Investment Earnings for such Distribution
Date.
The "Principal Distribution Amount" for a Distribution Date generally will
be the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on the Receivables (including
amounts withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account) allocable to principal; (ii) all Liquidation Proceeds
attributable to the principal amount of Receivables which became Liquidated
Receivables during such Collection Period in accordance with the Servicer's
customary servicing procedures, plus the amount of Realized Losses with respect
to such Liquidated Receivables; (iii) all Precomputed Advances made by the
Servicer of principal due on the Precomputed Receivables; (iv) to the extent
attributable to principal, the Purchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under an
obligation which arose during the related Collection Period; (v) partial
prepayments relating to refunds of extended warranty protection plan costs or of
physical damage, credit life or disability insurance policy premiums, but only
if such costs or premiums were financed by the respective Obligor as of the date
of the original contract; and (vi) on the Final Scheduled Distribution Date, any
amounts advanced by the Servicer with respect to principal on the Receivables.
S-21
<PAGE> 62
The Interest Distribution Amount and the Principal Distribution Amount on
any Distribution Date shall exclude the following:
(i) amounts received on Precomputed Receivables to the extent that the
Servicer has previously made an unreimbursed Precomputed Advance;
(ii) Liquidation Proceeds with respect to a particular Precomputed
Receivable to the extent of any unreimbursed Precomputed Advances thereon;
(iii) all payments and proceeds (including Liquidation Proceeds) of
any Receivables the Purchase Amount of which has been included in the Total
Distribution Amount in a prior Collection Period;
(iv) amounts received in respect of interest on Simple Interest
Receivables during the preceding Collection Period in excess of the amount
of interest that would have been due during the Collection Period on Simple
Interest Receivables at their respective APRs (assuming that a payment is
received on each Simple Interest Receivable on the due date thereof);
(v) Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of
any unreimbursed Simple Interest Advances; and
(vi) amounts released from the Pre-Funding Account.
The Interest Distribution Amount and Principal Distribution Amount with
respect to any Distribution Date will not be determined on the basis of the
reconciliation methodology described under "Description of the Transfer and
Servicing Agreements -- Distributions -- Allocation of Collections on
Receivables; Reconciliation".
Calculation of Distributable Amounts. The "Class A Distributable Amount"
with respect to a Distribution Date shall be an amount equal to the sum of (i)
the "Class A Principal Distributable Amount", consisting of the Class A
Percentage of the Principal Distribution Amount, plus (ii) the "Class A Interest
Distributable Amount", consisting of thirty (30) days' interest at the Class A
Pass Through Rate on the Class A Certificate Balance as of the close of business
on the last day of the preceding Collection Period. In addition, on the Final
Scheduled Distribution Date, the Class A Principal Distributable Amount will
include the lesser of (A) the Class A Percentage of any payments of principal
due and remaining unpaid on each Receivable in the Trust as of the last day of
the preceding Collection Period and (B) the portion of such amount necessary
(after giving effect to the other amounts described above to be distributed to
the Class A Certificateholders on such Distribution Date and allocable to
principal) to reduce the Class A Certificate Balance to zero.
The "Class A Certificate Balance" shall equal, initially, $ and,
thereafter, shall equal the initial Class A Certificate Balance reduced by all
amounts previously distributed to Class A Certificateholders and allocable to
principal.
The "Class B Distributable Amount" with respect to a Distribution Date
shall be an amount equal to the sum of (i) the "Class B Principal Distributable
Amount", consisting of the Class B Percentage of the Principal Distribution
Amount plus (ii) the "Class B Interest Distributable Amount", consisting of
thirty (30) days' interest at the Class B Pass Through Rate on the Class B
Certificate Balance as of the close of business on the last day of the preceding
Collection Period. In addition, on the Final Scheduled Distribution Date, the
principal required to be distributed to the Class B Certificateholders will
include the lesser of (i) the Class B Percentage of any payments of principal
due and remaining unpaid with respect to the Receivables in the Trust as of the
last day of the preceding Collection Period and (ii) the portion of the amount
in clause (i) above that is necessary (after giving effect to all other amounts
distributed to Class A and Class B Certificateholders on such Distribution Date
and allocable to principal) to reduce the Class B Certificate Balance to zero.
The "Class B Certificate Balance" shall equal, initially, $ and,
thereafter, shall equal the initial Class B Certificate Balance, reduced by all
amounts previously distributed to Class B Certificateholders
S-22
<PAGE> 63
(or deposited in the Reserve Account, but not including the Reserve Account
Initial Deposit) and allocable to principal and by Realized Losses.
Calculation of Amounts to Be Distributed. Prior to each Distribution
Date, the Servicer will calculate the Total Distribution Amount, the Class A
Distributable Amount and the Class B Distributable Amount.
The holders of the Class A Certificates will receive on any Distribution
Date, to the extent of available funds, the Class A Distributable Amount and any
outstanding Class A Interest Carryover Shortfall and Class A Principal Carryover
Shortfall (each as defined below) as of the close of the preceding Distribution
Date. On each Distribution Date on which the sum of the Class A Interest
Distributable Amount and any outstanding Class A Interest Carryover Shortfall
from the preceding Distribution Date (plus interest on such Class A Interest
Carryover Shortfall at the Class A Pass Through Rate from such preceding
Distribution Date to the current Distribution Date, to the extent permitted by
law) exceeds the Class A Percentage of the Interest Distribution Amount (after
payment of the Servicing Fee) on such Distribution Date, the Class A
Certificateholders shall be entitled generally to receive such amounts, first,
from the Class B Percentage of the Interest Distribution Amount; second, if such
amounts are insufficient, from the amounts available in the Reserve Account; and
third, if such amounts are insufficient, from the Class B Percentage of the
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses). The "Class A Interest Carryover Shortfall" as of the close of
any Distribution Date means the excess of the Class A Interest Distributable
Amount for such Distribution Date, plus any outstanding Class A Interest
Carryover Shortfall from the preceding Distribution Date, plus interest on such
outstanding Class A Interest Carryover Shortfall, to the extent permitted by
law, at the Class A Pass Through Rate from such preceding Distribution Date
through the current Distribution Date, over the amount of interest that the
holders of the Class A Certificates actually received on such current
Distribution Date.
On each Distribution Date on which the sum of the Class A Principal
Distributable Amount and any outstanding Class A Principal Carryover Shortfall
from the preceding Distribution Date exceeds the Class A Percentage of the
Principal Distribution Amount on such Distribution Date, the Class A
Certificateholders shall be entitled to receive such amounts first, from the
Class B Percentage of the Principal Distribution Amount (other than the portion
thereof attributable to Realized Losses); second, if such amounts are
insufficient, from amounts available in the Reserve Account; and third, if such
amounts are insufficient, from the Class B Percentage of the Interest
Distribution Amount. The "Class A Principal Carryover Shortfall" as of the close
of any Distribution Date means the excess of the Class A Principal Distributable
Amount plus any outstanding Class A Principal Carryover Shortfall from the
preceding Distribution Date over the amount of principal that the holders of the
Class A Certificates actually received on such current Distribution Date.
The holders of the Class B Certificates will receive on any Distribution
Date, to the extent of available funds, the Class B Distributable Amount and any
outstanding Class B Interest Carryover Shortfall and Class B Principal Carryover
Shortfall (each as defined below) as of the close of the preceding Distribution
Date. On each Distribution Date on which the sum of the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover Shortfall
from the preceding Distribution Date (plus interest on such Class B Interest
Carryover Shortfall at the Class B Pass Through Rate from such preceding
Distribution Date to the current Distribution Date, to the extent permitted by
law) exceeds the Class B Percentage of the Interest Distribution Amount (after
payment of the Servicing Fee) on such Distribution Date less any portion thereof
required to be distributed to the Class A Certificateholders pursuant to their
prior rights as described above, the Class B Certificateholders shall be
entitled generally to receive such amounts, first, from the Class A Percentage
of the Interest Distribution Amount that is not otherwise required to be
distributed to the Class A Certificateholders as described above and, second,
from the amount, if any, available in the Reserve Account (after giving effect
to any withdrawals therefrom for distribution to the Class A Certificateholders
on such Distribution Date). The "Class B Interest Carryover Shortfall" as of the
close of any Distribution Date means the excess of the Class B Interest
Distributable Amount for such Distribution Date, plus any outstanding Class B
Interest Carryover Shortfall from the preceding Distribution Date, plus interest
on such outstanding Class B Interest Carryover Shortfall, to the extent
permitted by law, at the Class B Pass Through Rate from such preceding
Distribution Date through the current Distribution Date, over the amount of
interest that the holders of the Class B Certificates actually received on such
current Distribution Date.
S-23
<PAGE> 64
On each Distribution Date on which the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover Shortfall
from the preceding Distribution Date exceeds the Class B Percentage of the
Principal Distribution Amount on such Distribution Date less any portion thereof
required to be distributed to the Class A Certificateholders pursuant to their
prior rights as described above, the Class B Certificateholders shall be
entitled to receive such amounts, first, from the Interest Distribution Amount
that is not otherwise required to be distributed to the Class A or Class B
Certificateholders as described above and, second, from amounts available in the
Reserve Account (after giving effect to any withdrawals therefrom on such
Distribution Date for distribution to the Class A Certificateholders and for
distribution of interest to the Class B Certificateholders). The "Class B
Principal Carryover Shortfall" as of the close of any Distribution Date means
the excess of the Class B Principal Distributable Amount plus any outstanding
Class B Principal Carryover Shortfall from the preceding Distribution Date over
the amount of principal that the holders of Class B Certificates actually
received on such current Distribution Date.
SUBORDINATION OF THE CLASS B CERTIFICATES; RESERVE ACCOUNT
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables generally will be subordinated to the rights of the
Class A Certificateholders in the event of defaults and delinquencies on the
Receivables as described herein and provided in the Agreement. The protection
afforded to the Class A Certificateholders through subordination will be
effected both by the preferential right of the Class A Certificateholders to
receive current distributions with respect to the Receivables and by the
establishment of the Reserve Account. The Reserve Account will be created with
an initial deposit by the Seller of the Reserve Account Initial Deposit and will
be augmented by deposit therein on each Distribution Date of the amount, if any,
remaining from the Total Distribution Amount after the distributions due to the
Certificateholders have been made until the amount in the Reserve Account
reaches the Specified Reserve Account Balance for such Distribution Date.
The Reserve Account will not be part of or otherwise includible in the
Trust and will be a segregated trust account held by the Trustee. On each
Distribution Date, (i) if the amounts on deposit in the Reserve Account are less
than the Specified Reserve Account Balance for such Distribution Date, the
Trustee will, after payment of any amounts required to be distributed to
Certificateholders and the payment of the Servicing Fee due with respect to the
related Collection Period (including any unpaid Servicing Fees with respect to
prior Collection Periods) withdraw from the Collection Account and deposit in
the Reserve Account the amount remaining in the Collection Account that would
otherwise be distributed to the Company, or such lesser portion thereof as is
sufficient to restore the amount in the Reserve Account to such Specified
Reserve Account Balance for such Distribution Date, and (ii) if the amount on
deposit in the Reserve Account on such Distribution Date (after giving effect to
all deposits or withdrawals therefrom on such Distribution Date) is greater than
the Specified Reserve Account Balance for such Distribution Date, the Trustee
will release and distribute any such excess to the Company. Upon any such
distribution to the Company, the Certificateholders will have no rights in, or
claims to, such amounts.
Amounts held from time to time in the Reserve Account will continue to be
held for the benefit of holders of the Class A Certificates and holders of the
Class B Certificates. Funds in the Reserve Account shall be invested as provided
in the Agreement in Eligible Investments. The Company shall be entitled to
receive all investment earnings on amounts in the Reserve Account. Investment
income on amounts in the Reserve Account will not be available for distribution
to the Certificateholders or otherwise subject to any claims or rights of the
Certificateholders.
The time necessary for the Reserve Account to reach and maintain the
Specified Reserve Account Balance at any time after the Closing Date will be
affected by the delinquency, credit loss, repossession and prepayment experience
of the Receivables and, therefore, cannot be accurately predicted.
The subordination of the Class B Certificates and the Reserve Account
described above are intended to enhance the likelihood of receipt by Class A
Certificateholders of the full amount of principal and interest on the
Receivables due them and to decrease the likelihood that the Class A
Certificateholders will experience losses. However, in certain circumstances,
the Reserve Account could be depleted and shortfalls could result.
S-24
<PAGE> 65
If on any Distribution Date the holders of the Class A Certificates do not
receive the sum of the Class A Distributable Amount, the Class A Interest
Carryover Shortfall and the Class A Principal Carryover Shortfall for such
Distribution Date (after giving effect to any amounts withdrawn from the Reserve
Account and the Class B Percentage of the Total Distribution Amount and applied
to such deficiency, as described above), the holders of the Class B Certificates
generally will not receive any portion of the Total Distribution Amount. While
the Class B Certificateholders are entitled to receive amounts from the Reserve
Account as described above, such entitlement is subordinated to the rights of
the Class A Certificateholders to receive amounts from the Reserve Account as
described above. If the Reserve Account becomes depleted, the Class B
Certificateholders may experience shortfalls in the distributions due them and
incur a loss on their investment.
ERISA CONSIDERATIONS
THE CLASS A CERTIFICATES
Subject to the considerations set forth under "ERISA
Considerations -- Senior Certificates Issued By Trusts That Do Not Issue Notes"
in the Prospectus, the Class A Certificates may be purchased by an employee
benefit plan or an individual retirement account (a "Plan") subject to ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"). A
fiduciary of a Plan must determine that the purchase of a Class A Certificate is
consistent with its fiduciary duties under ERISA and does not result in a
nonexempt prohibited transaction as defined in Section 406 of ERISA or Section
4975 of the Code. For additional information regarding treatment of the Class A
Certificates under ERISA, see "ERISA Considerations" in the Prospectus.
THE CLASS B CERTIFICATES
The Class B Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity. By its acceptance of a Class B Certificate, each Class
B Certificateholder will be deemed to have represented and warranted that it is
not subject to the foregoing limitation. For additional information regarding
treatment of the Class B Certificates under ERISA, see "ERISA Considerations" in
the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Underwriting Agreement"), the Seller has agreed to cause the Trust to sell
to each of the Underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase, the principal amount of [Class
A]Certificates set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL [PRINCIPAL
AMOUNT OF AMOUNT OF
CLASS A CLASS B
UNDERWRITERS CERTIFICATES CERTIFICATES
------------ ------------ ------------
<S> <C> <C>
...................................... $ $
......................................
------------ ------------
Total.................................... $ $ ]
============ ============
</TABLE>
The Seller has been advised by the Underwriters that they propose initially
to offer the [Class A] Certificates to the public at the prices set forth
herein, and to certain dealers at such price less the initial concession not in
excess of % per [Class A] Certificate. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of % per [Class A]
Certificate to certain other dealers. After the initial public offering of the
[Class A] Certificates, the public offering prices and such concessions may be
changed.
S-25
<PAGE> 66
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain
legal matters relating to the Certificates will be passed upon for the
Underwriters and certain federal income tax and other matters will be passed
upon for the Trust by [ ]. [ may from time to time
render legal services to CFC and its affiliates].
S-26
<PAGE> 67
INDEX OF TERMS
<TABLE>
<S> <C>
Agreement........................................................................... S-3
APR................................................................................. S-13
Business Day........................................................................ S-4
CCC................................................................................. S-3
Cede................................................................................ S-2
Certificate Balance................................................................. S-3
Certificate Prepayment Amount....................................................... S-6
Certificate Prepayment Premium...................................................... S-6
Certificateholders.................................................................. S-4
Certificates........................................................................ S-3
CFC................................................................................. S-3
Chrysler............................................................................ S-10
Class A Certificate Balance......................................................... S-5
Class A Certificates................................................................ S-3
Class A Distributable Amount........................................................ S-22
Class A Interest Carryover Shortfall................................................ S-23
Class A Interest Distributable Amount............................................... S-22
Class A Pass Through-Rate........................................................... S-4
Class A Percentage.................................................................. S-3
Class A Principal Carryover Shortfall............................................... S-23
Class A Principal Distributable Amount.............................................. S-22
Class B Certificate Balance......................................................... S-5
Class B Certificates................................................................ S-3
Class B Distributable Amount........................................................ S-22
Class B Interest Carryover Shortfall................................................ S-23
Class B Interest Distributable Amount............................................... S-22
Class B Pass Through Rate........................................................... S-5
Class B Percentage.................................................................. S-3
Class B Principal Carryover Shortfall............................................... S-23
Class B Principal Distributable Amount.............................................. S-22
Closing Date........................................................................ S-3
Code................................................................................ S-25
Collection Account.................................................................. S-8
Collection Period................................................................... S-5
Commission.......................................................................... S-2
Company............................................................................. S-3
Cutoff Date......................................................................... S-3
Determination Date.................................................................. S-21
Distribution Date................................................................... S-4
DTC................................................................................. S-2
ERISA............................................................................... S-8
Exchange Act........................................................................ S-2
Federal Tax Counsel................................................................. S-8
Final Scheduled Distribution Date................................................... S-5
Final Scheduled Maturity Date....................................................... S-4
Financed Vehicles................................................................... S-3
Funding Period...................................................................... S-7
Initial Cutoff Date................................................................. S-3
Initial Pool Balance................................................................ S-6
Initial Receivables................................................................. S-3
Interest Distribution Amount........................................................ S-21
Issuer.............................................................................. S-3
</TABLE>
S-27
<PAGE> 68
<TABLE>
<S> <C>
Liquidated Receivables.............................................................. S-21
Liquidation Proceeds................................................................ S-21
Mandatory Repurchase................................................................ S-6
MMC................................................................................. S-11
Plan................................................................................ S-25
Pool Balance........................................................................ S-4
Pre Funded Amount................................................................... S-4
Pre-Funding Account................................................................. S-7
Principal Distribution Amount....................................................... S-5
Prospectus.......................................................................... S-2
Rating Agencies..................................................................... S-12
Realized Losses..................................................................... S-6
Receivables Pool.................................................................... S-13
Record Date......................................................................... S-4
Reserve Account Initial Deposit..................................................... S-7
Seller.............................................................................. S-3
Servicer............................................................................ S-3
SFAS................................................................................ S-10
Specified Reserve Account Balance................................................... S-7
Subsequent Cutoff Date.............................................................. S-4
Subsequent Receivables.............................................................. S-3
Subsequent Transfer Date............................................................ S-4
Total Distribution Amount........................................................... S-21
Trust............................................................................... S-3
Trustee............................................................................. S-3
Underwriters........................................................................ S-25
Underwriting Agreement.............................................................. S-25
</TABLE>
S-28
<PAGE> 69
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
OFFERED HEREBY, NOR AN OFFER OF THE SECURITIES IN ANY STATE OR JURISDICTION IN
WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-------
PROSPECTUS SUPPLEMENT
<S> <C>
Reports to Certificateholders.............. S-2
Summary of Terms........................... S-3
Special Considerations..................... S-9
The Trust.................................. S-12
The Receivables Pool....................... S-13
The Seller and the Servicer................ S-18
Weighted Average Life of the
Certificates............................. S-18
Description of the Certificates............ S-18
ERISA Considerations....................... S-25
Underwriting............................... S-25
Legal Opinions............................. S-26
Index of Terms............................. S-27
PROSPECTUS
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
Summary of Terms........................... 3
Special Considerations..................... 9
The Trusts................................. 11
The Receivables Pools...................... 13
Weighted Average Life of the Securities.... 15
Pool Factors and Trading Information....... 15
Use of Proceeds............................ 16
The Seller and the Servicer................ 16
Description of the Notes................... 17
Description of the Certificates............ 21
Certain Information Regarding the
Securities............................... 22
Description of the Transfer and Servicing
Agreements............................... 30
Certain Legal Aspects of the Receivables... 39
Certain Federal Income Tax Consequences.... 42
Certain State Tax Consequences with respect
to Trusts for which a Partnership
Election Is Made......................... 49
ERISA Considerations....................... 50
Plan of Distribution....................... 50
Legal Opinions............................. 51
Index of Terms............................. 52
------------------
</TABLE>
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN THE CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS SUPPLEMENT AND A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$
PREMIER AUTO TRUST 199 -
$
% ASSET BACKED CERTIFICATES,
CLASS A
$
% ASSET BACKED CERTIFICATES,
CLASS B
CHRYSLER FINANCIAL
CORPORATION
SELLER
CHRYSLER CREDIT
CORPORATION
SERVICER
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
, 199
------------------------------------------------------
------------------------------------------------------
<PAGE> 70
SUBJECT TO COMPLETION, DATED OCTOBER 5, 1994
PROSPECTUS
PREMIER AUTO TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
---------------------
CHRYSLER FINANCIAL CORPORATION
SELLER
CHRYSLER CREDIT CORPORATION
SERVICER
---------------------
The Asset Backed Notes (the "Notes") and the Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") described herein
may be sold from time to time in one or more series, in amounts, at prices and
on terms to be determined at the time of sale and to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement"). Each series of
Securities, which may include one or more classes of Notes and/or one or more
classes of Certificates, will be issued by a trust to be formed with respect to
such series (each, a "Trust"). Each Trust will be formed pursuant to either a
Trust Agreement to be entered into among Chrysler Financial Corporation, as
Seller (the "Seller"), a wholly owned subsidiary of the Seller specified in the
related Prospectus Supplement or a limited partnership specified therein of
which such subsidiary is the general partner and the Seller is the limited
partner (the "Company"), and the Trustee specified in the related Prospectus
Supplement (the "Trustee") or a Pooling and Servicing Agreement to be entered
into among the Trustee, the Seller and Chrysler Credit Corporation, as Servicer
(the "Servicer"). If a series of Securities includes Notes, such Notes of a
series will be issued and secured pursuant to an Indenture between the Trust and
the Indenture Trustee specified in the related Prospectus Supplement (the
"Indenture Trustee") and will represent indebtedness of the related Trust. The
Certificates of a series will represent fractional undivided interests in the
related Trust. The related Prospectus Supplement will specify which class or
classes of Notes, if any, and which class or classes of Certificates, if any, of
the related series are being offered thereby. The property of each Trust will
include a pool of motor vehicle retail installment sale contracts secured by new
or used automobiles and light duty trucks (the "Receivables"), certain monies
due or received thereunder on and after the applicable Cutoff Date set forth in
the related Prospectus Supplement, security interests in the vehicles financed
thereby and certain other property, all as described herein and in the related
Prospectus Supplement. In addition, if so specified in the related Prospectus
Supplement, the property of the Trust will include monies on deposit in a trust
account (the "Pre-Funding Account") to be established with the Indenture
Trustee, which will be used to purchase additional motor vehicle retail
installment sale contracts (the "Subsequent Receivables") from the Seller from
time to time during the Funding Period specified in the related Prospectus
Supplement.
Except as otherwise provided in the related Prospectus Supplement, each
class of Securities of any series will represent the right to receive a
specified amount of payments of principal and interest on the related
Receivables, at the rates, on the dates and in the manner described herein and
in the related Prospectus Supplement. If a series includes multiple classes of
Securities, the rights of one or more classes of Securities to receive payments
may be senior or subordinate to the rights of one or more of the other classes
of such series. Distributions on Certificates of a series may be subordinated in
priority to payments due on any related Notes to the extent described herein and
in the related Prospectus Supplement. A series may include one or more classes
of Notes and/or Certificates which differ as to the timing and priority of
payment, interest rate or amount of distributions in respect of principal or
interest or both. A series may include one or more classes of Notes or
Certificates entitled to distributions in respect of principal with
disproportionate, nominal or no interest distributions, or to interest
distributions, with disproportionate, nominal or no distributions in respect of
principal. The rate of payment in respect of principal of any class of Notes and
distributions in respect of the Certificate Balance of the Certificates of any
class will depend on the priority of payment of such class and the rate and
timing of payments (including prepayments, defaults, liquidations and
repurchases of Receivables) on the related Receivables. A rate of payment lower
or higher than that anticipated may affect the weighted average life of each
class of Securities in the manner described herein and in the related Prospectus
Supplement.
EXCEPT AS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS SUPPLEMENT, ANY
NOTES OF A SERIES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES OF A SERIES
REPRESENT BENEFICIAL INTERESTS IN, THE RELATED TRUST ONLY AND DO NOT REPRESENT
OBLIGATIONS OF OR INTERESTS IN, AND ARE NOT GUARANTEED OR INSURED BY, CHRYSLER
FINANCIAL CORPORATION, CHRYSLER CREDIT CORPORATION, THE APPLICABLE COMPANY OR
ANY OF THEIR RESPECTIVE AFFILIATES. PROSPECTIVE INVESTORS SHOULD CONSIDER THE
FACTORS SET FORTH UNDER "SPECIAL CONSIDERATIONS" HEREIN AND IN THE RELATED
PROSPECTUS SUPPLEMENT.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Retain this Prospectus for future reference. This Prospectus may not be
used to consummate sales
of Securities offered hereby unless accompanied by a Prospectus Supplement.
---------------------
The date of this Prospectus is October , 199 .
<PAGE> 71
AVAILABLE INFORMATION
The Seller, as originator of each Trust, has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement (together with
all amendments and exhibits thereto, referred to herein as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Notes and the Certificates offered pursuant to this
Prospectus. For further information, reference is made to the Registration
Statement which may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
and at the Commission's regional offices at Northwestern Atrium Center, 500 West
Madison Street, 14th Floor, Chicago, Illinois 60661 and Seven World Trade
Center, New York, New York 10048. Copies of the Registration Statement may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Seller, as originator of any Trust, pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this Prospectus and prior to the termination
of the offering of the Securities shall be deemed to be incorporated by
reference in this Prospectus. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Seller will provide without charge to each person, including any
beneficial owner of Securities, to whom a copy of this Prospectus is delivered,
on the written or oral request of any such person, a copy of any or all of the
documents incorporated herein or in any related Prospectus Supplement by
reference, except the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Secretary, Chrysler Financial Corporation, 27777
Franklin Road, Southfield, Michigan 48034-8286 (Telephone: 810-948-3060).
2
<PAGE> 72
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Securities of any series contained in the
related Prospectus Supplement to be prepared and delivered in connection with
the offering of such Securities. Certain capitalized terms used in this summary
are defined elsewhere in this Prospectus on the pages indicated in the "Index of
Terms".
<TABLE>
<S> <C>
Issuer................. With respect to each series of Securities, the Trust to be formed
pursuant to either a Trust Agreement (as amended and supplemented
from time to time, a "Trust Agreement") among the Seller, the
Company for such Trust and the Trustee for such Trust (the "Trust"
or the "Issuer") or a Pooling and Servicing Agreement (as amended
and supplemented from time to time, the "Pooling and Servicing
Agreement") among the Trustee, the Seller and Chrysler Credit
Corporation, as Servicer (the "Servicer").
Seller................. Chrysler Financial Corporation (the "Seller").
Servicer............... Chrysler Credit Corporation (the "Servicer" or "CCC").
Trustee................ With respect to each series of Securities, the Trustee specified in
the related Prospectus Supplement.
Indenture Trustee...... With respect to any applicable series of Securities, the Indenture
Trustee specified in the related Prospectus Supplement.
The Notes.............. A series of Securities may include one or more classes of Notes,
which will be issued pursuant to an Indenture between the Trust and
the Indenture Trustee (as amended and supplemented from time to
time, an "Indenture"). The related Prospectus Supplement will
specify which class or classes, if any, of Notes of the related
series are being offered thereby.
Unless otherwise specified in the related Prospectus Supplement,
Notes will be available for purchase in denominations of $1,000 and
integral multiples thereof and will be available in book-entry form
only. Unless otherwise specified in the related Prospectus
Supplement, Noteholders will be able to receive Definitive Notes
only in the limited circumstances described herein or in the related
Prospectus Supplement. See "Certain Information Regarding the
Securities -- Definitive Securities".
Unless otherwise specified in the related Prospectus Supplement,
each class of Notes will have a stated principal amount and will
bear interest at a specified rate or rates (with respect to each
class of Notes, the "Interest Rate"). Each class of Notes may have a
different Interest Rate, which may be a fixed, variable or
adjustable Interest Rate, or any combination of the foregoing. The
related Prospectus Supplement will specify the Interest Rate for
each class of Notes, or the method for determining the Interest
Rate.
With respect to a series that includes two or more classes of Notes,
each class may differ as to the timing and priority of payments,
seniority, allocations of losses, Interest Rate or amount of
payments of principal or interest, or payments of principal or
interest in respect of any such class or classes may or may not be
made upon the occurrence of specified events or on the basis of
collections from designated portions of the Receivables Pool.
In addition, a series may include one or more classes of Notes
("Strip Notes") entitled to (i) principal payments with
disproportionate, nominal or no interest
</TABLE>
3
<PAGE> 73
<TABLE>
<S> <C>
payments or (ii) interest payments with disproportionate, nominal or
no principal payments.
If the Servicer exercises its option to purchase the Receivables of
a Trust (or, if not, and if and to the extent provided in the
related Prospectus Supplement, if satisfactory bids for the purchase
of such Receivables are received), in the manner and on the
respective terms and conditions described under "Description of the
Transfer and Servicing Agreements -- Termination", the outstanding
Notes will be redeemed as set forth in the related Prospectus
Supplement. In addition, if the related Prospectus Supplement
provides that the property of a Trust will include a Pre-Funding
Account (as such term is defined in the related Prospectus
Supplement, the "Pre-Funding Account"), one or more classes of the
outstanding Notes will be subject to partial redemption on or
immediately following the end of the Funding Period (as such term is
defined in the related Prospectus Supplement, the "Funding Period")
in an amount and manner specified in the related Prospectus
Supplement. In the event of such partial redemption, the Noteholders
may be entitled to receive a prepayment premium from the Trust, in
the amount and to the extent provided in the related Prospectus
Supplement.
The Certificates....... A series may include one or more classes of Certificates and may not
include any Notes. The related Prospectus Supplement will specify
which class or classes, if any, of the Certificates are being
offered thereby.
Unless otherwise specified in the related Prospectus Supplement,
Certificates will be available for purchase in a minimum
denomination of $20,000 and in integral multiples of $1,000 in
excess thereof and will be available in book-entry form only. Unless
otherwise specified in the related Prospectus Supplement, Certifi-
cateholders will be able to receive Definitive Certificates only in
the limited circumstances described herein or in the related
Prospectus Supplement. See "Certain Information Regarding the
Securities -- Definitive Securities".
Unless otherwise specified in the related Prospectus Supplement,
each class of Certificates will have a stated Certificate Balance
specified in the related Prospectus Supplement (the "Certificate
Balance") and will accrue interest on such Certificate Balance at a
specified rate (with respect to each class of Certificates, the
"Pass Through Rate"). Each class of Certificates may have a
different Pass Through Rate, which may be a fixed, variable or
adjustable Pass Through Rate, or any combination of the foregoing.
The related Prospectus Supplement will specify the Pass Through Rate
for each class of Certificates or the method for determining the
Pass Through Rate.
With respect to a series that includes two or more classes of
Certificates, each class may differ as to timing and priority of
distributions, seniority, allocations of losses, Pass Through Rate
or amount of distributions in respect of principal or interest, or
distributions in respect of principal or interest in respect of any
such class or classes may or may not be made upon the occurrence of
specified events or on the basis of collections from designated
portions of the Receivables Pool. In addition, a series may include
one or more classes of Certificates ("Strip Certificates") entitled
to (i) distributions in respect of principal with disproportionate,
nominal or no interest distributions or (ii) interest distributions
with disproportionate, nominal or no distributions in respect of
principal.
If a series of securities includes classes of Notes, distributions
in respect of the Certificates may be subordinated in priority of
payment to payments on the Notes to the extent specified in the
related Prospectus Supplement.
</TABLE>
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<PAGE> 74
<TABLE>
<S> <C>
If the Servicer exercises its option to purchase the Receivables of
a Trust (or, if not, and if and to the extent provided in the
related Prospectus Supplement, satisfactory bids for the purchase of
such Receivables are received), in the manner and on the respective
terms and conditions described under "Description of the Transfer
and Servicing Agreements -- Termination", Certificateholders will
receive as a prepayment an amount in respect of the Certificates as
specified in the related Prospectus Supplement. In addition, if the
related Prospectus Supplement provides that the property of a Trust
will include a Pre-Funding Account, Certificateholders may receive a
partial prepayment of principal on or immediately following the end
of the Funding Period in an amount and manner specified in the
related Prospectus Supplement. In the event of such partial
prepayment, the Certificateholders may be entitled to receive a
prepayment premium from the Trust, in the amount and to the extent
provided in the related Prospectus Supplement.
The Trust Property..... The property of each Trust will include a pool of motor vehicle
retail installment sale contracts secured by new or used automobiles
or light duty trucks (the "Receivables"), including rights to
receive certain payments made with respect to such Receivables,
security interests in the vehicles financed thereby (the "Financed
Vehicles"), certain accounts and the proceeds thereof and any
proceeds from claims on certain related insurance policies. On the
Closing Date specified in the related Prospectus Supplement with
respect to a Trust, the Seller will, if so specified in such
Prospectus Supplement, sell or transfer Receivables (the "Initial
Receivables") having an aggregate principal balance specified in the
related Prospectus Supplement as of the dates specified therein (the
"Initial Cutoff Date") to such Trust pursuant to either a Sale and
Servicing Agreement among the Seller, the Servicer and the Trust (as
amended and supplemented from time to time, a "Sale and Servicing
Agreement") or, if the Trust is to be treated as a grantor trust for
federal income tax purposes, the related Pooling and Servicing
Agreement among the Seller, the Servicer and the Trustee. A Prospec-
tus Supplement may specify that there will not be any Initial
Receivables sold to the Trust on the Closing Date and that all
Receivables will be sold to the Trust during the Funding Period
(which may include the Closing Date) as described below. The
property of each Trust will also include amounts on deposit in
certain trust accounts, including the related Collection Account,
any Pre-Funding Account, any Reserve Account and any other account
identified in the applicable Prospectus Supplement.
To the extent provided in the related Prospectus Supplement, the
Seller will be obligated (subject only to the availability thereof)
to sell, and the related Trust will be obligated to purchase
(subject to the satisfaction of certain conditions described in the
applicable Sale and Servicing Agreement or Pooling and Servicing
Agreement), additional Receivables (the "Subsequent Receivables")
from time to time (as frequently as daily) during the Funding Period
specified in the related Prospectus Supplement having an aggregate
principal balance approximately equal to the amount on deposit in
the Pre-Funding Account (the "Pre-Funded Amount") on such Closing
Date.
The Receivables arise or will arise from loans originated by motor
vehicle dealers (the "Dealers") and purchased by CCC pursuant to
agreements with the Dealers for subsequent sale to the Seller. The
Receivables for any given Receivables Pool will be selected from the
contracts owned by the Seller based on the criteria specified in the
Sale and Servicing Agreement or Pooling and Servicing Agree-
</TABLE>
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<PAGE> 75
<TABLE>
<S> <C>
ment, as applicable, and described herein and in the related
Prospectus Supplement.
Credit and Cash Flow
Enhancement............ If and to the extent specified in the related Prospectus Supplement,
credit enhancement with respect to a Trust or any class or classes
of Securities may include any one or more of the following:
subordination of one or more other classes of Securities, a Reserve
Account, over-collateralization, letters of credit, credit or
liquidity facilities, surety bonds, guaranteed investment contracts,
swaps or other interest rate protection agreements, repurchase
obligations, yield supplement agreements, other agreements with
respect to third party payments or other support, cash deposits or
other arrangements. Unless otherwise specified in the related
Prospectus Supplement, any form of credit enhancement will have
certain limitations and exclusions from coverage thereunder, which
will be described in the related Prospectus Supplement.
Reserve Account........ Unless otherwise specified in the related Prospectus Supplement, a
Reserve Account will be created for each Trust with an initial
deposit by the Seller of cash or certain investments having a value
equal to the amount specified in the related Prospectus Supplement.
To the extent specified in the related Prospectus Supplement, funds
in the Reserve Account will thereafter be supplemented by the
deposit of amounts remaining on any Distribution Date or Payment
Date after making all other distributions required on such date and
any amounts deposited from time to time from the Pre-Funding Account
in connection with a purchase of Subsequent Receivables. Amounts in
the Reserve Account will be available to cover shortfalls in amounts
due to the holders of those classes of Securities specified in the
related Prospectus Supplement in the manner and under the
circumstances specified therein. The related Prospectus Supplement
will also specify to whom and the manner and circumstances under
which amounts on deposit in the Reserve Account (after giving effect
to all other required distributions to be made by the applicable
Trust) in excess of the Specified Reserve Account Balance (as
defined in the related Prospectus Supplement) will be distributed.
Transfer and Servicing
Agreements............. With respect to each Trust, the Seller will sell the related
Receivables to such Trust pursuant to a Sale and Servicing Agreement
or a Pooling and Servicing Agreement. The rights and benefits of any
Trust under a Sale and Servicing Agreement will be assigned to the
Indenture Trustee as collateral for the Notes of the related series.
The Servicer will agree with such Trust to be responsible for
servicing, managing, maintaining custody of and making collections
on the Receivables. CCC will undertake certain administrative duties
under an Administration Agreement with respect to any Trust that has
issued Notes.
Unless otherwise specified in the related Prospectus Supplement, the
Servicer will advance scheduled payments under each Precomputed
Receivable which shall not have been timely made (a "Precomputed
Advance"), to the extent that the Servicer, in its sole discretion,
expects to recoup the Precomputed Advance from subsequent payments
on or with respect to such Receivable or from other Precomputed
Receivables. With respect to Simple Interest Receivables, the
Servicer shall advance any interest shortfall (a "Simple Interest
Advance" and, together with a Precomputed Advance, an "Advance").
The Servicer shall be entitled to reimbursement of Advances from
subsequent payments on or with respect to the Receivables to the
extent described herein and in the related Prospectus Supplement.
</TABLE>
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<PAGE> 76
<TABLE>
<S> <C>
Unless otherwise provided in the related Prospectus Supplement, the
Seller will be obligated to repurchase any Receivable if the
interest of the applicable Trust in such Receivable is materially
adversely affected by a breach of any representation or warranty
made by the Seller with respect to the Receivable, if the breach has
not been cured following the discovery by or notice to the Seller of
the breach.
Unless otherwise provided in the related Prospectus Supplement, the
Servicer will be obligated to purchase or make Advances with respect
to any Receivable if, among other things, it extends the date for
final payment by the Obligor of such Receivable beyond the
applicable Final Scheduled Maturity Date (as defined in the related
Prospectus Supplement, the "Final Scheduled Maturity Date"), changes
the annual percentage rate ("APR") or amount of a scheduled payment
of such Receivable or fails to maintain a perfected security
interest in the related Financed Vehicle.
Unless otherwise specified in the related Prospectus Supplement, the
Servicer will be entitled to receive a fee for servicing the
Receivables of each Trust equal to a specified percentage of the
aggregate principal balance of the related Receivables Pool, as set
forth in the related Prospectus Supplement, plus certain late fees,
prepayment charges and other administrative fees or similar charges.
See "Description of the Transfer and Servicing
Agreements -- Servicing Compensation and Payment of Expenses" herein
and in the related Prospectus Supplement.
Certain Legal Aspects
of the Receivables;
Repurchase
Obligations............ In connection with the sale of Receivables to a Trust, security
interests in the Financed Vehicles securing such Receivables will be
assigned by the Seller to such Trust. Due to administrative burden
and expense, the certificates of title to the Financed Vehicles will
not be amended to reflect the assignment to such Trust. In the
absence of such an amendment, such Trust may not have a perfected
security interest in the Financed Vehicles securing the Receivables
in some states. Unless otherwise specified in the related Prospectus
Supplement, the Seller will be obligated to repurchase any
Receivable sold to a Trust as to which a first perfected security
interest in the name of the Seller in the Financed Vehicle securing
such Receivable shall not exist as of the date such Receivable is
purchased by such Trust, if such breach shall materially adversely
affect the interest of such Trust in such Receivable and if such
failure or breach shall not have been cured by the last day of the
second (or, if the Seller elects, the first) month following the
discovery by or notice to the Seller of such breach. If such Trust
does not have a perfected security interest in a Financed Vehicle,
its ability to realize on such Financed Vehicle in the event of a
default may be adversely affected. To the extent the security
interest is perfected, such Trust will have a prior claim over
subsequent purchasers of such Financed Vehicles and holders of
subsequently perfected security interests. However, as against liens
for repairs of Financed Vehicles or for taxes unpaid by an Obligor
under a Receivable, or because of fraud or negligence, such Trust
could lose the priority of its security interest or its security
interest in Financed Vehicles. Neither the Seller nor the Servicer
will have any obligation to repurchase a Receivable as to which any
of the aforementioned occurrences result in a Trust's losing the
priority of its security interest or its security interest in such
Financed Vehicle after the Closing Date.
</TABLE>
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<TABLE>
<S> <C>
Federal and state consumer protection laws impose requirements upon
creditors in connection with extensions of credit and collections of
retail installment loans, and certain of these laws make an assignee
of such a loan liable to the obligor thereon for any violation by
the lender. Unless otherwise specified in the related Prospectus
Supplement, the Seller will be obligated to repurchase any Receiva-
ble which fails to comply with such requirements.
Tax Status............. Unless the Prospectus Supplement specifies that the related Trust
will be treated as a grantor trust and, except as otherwise provided
in such Prospectus Supplement, upon the issuance of the related
series of Securities (a) Federal Tax Counsel to such Trust will
deliver an opinion to the effect that, for federal income tax
purposes: (i) any Notes of such series will be characterized as debt
and (ii) such Trust will not be characterized as an association (or
a publicly traded partnership) taxable as a corporation and (b)
Michigan Tax Counsel to such Trust will deliver an opinion to the
effect that the same characterizations would apply for Michigan
income and single business tax purposes as for federal income tax
purposes. In respect of any such series, each Noteholder, if any, by
the acceptance of a Note of such series, will agree to treat such
Note as indebtedness, and each Certificateholder, by the acceptance
of a Certificate of such series, will agree to treat such Trust as a
partnership in which such Certificateholder is a partner for federal
income and Michigan income and single business tax purposes.
Alternative characterizations of such Trust and such Certificates
are possible, but would not result in materially adverse tax
consequences to Certificateholders.
If the Prospectus Supplement specifies that the related Trust will
be treated as a grantor trust and except as otherwise provided in
such Prospectus Supplement, upon the issuance of the related series
of Certificates, Federal Tax Counsel to such Trust will deliver an
opinion to the effect that such Trust will be treated as a grantor
trust for federal income tax purposes and will not be subject to
federal income tax.
See "Certain Federal Income Tax Consequences" and "Certain State Tax
Consequences" for additional information concerning the application
of federal and Michigan tax laws.
ERISA Considerations... Subject to the considerations discussed under "ERISA Considerations"
herein and in the related Prospectus Supplement, and unless
otherwise specified therein, any Notes of a series and any
Certificates that are issued by a Trust that is a grantor trust and
are not subordinated to any other class of Certificates are eligible
for purchase by employee benefit plans.
Unless otherwise specified in the related Prospectus Supplement, the
Certificates of any series that are subordinated to any other
Security of that series may not be acquired by any employee benefit
plan subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or by any individual retirement account. See
"ERISA Considerations" herein and in the related Prospectus
Supplement.
</TABLE>
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<PAGE> 78
SPECIAL CONSIDERATIONS
Certain Legal Aspects -- Security Interests in Financed Vehicles. In
connection with the sale of Receivables to a Trust, security interests in the
Financed Vehicles securing such Receivables will be assigned by the Seller to
such Trust simultaneously with the sale of such Receivables to such Trust. Due
to administrative burden and expense, the certificates of title to the Financed
Vehicles will not be amended to reflect the assignment to the Trust. In the
absence of such an amendment, such Trust may not have a perfected security
interest in the Financed Vehicles securing the Receivables in some states.
Unless otherwise provided in the related Prospectus Supplement, the Seller will
be obligated to repurchase any Receivable sold to such Trust as to which a
perfected security interest in the name of the Seller in the Financed Vehicle
securing such Receivable shall not exist as of the date such Receivable is
transferred to such Trust, if such breach shall materially adversely affect the
interest of such Trust in such Receivable and if such failure or breach shall
not have been cured by the last day of the second (or, if the Seller elects, the
first) month following the discovery by or notice to the Seller of such breach.
If such Trust does not have a perfected security interest in a Financed Vehicle,
its ability to realize on such Financed Vehicle in the event of a default may be
adversely affected. To the extent the security interest is perfected, such Trust
will have a prior claim over subsequent purchasers of such Financed Vehicles and
holders of subsequently perfected security interests. However, as against liens
for repairs of Financed Vehicles or for taxes unpaid by an Obligor under a
Receivable, or through fraud or negligence, such Trust could lose the priority
of its security interest or its security interest in a Financed Vehicle. Neither
the Seller nor the Servicer will have any obligation to repurchase a Receivable
as to which any of the aforementioned occurrences result in such Trust's losing
the priority of its security interest or its security interest in such Financed
Vehicle after the date such security interest was conveyed to such Trust.
Federal and state consumer protection laws impose requirements upon creditors in
connection with extensions of credit and collections of retail installment loans
and certain of these laws make an assignee of such a loan (such as such Trust)
liable to the obligor thereon for any violation by the lender. Unless otherwise
specified in the related Prospectus Supplement, the Seller will be obligated to
repurchase any Receivable which fails to comply with such requirements.
Certain Legal Aspects -- Bankruptcy Considerations. The Seller will
warrant to each Trust in the related Sale and Servicing Agreement or Pooling and
Servicing Agreement that the sale of the Receivables by the Seller to such Trust
is a valid sale of the Receivables to such Trust. Notwithstanding the foregoing,
if the Seller were to become a debtor in a bankruptcy case and a creditor or
trustee-in-bankruptcy of such debtor or such debtor itself were to take the
position that the sale of Receivables to such Trust should instead be treated as
a pledge of such Receivables to secure a borrowing of such debtor, delays in
payments of collections of Receivables to the related Securityholders could
occur or (should the court rule in favor of any such trustee, debtor or
creditor) reductions in the amounts of such payments could result. If the
transfer of Receivables to a Trust is treated as a pledge instead of a sale, a
tax or government lien on the property of the Seller arising before the transfer
of a Receivable to such Trust may have priority over such Trust's interest in
such Receivable. If the transactions contemplated herein are treated as a sale,
the Receivables would not be part of the Seller's bankruptcy estate and would
not be available to the Seller's creditors.
In a recent case decided by the U.S. Court of Appeals for the Tenth
Circuit, Octagon Gas System, Inc. v. Rimmer, the court determined that
"accounts," a defined term under the Uniform Commercial Code, would be included
in the bankruptcy estate of a transferor regardless of whether the transfer is
treated as a sale or a secured loan. Although the Receivables are likely to be
viewed as "chattel paper," as defined under the Uniform Commercial Code, rather
than as accounts, the Octagon holding is equally applicable to chattel paper.
The circumstances under which the Octagon ruling would apply are not fully known
and the extent to which the Octagon decision will be followed in other courts or
outside of the Tenth Circuit is not certain. If the holding in the Octagon case
were applied in a bankruptcy of the Seller, however, even if the transfer of
Receivables to the Trust were treated as a sale, the Receivables would be part
of the Seller's bankruptcy estate and would be subject to claims of certain
creditors, and delays and reductions in payments to the Securityholders could
result.
With respect to each Trust that is not a grantor trust, if an Insolvency
Event with respect to the Company (which will be, unless otherwise specified in
the related Prospectus Supplement, a wholly owned subsidiary of
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<PAGE> 79
the Seller or a limited partnership of which such subsidiary is the general
partner and the Seller is the limited partner, as set forth in such Prospectus
Supplement), the Indenture Trustee or Trustee for such Trust will promptly sell,
dispose of or otherwise liquidate the related Receivables in a commercially
reasonable manner on commercially reasonable terms, except under certain limited
circumstances. The proceeds from any such sale, disposition or liquidation of
Receivables will be treated as collections on the Receivables and deposited in
the Collection Account of such Trust. If the proceeds from the liquidation of
the Receivables and any amounts on deposit in the Reserve Account, the Note
Distribution Account, if any, and the Certificate Distribution Account with
respect to any such Trust and any amounts available from any credit enhancement
are not sufficient to pay any Notes and the Certificates of the related series
in full, the amount of principal returned to any Noteholders or the
Certificateholders will be reduced and such Noteholders and Certificateholders
will incur a loss. See "Description of the Transfer and Servicing
Agreements -- Insolvency Event".
Trust's Relationship to the Seller, Chrysler Credit Corporation and their
Affiliates. None of the Seller, CCC or Chrysler Corporation ("Chrysler") or
their affiliates is generally obligated to make any payments in respect of any
Notes, the Certificates or the Receivables of a given Trust.
However, in connection with the sale of Receivables by the Seller to a
given Trust, the Seller will make representations and warranties with respect to
the characteristics of such Receivables and, in certain circumstances, the
Seller may be required to repurchase Receivables with respect to which such
representations and warranties have been breached. See "Description of the
Transfer and Servicing Agreements -- Sale and Assignment of Receivables". In
addition, under certain circumstances, the Servicer may be required to purchase
Receivables. See "Description of the Transfer and Servicing
Agreements -- Servicing Procedures". Moreover, if CCC were to cease acting as
Servicer, delays in processing payments on the Receivables and information in
respect thereof could occur and result in delays in payments to the
Securityholders.
The related Prospectus Supplement may set forth certain additional
information regarding the Seller, CCC and Chrysler. In addition, the Seller and
Chrysler are subject to the information requirements of the Exchange Act and in
accordance therewith file reports and other information with the Commission. For
further information regarding the Seller and Chrysler, reference is made to such
reports and other information, which are available as described under "Available
Information".
Subordination; Limited Assets. To the extent specified in the related
Prospectus Supplement, distributions of interest and principal on one or more
classes of Certificates of a series may be subordinated in priority of payment
to interest and principal due on the Notes, if any, of such series or one or
more other classes of Certificates of such series. Moreover, each Trust will not
have, nor is it permitted or expected to have, any significant assets or sources
of funds other than the Receivables and, to the extent provided in the related
Prospectus Supplement, a Pre-Funding Account, a Reserve Account and any other
credit enhancement. The Notes of any series will represent obligations solely
of, and the Certificates of any series will represent interests solely in, the
related Trust and neither the Notes nor the Certificates of any series will be
insured or guaranteed by the Seller, the Servicer, the applicable Trustee, any
Indenture Trustee or any other person or entity. Consequently, holders of the
Securities of any series must rely for repayment upon payments on the related
Receivables and, if and to the extent available, amounts on deposit in the
Pre-Funding Account (if any), the Reserve Account (if any) and any other credit
enhancement, all as specified in the related Prospectus Supplement.
Maturity and Prepayment Considerations. All the Receivables are prepayable
at any time. (For this purpose the term "prepayments" includes prepayments in
full, partial prepayments (including those related to rebates of extended
warranty contract costs and insurance premiums) and liquidations due to default,
as well as receipts of proceeds from physical damage, credit life and disability
insurance policies and certain other Receivables repurchased for administrative
reasons.) The rate of prepayments on the Receivables may be influenced by a
variety of economic, social and other factors, including the fact that an
Obligor generally may not sell or transfer the Financed Vehicle securing a
Receivable without the consent of the Seller. The rate of prepayment on the
Receivables may also be influenced by the structure of the loan. In addition,
under certain circumstances, the Seller will be obligated to repurchase
Receivables pursuant to a Sale and Servicing Agreement or Pooling and Servicing
Agreement as a result of breaches of representations and warranties and,
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under certain circumstances, the Servicer will be obligated to purchase
Receivables pursuant to such Sale and Servicing Agreement or Pooling and
Servicing Agreement as a result of breaches of certain covenants. See
"Description of the Transfer and Servicing Agreements -- Sale and Assignment of
Receivables". Any reinvestment risks resulting from a faster or slower incidence
of prepayment of Receivables held by a given Trust will be borne entirely by the
Securityholders of the related series of Securities. See also "Description of
the Transfer and Servicing Agreements -- Termination" regarding the Servicer's
option to purchase the Receivables of a given Receivables Pool and
"-- Insolvency Event" regarding the sale of the Receivables owned by a Trust
that is not a grantor trust if an Insolvency Event with respect to the
applicable Company occurs.
Risk of Commingling. With respect to each Trust, the Servicer will deposit
all payments on the related Receivables (from whatever source) and all proceeds
of such Receivables collected during each Collection Period into the Collection
Account of such Trust within two business days of receipt thereof. However, in
the event that CCC satisfies certain requirements for monthly or less frequent
remittances and the Rating Agencies (as such term is defined in the related
Prospectus Supplement, the "Rating Agencies") affirm their ratings of the
related Securities at the initial level, then for so long as CCC is the Servicer
and provided that (i) there exists no Servicer Default and (ii) each other
condition to making such monthly or less frequent deposits as may be specified
by the Rating Agencies and described in the related Prospectus Supplement is
satisfied, the Servicer will not be required to deposit such amounts into the
Collection Account of such Trust until on or before the business day preceding
each Distribution Date. The Servicer will deposit the aggregate Purchase Amount
of Receivables purchased by the Servicer into the applicable Collection Account
on or before the business day preceding each Distribution Date. Pending deposit
into such Collection Account, collections may be invested by the Servicer at its
own risk and for its own benefit and will not be segregated from funds of the
Servicer. If the Servicer were unable to remit such funds, the applicable
Securityholders might incur a loss. To the extent set forth in the related
Prospectus Supplement, the Servicer may, in order to satisfy the requirements
described above, obtain a letter of credit or other security for the benefit of
the related Trust to secure timely remittances of collections on the related
Receivables and payment of the aggregate Purchase Amount with respect to
Receivables purchased by the Servicer.
Servicer Default. Unless otherwise provided in the related Prospectus
Supplement with respect to a series of Securities that includes Notes, in the
event a Servicer Default occurs, the Indenture Trustee or the Noteholders with
respect to such series, as described under "Description of the Transfer and
Servicing Agreements -- Rights upon Servicer Default", may remove the Servicer
without the consent of the Trustee or any of the Certificateholders with respect
to such series. The Trustee or the Certificateholders with respect to such
series will not have the ability to remove the Servicer if a Servicer Default
occurs. In addition, the Noteholders of such series have the ability, with
certain specified exceptions, to waive defaults by the Servicer, including
defaults that could materially adversely affect the Certificateholders of such
series. See "Description of the Transfer and Servicing Agreements -- Waiver of
Past Defaults".
Book-Entry Registration. Unless otherwise specified in the related
Prospectus Supplement, each class of Securities of a given series will be
initially represented by one or more certificates registered in the name of Cede
& Co. ("Cede"), or any other nominee for DTC set forth in the related Prospectus
Supplement (Cede, or such other nominee, "DTC's Nominee"), and will not be
registered in the names of the holders of the Securities of such series or their
nominees. Because of this, unless and until Definitive Securities for such
series are issued, holders of such Securities will not be recognized by the
Trustee or any applicable Indenture Trustee as "Certificateholders",
"Noteholders" or "Securityholders", as the case may be (as such terms are used
herein or in the related Pooling and Servicing Agreement or related Indenture
and Trust Agreement, as applicable). Hence, until Definitive Securities are
issued, holders of such Securities will only be able to exercise the rights of
Securityholders indirectly through DTC and its participating organizations. See
"Certain Information Regarding the Securities -- Book-Entry Registration" and
"-- Definitive Securities".
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THE TRUSTS
With respect to each series of Securities, the Seller will establish a
separate Trust pursuant to the respective Trust Agreement or Pooling and
Servicing Agreement, as applicable, for the transactions described herein and in
the related Prospectus Supplement. The property of each Trust will include a
pool (a "Receivables Pool") of motor vehicle retail installment sales contracts
(and, with respect to Fixed Value Receivables (as defined below), the right to
certain payments on retail installment sale contracts) between dealers (the
"Dealers") and purchasers (the "Obligors") of new and used automobiles or light
duty trucks and all payments due thereunder on and after the applicable Cutoff
Date (as such term is defined in the related Prospectus Supplement, a "Cutoff
Date") in the case of Precomputed Receivables and all payments received
thereunder on and after the applicable Cutoff Date in the case of Simple
Interest Receivables. The Receivables of each Receivables Pool were or will be
originated by the Dealers and purchased by CCC pursuant to agreements with
Dealers ("Dealer Agreements") for subsequent sale to the Seller. Such
Receivables will continue to be serviced by the Servicer and evidence indirect
financing made available by the Seller to the Obligors. On the applicable
Closing Date, after the issuance of the Certificates and any Notes of a given
series, the Seller will sell the Initial Receivables of the applicable
Receivables Pool to the Trust to the extent, if any, specified in the related
Prospectus Supplement. To the extent so provided in the related Prospectus
Supplement, Subsequent Receivables will be conveyed to the Trust as frequently
as daily during the Funding Period. Any Subsequent Receivables so conveyed will
also be assets of the applicable Trust, subject to the prior rights of the
related Indenture Trustee and the Noteholders, if any, therein. The property of
each Trust will also include (i) such amounts as from time to time may be held
in separate trust accounts established and maintained pursuant to the related
Sale and Servicing Agreement or Pooling and Servicing Agreement and the proceeds
of such accounts, as described herein and in the related Prospectus Supplement;
(ii) security interests in the Financed Vehicles and any other interest of the
Seller in such Financed Vehicles; (iii) the rights to proceeds from claims on
certain physical damage, credit life and disability insurance policies covering
the Financed Vehicles or the Obligors, as the case may be; (iv) the interest of
the Seller in any proceeds from recourse to Dealers on Receivables or Financed
Vehicles with respect to which the Servicer has determined that eventual
repayment in full is unlikely; (v) any property that shall have secured a
Receivable and that shall have been acquired by the applicable Trust; and (vi)
any and all proceeds of the foregoing. To the extent specified in the related
Prospectus Supplement, a Pre-Funding Account, a Reserve Account or other form of
credit enhancement may be a part of the property of any given Trust or may be
held by the Trustee or an Indenture Trustee for the benefit of holders of the
related Securities. Additionally, pursuant to contracts between the Servicer and
the Dealers, the Dealers have an obligation after origination to repurchase
Receivables as to which Dealers have made certain misrepresentations.
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "Description of the Transfer and
Servicing Agreements -- Servicing Compensation and Payment of Expenses" herein
and in the related Prospectus Supplement. To facilitate the servicing of the
Receivables, the Seller and each Trustee will authorize the Servicer to retain
physical possession of the Receivables held by each Trust and other documents
relating thereto as custodian for each such Trust. Due to the administrative
burden and expense, the certificates of title to the Financed Vehicles will not
be amended to reflect the sale and assignment of the security interest in the
Financed Vehicles to each Trust. In the absence of such an amendment, any Trust
may not have a perfected security interest in the Financed Vehicles in all
states. See "Certain Legal Aspects of the Receivables" and "Description of the
Transfer and Servicing Agreements -- Sale and Assignment of Receivables".
If the protection provided to any Noteholders of a given series by the
subordination of the related Certificates and by the Reserve Account, if any, or
other credit enhancement for such series or the protection provided to
Certificateholders by any such Reserve Account or other credit enhancement is
insufficient, such Noteholders or Certificateholders, as the case may be, would
have to look principally to the Obligors on the related Receivables, the
proceeds from the repossession and sale of Financed Vehicles which secure
defaulted Receivables and the proceeds from any recourse against Dealers with
respect to such Receivables. In such event, certain factors, such as the
applicable Trust's not having perfected security interests in the Financed
Vehicles in all states, may affect the Servicer's ability to repossess and sell
the collateral securing the
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Receivables, and thus may reduce the proceeds to be distributed to the holders
of the Securities of such series. See "Description of the Transfer and Servicing
Agreements -- Distributions", "-- Credit and Cash Flow Enhancement" and "Certain
Legal Aspects of the Receivables".
The principal offices of each Trust and the related Trustee will be
specified in the applicable Prospectus Supplement.
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale of
the related Securities is limited solely to the express obligations of such
Trustee set forth in the related Trust Agreement and the Sale and Servicing
Agreement or the related Pooling and Servicing Agreement, as applicable. A
Trustee may resign at any time, in which event the Servicer, or its successor,
will be obligated to appoint a successor trustee. The Administrator of a Trust
that is not a grantor trust and the Servicer in respect of a Trust that is a
grantor trust may also remove the Trustee if the Trustee ceases to be eligible
to continue as Trustee under the related Trust Agreement or Pooling and
Servicing Agreement, as applicable, or if the Trustee becomes insolvent. In such
circumstances, the Administrator will be obligated to appoint a successor
trustee. Any resignation or removal of a Trustee and appointment of a successor
trustee will not become effective until acceptance of the appointment by the
successor trustee.
THE RECEIVABLES POOLS
GENERAL
The Receivables in each Receivables Pool have been or will be purchased by
the Servicer from Dealers in the ordinary course of business through its
branches located in the United States. Most of the Dealers sell products
manufactured and/or distributed by Chrysler. The retail installment sale
contracts are purchased pursuant to the Dealer Agreements. The Servicer
purchases contracts in accordance with its credit standards which are based upon
the vehicle buyer's ability and willingness to repay the obligation as well as
the value of the vehicle being financed. The Servicer sells on a daily basis all
retail installment sale contracts that it acquires to the Seller pursuant to an
intercompany agreement.
CCC introduced in 1991 a program to provide Dealers with the opportunity to
be more competitive in setting the APR extended to an Obligor on a retail
installment sale contract based upon credit scoring and transaction
characteristics (such program is referred to herein as "Market Value Pricing").
Although there can be no assurance that such will be the case, the Seller has
been informed by the Servicer that the Servicer believes that retail installment
sale contracts originated pursuant to the Market Value Pricing program may on
average have lower APRs but have fewer losses and delinquencies than the
automobile and light duty truck receivables in the portfolio serviced by CCC
prior to the introduction of the Market Value Pricing Program.
The Receivables to be held by each Trust will be selected from the Seller's
portfolio for inclusion in a Receivables Pool by several criteria, including
that, unless otherwise provided in the related Prospectus Supplement, each
Receivable (i) is secured by a new or used vehicle, (ii) was originated in the
United States, (iii) provides for level monthly payments (except for the last
payment, which may be minimally different from the level payments or which, in
the case of Fixed Value Receivables, may be a final fixed value payment) that
fully amortize the amount financed over its original term to maturity, (iv) is a
Precomputed Receivable or a Simple Interest Receivable and (v) satisfies the
other criteria, if any, set forth in the related Prospectus Supplement. No
selection procedures believed by the Seller to be adverse to the Securityholders
of any series were or will be used in selecting the related Receivables.
"Precomputed Receivables" consist of either (i) monthly actuarial
receivables ("Actuarial Receivables") or (ii) receivables that provide for
allocation of payments according to the "sum of periodic balances" or "sum of
monthly payments" method, similar to the "Rule of 78's" ("Rule of 78's
Receivables"). An Actuarial Receivable provides for amortization of the loan
over a series of fixed level payment monthly installments. Each monthly
installment, including the monthly installment representing the final payment on
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the Receivable, consists of an amount of interest equal to 1/12 of the APR of
the loan multiplied by the unpaid principal balance of the loan, and an amount
of principal equal to the remainder of the monthly payment. A Rule of 78's
Receivable provides for the payment by the obligor of a specified total amount
of payments, payable in equal monthly installments on each due date, which total
represents the principal amount financed and add-on interest in an amount
calculated on the stated APR for the term of the receivable. The rate at which
such amount of add-on interest is earned and, correspondingly, the amount of
each fixed monthly payment allocated to reduction of the outstanding principal
are calculated in accordance with the "Rule of 78's".
"Fixed Value Receivables" are monthly receivables originated under CCC's
Gold Key Plus program and secured by new automobiles or light duty trucks with a
final payment which is greater than the scheduled monthly payments. A Fixed
Value Receivable provides for amortization of the loan over a series of fixed
level payment monthly installments like an Actuarial Receivable, but also
requires a final fixed value payment due after payment of such monthly
installments which may be satisfied by (i) payment in full in cash of such
amount, (ii) transfer of the vehicle to CCC provided certain conditions are
satisfied or (iii) refinancing the fixed value payment in accordance with
certain conditions. With respect to Fixed Value Receivables, unless otherwise
provided in the related Prospectus Supplement, only the principal and interest
payments due prior to the final fixed value payment and not the final fixed
value payment will be included in such Trust; the final fixed value payment will
be sold by the Seller to the applicable Company. However, in the case of a Trust
that is not a grantor trust, such Company will have the option to transfer the
final fixed value payments with respect to the related Fixed Value Receivables
retained by such Company to such Trust and to cause such Trust to issue
certificates representing interests in such final fixed value payments or
indebtedness secured by such final fixed value payments.
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed under each receivable over a series of fixed
level monthly payments. However, unlike the monthly payment under an Actuarial
Receivable, each monthly payment consists of an installment of interest which is
calculated on the basis of the outstanding principal balance of the receivable
multiplied by the stated APR and further multiplied by the period elapsed (as a
fraction of a calendar year) since the preceding payment of interest was made.
As payments are received under a Simple Interest Receivable, the amount received
is applied first to interest accrued to the date of payment and the balance is
applied to reduce the unpaid principal balance. Accordingly, if an obligor pays
a fixed monthly installment before its scheduled due date, the portion of the
payment allocable to interest for the period since the preceding payment was
made will be less than it would have been had the payment been made as
scheduled, and the portion of the payment applied to reduce the unpaid principal
balance will be correspondingly greater. Conversely, if an obligor pays a fixed
monthly installment after its scheduled due date, the portion of the payment
allocable to interest for the period since the preceding payment was made will
be greater than it would have been had the payment been made as scheduled, and
the portion of the payment applied to reduce the unpaid principal balance will
be correspondingly less. In either case, the obligor pays a fixed monthly
installment until the final scheduled payment date, at which time the amount of
the final installment is increased or decreased as necessary to repay the then
outstanding principal balance.
In the event of the prepayment in full (voluntarily or by acceleration) of
a Rule of 78's Receivable, under the terms of the contract, a "refund" or
"rebate" will be made to the obligor of the portion of the total amount of
payments then due and payable under the contract allocable to "unearned" add-on
interest, calculated in accordance with a method equivalent to the Rule of 78's.
If an Actuarial Receivable is prepaid in full, with minor variations based upon
state law, the Actuarial Receivable requires that the rebate be calculated on
the basis of a constant interest rate. If a Simple Interest Receivable is
prepaid, rather than receive a rebate, the obligor is required to pay interest
only to the date of prepayment. The amount of a rebate under a Rule of 78's
Receivable generally will be less than the amount of a rebate on an Actuarial
Receivable and generally will be less than the remaining scheduled payments of
interest that would have been due under a Simple Interest Receivable for which
all payments were made on schedule.
Unless otherwise provided in the related Prospectus Supplement, each Trust
will account for the Rule of 78's Receivables as if such Receivables were
Actuarial Receivables. Amounts received upon prepayment in
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full of a Rule of 78's Receivable in excess of the then outstanding principal
balance of such Receivable and accrued interest thereon (calculated pursuant to
the actuarial method) will not be paid to the Noteholders or passed through to
the Certificateholders of the applicable series but will be paid to the Servicer
as additional servicing compensation.
Information with respect to each Receivables Pool will be set forth in the
related Prospectus Supplement, including, to the extent appropriate, the
composition, the distribution by APR and by the states of origination, the
portion of such Receivables Pool consisting of Precomputed Receivables and of
Simple Interest Receivables and the portion of such Receivables Pool secured by
new vehicles and by used vehicles.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information concerning the experience of the Seller and its United
States subsidiaries pertaining to delinquencies, repossessions and net losses
with respect to new and used retail automobile and light duty truck receivables
(including receivables previously sold which CCC continues to service) will be
set forth in each Prospectus Supplement. There can be no assurance that the
delinquency, repossession and net loss experience on any Receivables Pool will
be comparable to prior experience or to such information.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of the Notes, if any, and the Certificates of any
series will generally be influenced by the rate at which the principal balances
of the related Receivables are paid, which payment may be in the form of
scheduled amortization or prepayments. (For this purpose, the term "prepayments"
includes prepayments in full, partial prepayments (including those related to
rebates of extended warranty contract costs and insurance premiums),
liquidations due to default, as well as receipts of proceeds from physical
damage, credit life and disability insurance policies and certain other
Receivables repurchased by the Seller or the Servicer for administrative
reasons.) All of the Receivables are prepayable at any time without penalty to
the Obligor. The rate of prepayment of automotive receivables is influenced by a
variety of economic, social and other factors, including the fact that an
Obligor generally may not sell or transfer the Financed Vehicle securing a
Receivable without the consent of the Seller. The rate of prepayment on the
Receivables may also be influenced by the structure of the loan. In addition,
under certain circumstances, the Seller will be obligated to repurchase
Receivables from a given Trust pursuant to the related Sale and Servicing
Agreement or Pooling and Servicing Agreement as a result of breaches of
representations and warranties and the Servicer will be obligated to purchase
Receivables from such Trust pursuant to such Sale and Servicing Agreement or
Pooling and Servicing Agreement as a result of breaches of certain covenants.
See "Description of the Transfer and Servicing Agreements -- Sale and Assignment
of Receivables" and "-- Servicing Procedures". See also "Description of the
Transfer and Servicing Agreements -- Termination" regarding the Servicer's
option to purchase the Receivables from a given Trust and "-- Insolvency Event"
regarding the sale of the Receivables owned by a Trust that is not a grantor
trust if an Insolvency Event with respect to the Company applicable to such
Trust occurs.
In light of the above considerations, there can be no assurance as to the
amount of principal payments to be made on the Notes, if any, or the
Certificates of a given series on each Payment Date or Distribution Date, as
applicable, since such amount will depend, in part, on the amount of principal
collected on the related Receivables Pool during the applicable Collection
Period. Any reinvestment risks resulting from a faster or slower incidence of
prepayment of Receivables will be borne entirely by the Noteholders, if any, and
the Certificateholders of a given series. The related Prospectus Supplement may
set forth certain additional information with respect to the maturity and
prepayment considerations applicable to the particular Receivables Pool and the
related series of Securities.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit
decimal which the Servicer will compute prior to each distribution with respect
to such class of Notes indicating the remaining outstanding principal balance of
such class of Notes, as of the applicable Payment Date (after giving effect to
payments to
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be made on such Payment Date), as a fraction of the initial outstanding
principal balance of such class of Notes. The "Certificate Pool Factor" for each
class of Certificates will be a seven-digit decimal which the Servicer will
compute prior to each distribution with respect to such class of Certificates
indicating the remaining Certificate Balance of such class of Certificates, as
of the applicable Distribution Date (after giving effect to distributions to be
made on such Distribution Date), as a fraction of the initial Certificate
Balance of such class of Certificates. Each Note Pool Factor and each
Certificate Pool Factor will initially be 1.0000000 and thereafter will decline
to reflect reductions in the outstanding principal balance of the applicable
class of Notes, or the reduction of the Certificate Balance of the applicable
class of Certificates, as the case may be. A Noteholder's portion of the
aggregate outstanding principal balance of the related class of Notes is the
product of (i) the original denomination of such Noteholder's Note and (ii) the
applicable Note Pool Factor. A Certificateholder's portion of the aggregate
outstanding Certificate Balance for the related class of Certificates is the
product of (a) the original denomination of such Certificateholder's Certificate
and (b) the applicable Certificate Pool Factor.
Unless otherwise provided in the related Prospectus Supplement with respect
to each Trust, the Noteholders, if any, and the Certificateholders will receive
reports on or about each Payment Date concerning (i) with respect to the
Collection Period immediately preceding such Payment Date, payments received on
the Receivables, the Pool Balance (as such term is defined in the related
Prospectus Supplement, the "Pool Balance"), each Certificate Pool Factor or Note
Pool Factor, as applicable, and various other items of information, and (ii)
with respect to the Collection Period second preceding such Payment Date, as
applicable, amounts allocated or distributed on the preceding Payment Date and
any reconciliation of such amounts with information provided by the Servicer
prior to such current Payment Date. In addition, Securityholders of record
during any calendar year will be furnished information for tax reporting
purposes not later than the latest date permitted by law. See "Certain
Information Regarding the Securities -- Reports to Securityholders".
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Securities of a given series will be applied by
the applicable Trust (i) to the purchase of the Receivables from the Seller,
(ii) to make the initial deposit into the Reserve Account, if any, and (iii) to
make the deposit of the Pre-Funded Amount into the Pre-Funding Account, if any.
Unless otherwise specified in the related Prospectus Supplement, the Seller will
use that portion of such net proceeds paid to it with respect to any such Trust
for general corporate purposes.
THE SELLER AND THE SERVICER
THE SELLER
The Seller is a financial services organization, all of the common stock of
which is owned by Chrysler. The Seller, a Michigan corporation, is the
continuing corporation resulting from a merger on June 1, 1967, of a financial
services subsidiary of Chrysler into a newly acquired, previously nonaffiliated
finance company incorporated in 1926. The Seller is engaged in automotive
retail, wholesale and fleet financing, servicing commercial leases and loans,
secured small business financing, and property, casualty and other insurance and
automotive dealership facility development and management. The Seller's business
is substantially dependent upon the operations of Chrysler. In particular, lower
levels of production and sale of Chrysler's automotive products could result in
a reduction in the level of finance and insurance operations of the Seller. See
"Special Considerations -- Trust's Relationship to the Seller and Chrysler
Credit Corporation; Financial Condition of Chrysler Corporation" in the related
Prospectus Supplement. The related Prospectus Supplement will set forth certain
additional information with respect to the Seller. The Seller's executive
offices are located at 27777 Franklin Road, Southfield, Michigan 48034-8286, and
its telephone number is (810) 948-3060.
The Seller will warrant to each Trust in the related Sale and Servicing
Agreement or Pooling and Servicing Agreement that the sale of the applicable
Receivables by the Seller to such Trust is a valid sale of
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such Receivables to such Trust. In addition, the Seller and such Trust will
treat the transactions described herein and in the related Prospectus Supplement
as a sale of such Receivables to such Trust and the Seller will take all actions
that are required to perfect the Trust's ownership interest in such Receivables.
Notwithstanding the foregoing, if the Seller were to become a debtor in a
bankruptcy case and a creditor or trustee in bankruptcy of such debtor or such
debtor itself were to take the position that the sale of Receivables to a Trust
should instead be treated as a pledge of such Receivables to secure a borrowing
of such debtor, then delays in payments of collections of such Receivables could
occur or (should the court rule in favor of any such trustee, debtor or
creditor) reductions in the amount of such payments could result. If the
transfer of Receivables to a Trust is treated as a pledge instead of a sale, a
tax or government lien on the property of the Seller arising before the transfer
of Receivables to such Trust may have priority over such Trust's interest in
such Receivables. If the transactions contemplated herein are treated as a sale,
the Receivables would not be part of the Seller's bankruptcy estate and would
not be available to the Seller's creditors.
THE SERVICER
CCC, a wholly owned subsidiary of the Seller, provides retail, wholesale
and lease financing services to automobile dealers and their customers
throughout the United States. The related Prospectus Supplement will set forth
certain additional information with respect to the Servicer.
DESCRIPTION OF THE NOTES
GENERAL
With respect to each Trust that issues Notes, one or more classes of Notes
of the related series will be issued pursuant to the terms of an Indenture, a
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Notes and the Indenture.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by one or more Notes, in each case
registered in the name of the nominee of DTC (together with any successor
depository selected by the Trust, the "Depository") except as set forth below.
Unless otherwise specified in the related Prospectus Supplement, the Notes will
be available for purchase in denominations of $1,000 and integral multiples
thereof in book-entry form only. The Seller has been informed by DTC that DTC's
nominee will be Cede, unless another nominee is specified in the related
Prospectus Supplement. Accordingly, such nominee is expected to be the holder of
record of the Notes of each class. Unless and until Definitive Notes are issued
under the limited circumstances described herein or in the related Prospectus
Supplement, no Noteholder will be entitled to receive a physical certificate
representing a Note. All references herein and in the related Prospectus
Supplement to actions by Noteholders refer to actions taken by DTC upon
instructions from its participating organizations (the "Participants") and all
references herein and in the related Prospectus Supplement to distributions,
notices, reports and statements to Noteholders refer to distributions, notices,
reports and statements to DTC or its nominee, as the registered holder of the
Notes, for distribution to Noteholders in accordance with DTC's procedures with
respect thereto. See "Certain Information Regarding the Securities -- Book-Entry
Registration" and "-- Definitive Securities".
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
Interest Rate and amount of or method of determining payments of principal and
interest on each class of Notes of a given series will be described in the
related Prospectus Supplement. The right of holders of any class of Notes to
receive payments of principal and interest may be senior or subordinate to the
rights of holders of any other class or classes of Notes of such series, as
described in the related Prospectus Supplement. Unless otherwise provided in the
related Prospectus Supplement, payments of interest on the Notes of such series
will be made prior to payments of principal thereon. To the extent provided in
the related Prospectus Supplement, a series may include one or more classes of
Strip Notes entitled to (i) principal payments with disproportionate, nominal or
no interest payments or (ii) interest payments with disproportionate, nominal or
no principal payments. Each
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<PAGE> 87
class of Notes may have a different Interest Rate, which may be a fixed,
variable or adjustable Interest Rate (and which may be zero for certain classes
of Strip Notes), or any combination of the foregoing. The related Prospectus
Supplement will specify the Interest Rate for each class of Notes of a given
series or the method for determining such Interest Rate. See also "Certain
Information Regarding the Securities -- Fixed Rate Securities" and "-- Floating
Rate Securities". One or more classes of Notes of a series may be redeemable in
whole or in part under the circumstances specified in the related Prospectus
Supplement, including at the end of the Funding Period (if any) or as a result
of the Servicer's exercising its option to purchase the related Receivables
Pool.
To the extent specified in any Prospectus Supplement, one or more classes
of Notes of a given series may have fixed principal payment schedules, as set
forth in such Prospectus Supplement; Noteholders of such Notes would be entitled
to receive as payments of principal on any given Payment Date the applicable
amounts set forth on such schedule with respect to such Notes, in the manner and
to the extent set forth in the related Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, payments
to Noteholders of all classes within a series in respect of interest will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on any
of the dates specified for payments in the related Prospectus Supplement (each,
a "Payment Date", which may be the same date as each Distribution Date as
specified in the related Prospectus Supplement), in which case each class of
Noteholders will receive its ratable share (based upon the aggregate amount of
interest due to such class of Noteholders) of the aggregate amount available to
be distributed in respect of interest on the Notes of such series. See
"Description of the Transfer and Servicing Agreements -- Distributions" and
"-- Credit and Cash Flow Enhancement".
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Payments in respect of principal and interest of any
class of Notes will be made on a pro rata basis among all the Noteholders of
such class.
THE INDENTURE
Modification of Indenture. With respect to each Trust that has issued
Notes pursuant to an Indenture, the Trust and the Indenture Trustee may, with
the consent of the holders of a majority of the outstanding Notes of the related
series, execute a supplemental indenture to add provisions to, change in any
manner or eliminate any provisions of, the related Indenture, or modify (except
as provided below) in any manner the rights of the related Noteholders.
Unless otherwise specified in the related Prospectus Supplement with
respect to a series of Notes, without the consent of the holder of each such
outstanding Note affected thereby, however, no supplemental indenture will: (i)
change the due date of any installment of principal of or interest on any such
Note or reduce the principal amount thereof, the interest rate specified thereon
or the redemption price with respect thereto or change any place of payment
where or the coin or currency in which any such Note or any interest thereon is
payable; (ii) impair the right to institute suit for the enforcement of certain
provisions of the related Indenture regarding payment; (iii) reduce the
percentage of the aggregate amount of the outstanding Notes of such series, the
consent of the holders of which is required for any such supplemental indenture
or the consent of the holders of which is required for any waiver of compliance
with certain provisions of the related Indenture or of certain defaults
thereunder and their consequences as provided for in such Indenture; (iv) modify
or alter the provisions of the related Indenture regarding the voting of Notes
held by the applicable Trust, any other obligor on such Notes, the Seller or an
affiliate of any of them; (v) reduce the percentage of the aggregate outstanding
amount of such Notes, the consent of the holders of which is required to direct
the related Indenture Trustee to sell or liquidate the Receivables if the
proceeds of such sale would be insufficient to pay the principal amount and
accrued but unpaid interest on the outstanding Notes of such series; (vi)
decrease the percentage of the aggregate principal amount of such Notes required
to amend the sections of the related
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<PAGE> 88
Indenture which specify the applicable percentage of aggregate principal amount
of the Notes of such series necessary to amend such Indenture or certain other
related agreements; or (vii) permit the creation of any lien ranking prior to or
on a parity with the lien of the related Indenture with respect to any of the
collateral for such Notes or, except as otherwise permitted or contemplated in
such Indenture, terminate the lien of such Indenture on any such collateral or
deprive the holder of any such Note of the security afforded by the lien of such
Indenture.
Unless otherwise provided in the applicable Prospectus Supplement, the
Trust and the applicable Indenture Trustee may also enter into supplemental
indentures, without obtaining the consent of the Noteholders of the related
series, for the purpose of, among other things, adding any provisions to or
changing in any manner or eliminating any of the provisions of the related
Indenture or of modifying in any manner the rights of such Noteholders; provided
that such action will not materially and adversely affect the interest of any
such Noteholder.
Events of Default; Rights upon Event of Default. With respect to the Notes
of a given series, unless otherwise specified in the related Prospectus
Supplement, "Events of Default" under the related Indenture will consist of: (i)
a default for five days or more in the payment of any interest on any such Note;
(ii) a default in the payment of the principal of or any installment of the
principal of any such Note when the same becomes due and payable; (iii) a
default in the observance or performance of any covenant or agreement of the
applicable Trust made in the related Indenture and the continuation of any such
default for a period of 30 days after notice thereof is given to such Trust by
the applicable Indenture Trustee or to such Trust and such Indenture Trustee by
the holders of at least 25% in principal amount of such Notes then outstanding;
(iv) any representation or warranty made by such Trust in the related Indenture
or in any certificate delivered pursuant thereto or in connection therewith
having been incorrect in a material respect as of the time made, and such breach
not having been cured within 30 days after notice thereof is given to such Trust
by the applicable Indenture Trustee or to such Trust and such Indenture Trustee
by the holders of at least 25% in principal amount of such Notes then
outstanding; or (v) certain events of bankruptcy, insolvency, receivership or
liquidation of the applicable Trust. However, the amount of principal required
to be paid to Noteholders of such series under the related Indenture will
generally be limited to amounts available to be deposited in the applicable Note
Distribution Account. Therefore, unless otherwise specified in the related
Prospectus Supplement, the failure to pay principal on a class of Notes
generally will not result in the occurrence of an Event of Default until the
final scheduled Payment Date for such class of Notes.
If an Event of Default should occur and be continuing with respect to the
Notes of any series, the related Indenture Trustee or holders of a majority in
principal amount of such Notes then outstanding may declare the principal of
such Notes to be immediately due and payable. Unless otherwise specified in the
related Prospectus Supplement, such declaration may, under certain
circumstances, be rescinded by the holders of a majority in principal amount of
such Notes then outstanding.
If the Notes of any series are due and payable following an Event of
Default with respect thereto, the related Indenture Trustee may institute
proceedings to collect amounts due or foreclose on Trust property, exercise
remedies as a secured party, sell the related Receivables or elect to have the
applicable Trust maintain possession of such Receivables and continue to apply
collections on such Receivables as if there had been no declaration of
acceleration. Unless otherwise specified in the related Prospectus Supplement,
however, such Indenture Trustee is prohibited from selling the related
Receivables following an Event of Default, other than a default in the payment
of any principal of or a default for five days or more in the payment of any
interest on any Note of such series, unless (i) the holders of all such
outstanding Notes consent to such sale, (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on such
outstanding Notes at the date of such sale or (iii) such Indenture Trustee
determines that the proceeds of Receivables would not be sufficient on an
ongoing basis to make all payments on such Notes as such payments would have
become due if such obligations had not been declared due and payable, and such
Indenture Trustee obtains the consent of the holders of 66 2/3% of the aggregate
outstanding amount of such Notes.
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<PAGE> 89
Subject to the provisions of the applicable Indenture relating to the
duties of the related Indenture Trustee, if an Event of Default occurs and is
continuing with respect to a series of Notes, such Indenture Trustee will be
under no obligation to exercise any of the rights or powers under such Indenture
at the request or direction of any of the holders of such Notes, if such
Indenture Trustee reasonably believes it will not be adequately indemnified
against the costs, expenses and liabilities which might be incurred by it in
complying with such request. Subject to the provisions for indemnification and
certain limitations contained in the related Indenture, the holders of a
majority in principal amount of the outstanding Notes of a given series will
have the right to direct the time, method and place of conducting any proceeding
or any remedy available to the applicable Indenture Trustee, and the holders of
a majority in principal amount of such Notes then outstanding may, in certain
cases, waive any default with respect thereto, except a default in the payment
of principal or interest or a default in respect of a covenant or provision of
such Indenture that cannot be modified without the waiver or consent of all the
holders of such outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no holder
of a Note of any series will have the right to institute any proceeding with
respect to the related Indenture, unless (i) such holder previously has given to
the applicable Indenture Trustee written notice of a continuing Event of
Default, (ii) the holders of not less than 25% in principal amount of the
outstanding Notes of such series have made written request to such Indenture
Trustee to institute such proceeding in its own name as Indenture Trustee, (iii)
such holder or holders have offered such Indenture Trustee reasonable indemnity,
(iv) such Indenture Trustee has for 60 days failed to institute such proceeding
and (v) no direction inconsistent with such written request has been given to
such Indenture Trustee during such 60-day period by the holders of a majority in
principal amount of such outstanding Notes.
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not at any time
institute against the applicable Trust any bankruptcy, reorganization or other
proceeding under any federal or state bankruptcy or similar law.
With respect to any Trust, neither the related Indenture Trustee nor the
related Trustee in its individual capacity, nor any holder of a Certificate
representing an ownership interest in such Trust nor any of their respective
owners, beneficiaries, agents, officers, directors, employees, affiliates,
successors or assigns will, in the absence of an express agreement to the
contrary, be personally liable for the payment of the principal of or interest
on the related Notes or for the agreements of such Trust contained in the
applicable Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the laws
of the United States, any state or the District of Columbia, (ii) such entity
expressly assumes such Trust's obligation to make due and punctual payments upon
the Notes of the related series and the performance or observance of every
agreement and covenant of such Trust under the Indenture, (iii) no Event of
Default shall have occurred and be continuing immediately after such merger or
consolidation, (iv) such Trust has been advised that the rating of the Notes or
the Certificates of such series then in effect would not be reduced or withdrawn
by the Rating Agencies as a result of such merger or consolidation and (v) such
Trust has received an opinion of counsel to the effect that such consolidation
or merger would have no material adverse tax consequence to the Trust or to any
related Noteholder or Certificateholder.
Each Trust will not, among other things, (i) except as expressly permitted
by the applicable Indenture, the applicable Transfer and Servicing Agreements or
certain related documents with respect to such Trust (collectively, the "Related
Documents"), sell, transfer, exchange or otherwise dispose of any of the assets
of such Trust, (ii) claim any credit on or make any deduction from the principal
and interest payable in respect of the Notes of the related series (other than
amounts withheld under the Code or applicable state law) or assert any claim
against any present or former holder of such Notes because of the payment of
taxes levied or assessed upon such Trust, (iii) dissolve or liquidate in whole
or in part, (iv) permit the validity or effectiveness of the related Indenture
to be impaired or permit any person to be released from any covenants or
obligations with respect to such Notes under such Indenture except as may be
expressly permitted thereby or (v) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance to be created on or extend to
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<PAGE> 90
or otherwise arise upon or burden the assets of such Trust or any part thereof,
or any interest therein or the proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust". No Trust will
incur, assume or guarantee any indebtedness other than indebtedness incurred
pursuant to the related Notes and the related Indenture, pursuant to any
Advances made to it by the Servicer or otherwise in accordance with the Related
Documents.
Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment of
its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee for each Trust
will be required to mail each year to all related Noteholders a brief report
relating to its eligibility and qualification to continue as Indenture Trustee
under the related Indenture, any amounts advanced by it under the Indenture, the
amount, interest rate and maturity date of certain indebtedness owing by such
Trust to the applicable Indenture Trustee in its individual capacity, the
property and funds physically held by such Indenture Trustee as such and any
action taken by it that materially affects the related Notes and that has not
been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the related Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with such Indenture Trustee of funds
sufficient for the payment in full of all such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the
related Prospectus Supplement. The Indenture Trustee for any series may resign
at any time, in which event the Issuer will be obligated to appoint a successor
trustee for such series. The Issuer may also remove any such Indenture Trustee
if such Indenture Trustee ceases to be eligible to continue as such under the
related Indenture or if such Indenture Trustee becomes insolvent. In such
circumstances, the Issuer will be obligated to appoint a successor trustee for
the applicable series of Notes. Any resignation or removal of the Indenture
Trustee and appointment of a successor trustee for any series of Notes does not
become effective until acceptance of the appointment by the successor trustee
for such series.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of the
related series will be issued pursuant to the terms of a Trust Agreement or a
Pooling and Servicing Agreement, a form of each of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
following summary does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
Certificates and the Trust Agreement or Pooling and Servicing Agreement, as
applicable.
Unless otherwise specified in the related Prospectus Supplement and except
for the Certificates, if any, of a given series purchased by the applicable
Company, each class of Certificates will initially be represented by one or more
Certificates registered in the name of the Depository, except as set forth
below. Unless otherwise specified in the related Prospectus Supplement and
except for the Certificates, if any, of a given series purchased by the
applicable Company, the Certificates will be available for purchase in minimum
denominations of $20,000 and integral multiples of $1,000 in excess thereof in
book-entry form only. The Seller has been informed by DTC that DTC's nominee
will be Cede, unless another nominee is specified in the related Prospectus
Supplement. Accordingly, such nominee is expected to be the holder of record of
the Certificates of any series that are not purchased by the related Company.
Unless and until Definitive Certificates are issued under the limited
circumstances described herein or in the related Prospectus Supplement, no
Certificateholder (other than the applicable Company) will be entitled to
receive a physical certificate representing a
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<PAGE> 91
Certificate. All references herein and in the related Prospectus Supplement to
actions by Certificateholders refer to actions taken by DTC upon instructions
from the Participants and all references herein and in the related Prospectus
Supplement to distributions, notices, reports and statements to
Certificateholders refer to distributions, notices, reports and statements to
DTC or its nominee, as the case may be, as the registered holder of the
Certificates, for distribution to Certificateholders in accordance with DTC's
procedures with respect thereto. See "Certain Information Regarding the
Securities -- Book-Entry Registration" and " -- Definitive Securities". Any
Certificates of a given series owned by the applicable Company or its affiliates
will be entitled to equal and proportionate benefits under the applicable Trust
Agreement, except that such Certificates will be deemed not to be outstanding
for the purpose of determining whether the requisite percentage of
Certificateholders have given any request, demand, authorization, direction,
notice, consent or other action under the Related Documents (other than the
commencement by the related Trust of a voluntary proceeding in bankruptcy as
described under "Description of the Transfer and Servicing Agreements --
Insolvency Event").
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of losses,
Pass Through Rate and amount of or method of determining distributions with
respect to principal and interest of each class of Certificates will be
described in the related Prospectus Supplement. Distributions of interest on
such Certificates will be made on the dates specified in the related Prospectus
Supplement (each, a "Distribution Date") and will be made prior to distributions
with respect to principal of such Certificates. To the extent provided in the
related Prospectus Supplement, a series may include one or more classes of Strip
Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distributions or (ii) interest
distributions with disproportionate, nominal or no distributions in respect of
principal. Each class of Certificates may have a different Pass Through Rate,
which may be a fixed, variable or adjustable Pass Through Rate (and which may be
zero for certain classes of Strip Certificates) or any combination of the
foregoing. The related Prospectus Supplement will specify the Pass Through Rate
for each class of Certificates of a given series or the method for determining
such Pass Through Rate. See also "Certain Information Regarding the
Securities -- Fixed Rate Securities" and "-- Floating Rate Securities". Unless
otherwise provided in the related Prospectus Supplement, distributions in
respect of the Certificates of a given series that includes Notes may be
subordinate to payments in respect of the Notes of such series as more fully
described in the related Prospectus Supplement. Distributions in respect of
interest on and principal of any class of Certificates will be made on a pro
rata basis among all the Certificateholders of such class.
In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal, and any schedule or formula
or other provisions applicable to the determination thereof, of each such class
shall be as set forth in the related Prospectus Supplement.
CERTAIN INFORMATION REGARDING THE SECURITIES
FIXED RATE SECURITIES
Each class of Securities (other than certain classes of Strip Notes or
Strip Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the applicable Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass Through Rate, as the case may be,
specified in the applicable Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the
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<PAGE> 92
basis of a 360-day year of twelve 30-day months. See "Description of the
Notes -- Principal and Interest on the Notes" and "Description of the
Certificates -- Distributions of Principal and Interest".
FLOATING RATE SECURITIES
Each class of Floating Rate Securities will bear interest for each
applicable Interest Reset Period (as such term is defined in the related
Prospectus Supplement with respect to a class of Floating Rate Securities, the
"Interest Reset Period") at a rate per annum determined by reference to an
interest rate basis (the "Base Rate"), plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, in each case as specified in the
related Prospectus Supplement. The "Spread" is the number of basis points (one
basis point equals one one-hundredth of a percentage point) that may be
specified in the applicable Prospectus Supplement as being applicable to such
class, and the "Spread Multiplier" is the percentage that may be specified in
the applicable Prospectus Supplement as being applicable to such class.
The applicable Prospectus Supplement will designate one of the following
Base Rates as applicable to a given Floating Rate Security: (i) LIBOR (a "LIBOR
Security"), (ii) the Commercial Paper Rate (a "Commercial Paper Rate Security"),
(iii) the Treasury Rate (a "Treasury Rate Security"), (iv) the Federal Funds
Rate (a "Federal Funds Rate Security"), (v) the CD Rate (a "CD Rate Security")
or (vi) such other Base Rate as is set forth in such Prospectus Supplement. The
"Index Maturity" for any class of Floating Rate Securities is the period of
maturity of the instrument or obligation from which the Base Rate is calculated.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication, published by the Board
of Governors of the Federal Reserve System. "Composite Quotations" means the
daily statistical release entitled "Composite 3:30 p.m. Quotations for U.S.
Government Securities" published by the Federal Reserve Bank of New York.
"Interest Reset Date" will be the first day of the applicable Interest Reset
Period, or such other day as may be specified in the related Prospectus
Supplement with respect to a class of Floating Rate Securities.
As specified in the applicable Prospectus Supplement, Floating Rate
Securities of a given class may also have either or both of the following (in
each case expressed as a rate per annum): (i) a maximum limitation, or ceiling,
on the rate at which interest may accrue during any interest period and (ii) a
minimum limitation, or floor, on the rate at which interest may accrue during
any interest period. In addition to any maximum interest rate that may be
applicable to any class of Floating Rate Securities, the interest rate
applicable to any class of Floating Rate Securities will in no event be higher
than the maximum rate permitted by applicable law, as the same may be modified
by United States law of general application.
Each Trust with respect to which a class of Floating Rate Securities will
be issued will appoint, and enter into agreements with, a calculation agent
(each, a "Calculation Agent") to calculate interest rates on each such class of
Floating Rate Securities issued with respect thereto. The applicable Prospectus
Supplement will set forth the identity of the Calculation Agent for each such
class of Floating Rate Securities of a given series, which may be either the
related Trustee or Indenture Trustee with respect to such series. All
determinations of interest by the Calculation Agent shall, in the absence of
manifest error, be conclusive for all purposes and binding on the holders of
Floating Rate Securities of a given class. Unless otherwise specified in the
applicable Prospectus Supplement, all percentages resulting from any calculation
of the rate of interest on a Floating Rate Security will be rounded, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths
of a percentage point rounded upward.
CD Rate Securities. Each CD Rate Security will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the CD
Rate and the Spread or Spread Multiplier, if any, specified in such Security and
in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the second business
day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Prospectus Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date (as defined below) pertaining to such CD Rate Determination Date, then the
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"CD Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Prospectus Supplement as published in Composite
Quotations under the heading "Certificates of Deposit". If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either H.15(519) or Composite Quotations, then the "CD Rate" for such Interest
Reset Period will be calculated by the Calculation Agent for such CD Rate
Security and will be the arithmetic mean of the secondary market offered rates
as of 10:00 a.m., New York City time, on such CD Rate Determination Date, of
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent for such CD Rate
Security for negotiable certificates of deposit of major United States money
center banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index Maturity
designated in the related Prospectus Supplement in a denomination of $5,000,000;
provided, however, that if the dealers selected as aforesaid by such Calculation
Agent are not quoting offered rates as mentioned in this sentence, the "CD Rate"
for such Interest Reset Period will be the same as the CD Rate for the
immediately preceding Interest Reset Period.
The "Calculation Date" pertaining to any CD Rate Determination Date shall
be the first to occur of (a) the tenth calendar day after such CD Rate
Determination Date or, if such day is not a business day, the next succeeding
business day or (b) the second business day preceding the date any payment is
required to be made for any period following the applicable Interest Reset Date.
Commercial Paper Rate Securities. Each Commercial Paper Rate Security will
bear interest for each Interest Reset Period at the interest rate calculated
with reference to the Commercial Paper Rate and the Spread or Spread Multiplier,
if any, specified in such Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Security as of the second
business day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Prospectus Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published prior
to 3:00 p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money Market
Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial Paper
Rate Security for commercial paper of the specified Index Maturity placed for an
industrial issuer whose bonds are rated "AA" or the equivalent by a nationally
recognized rating agency; provided, however, that if the dealers selected as
aforesaid by such Calculation Agent are not quoting offered rates as mentioned
in this sentence, the "Commercial Paper Rate" for such Interest Reset Period
will be the same as the Commercial Paper Rate for the immediately preceding
Interest Reset Period.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C> <C>
D X 360
Money Market Yield = -------------- X 100
360 - (D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the specified Index Maturity.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the first to occur of (a) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day
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is not a business day, the next succeeding business day or (b) the second
business day preceding the date any payment is required to be made for any
period following the applicable Interest Reset Date.
Federal Funds Rate Securities. Each Federal Funds Rate Security will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any,
specified in such Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date (as
defined below) pertaining to such Federal Funds Rate Determination Date, the
"Federal Funds Rate" for such Interest Reset Period shall be the rate on such
Federal Funds Rate Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate". If by 3:00 p.m., New York City time,
on such Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date made
publicly available by the Federal Reserve Bank of New York which is equivalent
to the rate which appears in H.15(519) under the heading "Federal Funds
(Effective)"; provided, however, that if such rate is not made publicly
available by the Federal Reserve Bank of New York by 3:00 p.m., New York City
time, on such Calculation Date, the "Federal Funds Rate" for such Interest Reset
Period will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period. In the case of a Federal Funds Rate Security
that resets daily, the interest rate on such Security for the period from and
including a Monday to but excluding the succeeding Monday will be reset by the
Calculation Agent for such Security on such second Monday (or, if not a business
day, on the next succeeding business day) to a rate equal to the average of the
Federal Funds Rates in effect with respect to each such day in such week.
The "Calculation Date" pertaining to any Federal Funds Rate Determination
Date shall be the next succeeding business day.
LIBOR Securities. Each LIBOR Security will bear interest for each Interest
Reset Period at the interest rate calculated with reference to LIBOR and the
Spread or Spread Multiplier, if any, specified in such Security and in the
applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, with
respect to LIBOR indexed to the offered rates for U.S. dollar deposits, "LIBOR"
for each Interest Reset Period will be determined by the Calculation Agent for
any LIBOR Security as follows:
(i) On the second London Banking Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Security will determine the arithmetic
mean of the offered rates for deposits in U.S. dollars for the period of
the Index Maturity specified in the applicable Prospectus Supplement,
commencing on such Interest Reset Date, which appear on the Reuters Screen
LIBO Page at approximately 11:00 a.m., London time, on such LIBOR
Determination Date. For purposes of calculating LIBOR, "London Banking Day"
means any business day on which dealings in deposits in United States
dollars are transacted in the London interbank market and "Reuters Screen
LIBO Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks). If at least two such offered rates appear on the
Reuters Screen LIBO Page, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such offered rates as determined by the Calculation
Agent for such LIBOR Security.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO
Page on such LIBOR Determination Date, the Calculation Agent for such LIBOR
Security will request the principal London offices of each of four major
banks in the London interbank market selected by such Calculation Agent to
provide such Calculation Agent with its offered quotations for deposits in
U.S. dollars for the period of
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the specified Index Maturity, commencing on such Interest Reset Date, to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such LIBOR Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative of a
single transaction in such market at such time. If at least two such
quotations are provided, "LIBOR" for such Interest Reset Period will be the
arithmetic mean of such quotations. If fewer than two such quotations are
provided, "LIBOR" for such Interest Reset Period will be the arithmetic
mean of rates quoted by three major banks in The City of New York selected
by the Calculation Agent for such LIBOR Security at approximately 11:00
a.m., New York City time, on such LIBOR Determination Date for loans in
U.S. dollars to leading European banks, for the period of the specified
Index Maturity, commencing on such Interest Reset Date, and in a principal
amount equal to an amount of not less than $1,000,000 that is
representative of a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by such
Calculation Agent are not quoting rates as mentioned in this sentence,
"LIBOR" for such Interest Reset Period will be the same as LIBOR for the
immediately preceding Interest Reset Period.
Treasury Rate Securities. Each Treasury Rate Security will bear interest
for each Interest Reset Period at the interest rate calculated with reference to
the Treasury Rate and the Spread or Spread Multiplier, if any, specified in such
Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Treasury Rate" for each Interest Period will be the rate for the auction held
on the Treasury Rate Determination Date (as defined below) for such Interest
Reset Period of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified in the applicable Prospectus Supplement, as
such rate shall be published in H.15(519) under the heading "U.S. Government
Securities -- Treasury bills -- auction average (investment)" or, in the event
that such rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such Treasury Rate
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) on such Treasury Rate Determination Date as otherwise announced by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the specified Index Maturity are not published
or reported as provided above by 3:00 p.m., New York City time, on such
Calculation Date, or if no such auction is held on such Treasury Rate
Determination Date, then the "Treasury Rate" for such Interest Reset Period
shall be calculated by the Calculation Agent for such Treasury Rate Security and
shall be the yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Treasury Rate Determination Date, of three
leading primary United States government securities dealers selected by such
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if the dealers
selected as aforesaid by such Calculation Agent are not quoting bid rates as
mentioned in this sentence, then the "Treasury Rate" for such Interest Reset
Period will be the same as the Treasury Rate for the immediately preceding
Interest Reset Period.
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury bills would normally be auctioned. Treasury bills
are normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Treasury Rate Determination Date pertaining to the Interest Reset
Period commencing in the next succeeding week. If an auction date shall fall on
any day that would otherwise be an Interest Reset Date for a Treasury Rate
Security, then such Interest Reset Date shall instead be the business day
immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination Date
shall be the first to occur of (a) the tenth calendar day after such Treasury
Rate Determination Date or, if such a day is not a business day, the next
succeeding business day or (b) the second business day preceding the date any
payment is required to be made for any period following the applicable Interest
Reset Date.
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INDEXED SECURITIES
To the extent so specified in any Prospectus Supplement, any class of
Securities of a given series may consist of Securities ("Indexed Securities") in
which the principal amount payable at the final scheduled Payment Date or
Distribution Date, as the case may be, for such class (the "Indexed Principal
Amount") is determined by reference to a measure (the "Index") which will be
related to (i) the difference in the rate of exchange between United States
dollars and a currency or composite currency (the "Indexed Currency") specified
in the applicable Prospectus Supplement (such Indexed Securities, "Currency
Indexed Securities"); (ii) the difference in the price of a specified commodity
(the "Indexed Commodity") on specified dates (such Indexed Securities,
"Commodity Indexed Securities"); or (iii) the difference in the level of a
specified stock index (the "Stock Index"), which may be based on U.S. or foreign
stocks, on specified dates (such Indexed Securities, "Stock Indexed
Securities"); or (iv) such other objective price or economic measures as are
described in the applicable Prospectus Supplement. The manner of determining the
Indexed Principal Amount of an Indexed Security and historical and other
information concerning the Indexed Currency, the Indexed Commodity, the Stock
Index or other price or economic measures used in such determination will be set
forth in the applicable Prospectus Supplement, together with information
concerning tax consequences to the holders of such Indexed Securities.
If the determination of the Indexed Principal Amount of an Indexed Security
is based on an Index calculated or announced by a third party and such third
party either suspends the calculation or announcement of such Index or changes
the basis upon which such Index is calculated (other than changes consistent
with policies in effect at the time such Indexed Security was issued and
permitted changes described in the applicable Prospectus Supplement), then such
Index shall be calculated for purposes of such Indexed Security by an
independent calculation agent named in the applicable Prospectus Supplement on
the same basis, and subject to the same conditions and controls, as applied to
the original third party. If for any reason such Index cannot be calculated on
the same basis and subject to the same conditions and controls as applied to the
original third party, then the Indexed Principal Amount of such Indexed Security
shall be calculated in the manner set forth in the applicable Prospectus
Supplement. Any determination of such independent calculation agent shall in the
absence of manifest error be binding on all parties.
Unless otherwise specified in the applicable Prospectus Supplement,
interest on an Indexed Security will be payable based on the amount designated
in the applicable Prospectus Supplement as the "Face Amount" of such Indexed
Security. The applicable Prospectus Supplement will describe whether the
principal amount of the related Indexed Security, if any, that would be payable
upon redemption or repayment prior to the applicable final scheduled Payment
Date or Distribution Date, as the case may be, will be the Face Amount of such
Indexed Security, the Indexed Principal Amount of such Indexed Security at the
time of redemption or repayment or another amount described in such Prospectus
Supplement.
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entries,
thereby eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Unless otherwise specified in the related Prospectus Supplement,
Securityholders that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Securities may do so only through Participants and Indirect Participants. In
addition, Securityholders will receive all distributions of principal and
interest from the related Indenture Trustee or the related Trustee, as
applicable (the "Applicable Trustee"), through Participants. Under a book-entry
format, Securityholders may
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experience some delay in their receipt of payments, since such payments will be
forwarded by the Applicable Trustee to DTC's Nominee. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Securityholders. Except to the extent the applicable Company
holds Certificates with respect to any series of Securities, it is anticipated
that the only "Securityholder", "Noteholder" and "Certificateholder" will be
DTC's Nominee. Noteholders will not be recognized by each Indenture Trustee as
Noteholders, as such term is used in each Indenture, and Noteholders will be
permitted to exercise the rights of Noteholders only indirectly through DTC and
its Participants. Similarly, Certificateholders will not be recognized by each
Trustee as Certificateholders as such term is used in each Trust Agreement or
Pooling and Servicing Agreement, and Certificateholders will be permitted to
exercise the rights of Certificateholders only indirectly through DTC and its
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Securities among Participants on whose behalf it acts with respect to the
Securities and to receive and transmit distributions of principal of, and
interest on, the Securities. Participants and Indirect Participants with which
Securityholders have accounts with respect to the Securities similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Securityholders. Accordingly, although
Securityholders will not possess Securities, the Rules provide a mechanism by
which Participants will receive payments and will be able to transfer their
interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Securityholder to pledge Securities to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to such
Securities, may be limited due to the lack of a physical certificate for such
Securities.
DTC has advised the Seller that it will take any action permitted to be
taken by a Noteholder under the related Indenture or a Certificateholder under
the related Trust Agreement or Pooling and Servicing Agreement only at the
direction of one or more Participants to whose accounts with DTC the applicable
Notes or Certificates are credited. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of Participants whose holdings include such undivided interests.
Except as required by law, neither the Administrator, if any, the
applicable Trustee nor the applicable Indenture Trustee, if any, will have any
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of the Securities of any series held by DTC's
Nominee, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DEFINITIVE SECURITIES
Unless otherwise specified in the related Prospectus Supplement, the Notes,
if any, and the Certificates of a given series will be issued in fully
registered, certificated form ("Definitive Notes" and "Definitive Certificates",
respectively, and collectively referred to herein as "Definitive Securities") to
Noteholders or Certificateholders or their respective nominees, rather than to
DTC or its nominee, only if (i) the related Administrator or Trustee, as
applicable, determines that DTC is no longer willing or able to discharge
properly its responsibilities as depository with respect to such Securities and
such Administrator or Trustee is unable to locate a qualified successor (and if
it is an Administrator that has made such determination, such Administrator so
notifies the Applicable Trustee in writing), (ii) the Administrator or Trustee,
as applicable, at its option, elects to terminate the book-entry system through
DTC or (iii) after the occurrence of an Event of Default or a Servicer Default
with respect to such Securities, holders representing at least a majority of the
outstanding principal amount of the Notes or the Certificates, as the case may
be, of such series advise the Applicable Trustee through DTC in writing that the
continuation of a book-entry system through DTC (or a successor thereto) with
respect to such Notes or Certificates is no longer in the best interest of the
holders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Applicable Trustee will be required to notify all applicable
Securityholders of a given series through Participants of the availability of
Definitive Securities. Upon surrender by DTC of the definitive certificates
representing the
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corresponding Securities and receipt of instructions for re-registration, the
Applicable Trustee will reissue such Securities as Definitive Securities to such
Securityholders.
Distributions of principal of, and interest on, such Definitive Securities
will thereafter be made by the Applicable Trustee in accordance with the
procedures set forth in the related Indenture or the related Trust Agreement or
Pooling and Servicing Agreement, as applicable, directly to holders of
Definitive Securities in whose names the Definitive Securities were registered
at the close of business on the applicable Record Date specified for such
Securities in the related Prospectus Supplement. Such distributions will be made
by check mailed to the address of such holder as it appears on the register
maintained by the Applicable Trustee. The final payment on any such Definitive
Security, however, will be made only upon presentation and surrender of such
Definitive Security at the office or agency specified in the notice of final
distribution to the applicable Securityholders.
Definitive Securities will be transferable and exchangeable at the offices
of the Applicable Trustee or of a registrar named in a notice delivered to
holders of Definitive Securities. No service charge will be imposed for any
registration of transfer or exchange, but the Applicable Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith.
LIST OF SECURITYHOLDERS
Unless otherwise specified in the related Prospectus Supplement with
respect to the Notes of any series, three or more holders of the Notes of such
series or one or more holders of such Notes evidencing not less than 25% of the
aggregate outstanding principal balance of such Notes may, by written request to
the related Indenture Trustee, obtain access to the list of all Noteholders
maintained by such Indenture Trustee for the purpose of communicating with other
Noteholders with respect to their rights under the related Indenture or under
such Notes. Such Indenture Trustee may elect not to afford the requesting
Noteholders access to the list of Noteholders if it agrees to mail the desired
communication or proxy, on behalf of and at the expense of the requesting
Noteholders, to all Noteholders of such series.
Unless otherwise specified in the related Prospectus Supplement with
respect to the Certificates of any series, three or more holders of the
Certificates of such series or one or more holders of such Certificates
evidencing not less than 25% of the Certificate Balance of such Certificates
may, by written request to the related Trustee, obtain access to the list of all
Certificateholders maintained by such Trustee for the purpose of communicating
with other Certificateholders with respect to their rights under the related
Trust Agreement or Pooling and Servicing Agreement or under such Certificates.
REPORTS TO SECURITYHOLDERS
With respect to each series of Securities that includes Notes, on or prior
to each Payment Date, the Servicer will prepare and provide to the related
Indenture Trustee a statement to be delivered to the related Noteholders on such
Payment Date. With respect to each series of Securities, on or prior to each
Distribution Date, the Servicer will prepare and provide to the related Trustee
a statement to be delivered to the related Certificateholders. With respect to
each series of Securities, each such statement to be delivered to Noteholders
will include (to the extent applicable) the following information (and any other
information so specified in the related Prospectus Supplement) as to the Notes
of such series with respect to such Payment Date or the period since the
previous Payment Date, as applicable, and each such statement to be delivered to
Certificateholders will include (to the extent applicable) the following
information (and any other information so specified in the related Prospectus
Supplement) as to the Certificates of such series with respect to such
Distribution Date or the period since the previous Distribution Date, as
applicable:
(i) the amount of the distribution allocable to principal of each
class to such Notes and to the Certificate Balance of each class of such
Certificates, including, if applicable, the difference, if any (which may
be a positive or negative number) between the amount determined on such
date to be distributable to Noteholders and Certificateholders on account
of principal on the next preceding Payment Date and the amount actually
distributed to Noteholders and Certificateholders on account of
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principal on such Payment Date (the "Noteholders' Reconciliation Principal
Adjustment Amount" and "Certificateholders' Reconciliation Principal
Adjustment Amount, respectively);
(ii) the amount of the distribution allocable to interest on or with
respect to each class of Securities of such series;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the aggregate outstanding principal balance and the Note Pool
Factor for each class of such Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of such Certificates, each after
giving effect to all payments reported under clause (i) above on such date;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period or Collection Periods, as the case may be;
(vi) the Interest Rate or Pass Through Rate for the next period for
any class of Notes or Certificates of such series with variable or
adjustable rates;
(vii) the amount of the aggregate realized losses, if any, for the
second preceding Collection Period;
(viii) the Noteholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, the Certificateholders' Interest Carryover
Shortfall and the Certificateholders' Principal Carryover Shortfall (each
as defined in the related Prospectus Supplement), if any, in each case as
applicable to each class of Securities, and the change in such amounts from
the preceding statement;
(ix) the aggregate Purchase Amounts for receivables, if any, that were
repurchased in such Collection Period;
(x) the balance of the Reserve Account (if any) on such date, after
giving effect to changes therein on such date;
(xi) for each such date during the Funding Period (if any), the
remaining Pre-Funded Amount; and
(xii) for the first such date that is on or immediately following the
end of the Funding Period (if any), the amount of any remaining Pre-Funded
Amount that has not been used to fund the purchase of Subsequent
Receivables and is being passed through as payments of principal on the
Securities of such series.
Each amount set forth pursuant to subclauses (i), (ii), (v) and (viii) with
respect to the Notes or the Certificates of any series will be expressed as a
dollar amount per $1,000 of the initial principal balance of such Notes or the
initial Certificate Balance of such Certificates, as applicable.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of each Trust, the Applicable Trustee
will mail to each person who at any time during such calendar year has been a
Securityholder with respect to such Trust and received any payment thereon a
statement containing certain information for the purposes of such
Securityholder's preparation of federal income tax returns. See "Certain Federal
Income Tax Consequences".
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of each Sale and Servicing
Agreement or Pooling and Servicing Agreement pursuant to which a Trust will
purchase Receivables from the Seller and the Servicer will agree to service such
Receivables, each Trust Agreement (in the case of a grantor trust, the Pooling
and Servicing Agreement) pursuant to which a Trust will be created and
Certificates will be issued and each Administration Agreement pursuant to which
CCC will undertake certain administrative duties with respect to a Trust that
issues Notes (collectively, the "Transfer and Servicing Agreements"). Forms of
the Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement of which this Prospectus
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forms a part. This summary does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all the provisions of the
Transfer and Servicing Agreements.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified with respect to any given Trust in the
related Prospectus Supplement (the "Closing Date"), the Seller will, if so
specified in such Prospectus Supplement, transfer and assign to the applicable
Trustee, without recourse, pursuant to a Sale and Servicing Agreement or a
Pooling and Servicing Agreement, as applicable, its entire interest in the
Initial Receivables, if any, of the related Receivables Pool, including its
security interests in the related Financed Vehicles. Each such Receivable will
be identified in a schedule appearing as an exhibit to such Pooling and
Servicing Agreement or Sale and Servicing Agreement (a "Schedule of
Receivables"). The applicable Trustee will, concurrently with such transfer and
assignment, execute and deliver the related Notes and/or Certificates. Unless
otherwise provided in the related Prospectus Supplement, the net proceeds
received from the sale of the Certificates and the Notes of a given series will
be applied to the purchase of the related Receivables from the Seller and, to
the extent specified in the related Prospectus Supplement, to the deposit of the
Pre-Funded Amount into the Pre-Funding Account. The related Prospectus
Supplement for a given Trust will specify whether, and the terms, conditions and
manner under which, Subsequent Receivables will be sold by the Seller to the
applicable Trust from time to time during any Funding Period on each date
specified as a transfer date in the related Prospectus Supplement (each, a
"Subsequent Transfer Date").
In each Sale and Servicing Agreement or Pooling and Servicing Agreement,
the Seller will represent and warrant to the applicable Trust, among other
things, that: (i) the information provided in the related Schedule of
Receivables is correct in all material respects; (ii) the Obligor on each
related Receivable is required to maintain physical damage insurance covering
the Financed Vehicle in accordance with the Seller's normal requirements; (iii)
as of the applicable Closing Date or the applicable Subsequent Transfer Date, if
any, to the best of its knowledge, the related Receivables are free and clear of
all security interests, liens, charges and encumbrances and no offsets, defenses
or counterclaims have been asserted or threatened; (iv) as of the Closing Date
or the applicable Subsequent Transfer Date, if any, each of such Receivables is
or will be secured by a first perfected security interest in favor of the Seller
in the Financed Vehicle; (v) each related Receivable, at the time it was
originated, complied and, as of the Closing Date or the applicable Subsequent
Transfer Date, if any, complies in all material respects with applicable federal
and state laws, including, without limitation, consumer credit, truth in
lending, equal credit opportunity and disclosure laws; and (vi) any other
representations and warranties that may be set forth in the related Prospectus
Supplement.
Unless otherwise provided in the related Prospectus Supplement, as of the
last day of the second (or, if the Seller elects, the first) month following the
discovery by or notice to the Seller of a breach of any representation or
warranty of the Seller that materially and adversely affects the interests of
the related Trust in any Receivable, the Seller, unless the breach is cured,
will repurchase such Receivable from such Trust at a price equal to the unpaid
principal balance owed by the Obligor thereof plus interest thereon at the
respective APR to the last day of the month of repurchase (the "Purchase
Amount"). The repurchase obligation constitutes the sole remedy available to the
Certificateholders or the Trustee and any Noteholders or Indenture Trustee in
respect of such Trust for any such uncured breach.
Pursuant to each Sale and Servicing Agreement or Pooling and Servicing
Agreement, to assure uniform quality in servicing the Receivables and to reduce
administrative costs, the Seller and each Trust will designate the Servicer as
custodian to maintain possession, as such Trust's agent, of the related motor
vehicle retail installment sale contracts and any other documents relating to
the Receivables. The Seller's and the Servicer's accounting records and computer
systems will reflect the sale and assignment of the related Receivables to the
applicable Trust, and Uniform Commercial Code ("UCC") financing statements
reflecting such sale and assignment will be filed.
ACCOUNTS
With respect to each Trust that issues Notes, the Servicer will establish
and maintain with the related Indenture Trustee one or more accounts, in the
name of the Indenture Trustee on behalf of the related
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Noteholders and Certificateholders, into which all payments made on or with
respect to the related Receivables will be deposited (the "Collection Account").
The Servicer will establish and maintain with such Indenture Trustee an account,
in the name of such Indenture Trustee on behalf of such Noteholders, into which
amounts released from the Collection Account and any Pre-Funding Account,
Reserve Account or other credit enhancement for payment to such Noteholders will
be deposited and from which all distributions to such Noteholders will be made
(the "Note Distribution Account"). The Servicer will establish and maintain with
the related Trustee an account, in the name of such Trustee on behalf of such
Certificateholders, into which amounts released from the Collection Account and
any Pre-Funding Account, Reserve Account or other credit or cash flow
enhancement for distribution to such Certificateholders will be deposited and
from which all distributions to such Certificateholders will be made (the
"Certificate Distribution Account"). With respect to each Trust that does not
issue Notes, the Servicer will also establish and maintain the Collection
Account and any other Trust Account in the name of the related Trustee on behalf
of the related Certificateholders.
If so provided in the related Prospectus Supplement, the Servicer will
establish for each series an additional account (the "Payahead Account"), in the
name of the related Indenture Trustee, into which, to the extent required by the
Sale and Servicing Agreement, early payments by or on behalf of Obligors on
Precomputed Receivables will be deposited until such time as the payment becomes
due. Until such time as payments are transferred from the Payahead Account to
the Collection Account, they will not constitute collected interest or collected
principal and will not be available for distribution to the applicable
Noteholders or Certificateholders. The Payahead Account will initially be
maintained with the applicable Indenture Trustee.
Any other accounts to be established with respect to a Trust, including any
Pre-Funding Account or any Reserve Account, will be described in the related
Prospectus Supplement.
For any series of Securities, funds in the Collection Account, the Note
Distribution Account and any Pre-Funding Account, Reserve Account and other
accounts identified as such in the related Prospectus Supplement (collectively,
the "Trust Accounts") will be invested as provided in the related Sale and
Servicing Agreement or Pooling and Servicing Agreement in Eligible Investments.
"Eligible Investments" are generally limited to investments acceptable to the
Rating Agencies rating such Securities as being consistent with the rating of
such Securities and may include motor vehicle retail sale contracts. Except as
described below or in the related Prospectus Supplement, Eligible Investments
are limited to obligations or securities that mature on or before the date of
the next distribution for such series. However, to the extent permitted by the
Rating Agencies, funds in any Reserve Account may be invested in securities that
will not mature prior to the date of the next distribution with respect to such
Certificates or Notes and will not be sold to meet any shortfalls. Thus, the
amount of cash in any Reserve Account at any time may be less than the balance
of the Reserve Account. If the amount required to be withdrawn from any Reserve
Account to cover shortfalls in collections on the related Receivables (as
provided in the related Prospectus Supplement) exceeds the amount of cash in the
Reserve Account, a temporary shortfall in the amounts distributed to the related
Noteholders or Certificateholders could result, which could, in turn, increase
the average life of the Notes or the Certificates of such series. Except as
otherwise specified in the related Prospectus Supplement, investment earnings on
funds deposited in the Trust Accounts, net of losses and investment expenses
(collectively, "Investment Earnings"), shall be deposited in the applicable
Collection Account on each Distribution Date or Payment Date and shall be
treated as collections of interest on the related Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade.
"Eligible Institution" means, with respect to a Trust, (a) the corporate trust
department of the related Indenture Trustee or the related Trustee, as
applicable, or (b) a depository institution organized under the laws of the
United States of America or any one
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of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), (i) which has either (A) a long-term unsecured debt rating
acceptable to the Rating Agencies or (B) a short-term unsecured debt rating or
certificate of deposit rating acceptable to the Rating Agencies and (ii) whose
deposits are insured by the FDIC.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due with
respect to the Receivables held by any Trust and will, consistent with the
related Sale and Servicing Agreement or Pooling and Servicing Agreement or,
follow such collection procedures as it follows with respect to comparable motor
vehicle retail installment sale contracts it services for itself or others.
Consistent with its normal procedures, the Servicer may, in its discretion,
arrange with the Obligor on a Receivable to extend or modify the payment
schedule, but no such arrangement will, for purposes of any Sale and Servicing
Agreement or Pooling and Servicing Agreement, modify the original due dates or
the amount of the scheduled payments or extend the final payment date of any
Receivable beyond the Final Scheduled Maturity Date (as such term is defined
with respect to any Receivables Pool in the related Prospectus Supplement). Some
of such arrangements may result in the Servicer purchasing the Receivable for
the Purchase Amount, while others may result in the Servicer making Advances.
The Servicer may sell the Financed Vehicle securing the respective Receivable at
public or private sale, or take any other action permitted by applicable law.
See "Certain Legal Aspects of the Receivables".
COLLECTIONS
With respect to each Trust, the Servicer will deposit all payments on the
related Receivables (from whatever source) and all proceeds of such Receivables
collected during each collection period specified in the related Prospectus
Supplement (each, a "Collection Period") into the related Collection Account
within two business days after receipt thereof. However, at any time that and
for so long as (i) CCC is the Servicer, (ii) there exists no Servicer Default
and (iii) each other condition to making deposits less frequently than daily as
may be specified by the Rating Agencies or set forth in the related Prospectus
Supplement is satisfied, the Servicer will not be required to deposit such
amounts into the Collection Account until on or before the applicable
Distribution Date or Payment Date. Pending deposit into the Collection Account,
collections may be invested by the Servicer at its own risk and for its own
benefit and will not be segregated from its own funds. If the Servicer were
unable to remit such funds, Securityholders might incur a loss. To the extent
set forth in the related Prospectus Supplement, the Servicer may, in order to
satisfy the requirements described above, obtain a letter of credit or other
security for the benefit of the related Trust to secure timely remittances of
collections on the related Receivables and payment of the aggregate Purchase
Amount with respect to Receivables purchased by the Servicer.
Collections on a Precomputed Receivable made during a Collection Period
shall be applied first to repay any outstanding Precomputed Advances made by the
Servicer with respect to such Receivable (as described below), and to the extent
that collections on a Precomputed Receivable during a Collection Period exceed
the outstanding Precomputed Advances, the collections shall then be applied to
the scheduled payment on such Receivable. If any collections remaining after the
scheduled payment is made are insufficient to prepay the Precomputed Receivable
in full, then, unless otherwise provided in the related Prospectus Supplement,
generally such remaining collections (the "Payaheads") shall be transferred to
and kept in the Payahead Account, until such later Collection Period as the
collections may be transferred to the Collection Account and applied either to
the scheduled payment or to prepay such Receivable in full.
ADVANCES
Unless otherwise provided in the related Prospectus Supplement, to the
extent the collections of interest and principal on a Precomputed Receivable
with respect to a Collection Period fall short of the respective scheduled
payment, the Servicer will make a Precomputed Advance of the shortfall. The
Servicer will be obligated to make a Precomputed Advance on a Precomputed
Receivable only to the extent that the Servicer, in its sole discretion, expects
to recoup such advance from subsequent collections or recoveries on such
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Receivable or other Precomputed Receivables in the related Receivables Pool. The
Servicer will deposit the Precomputed Advance in the applicable Collection
Account on or before the business day preceding the applicable Distribution Date
or Payment Date. The Servicer will recoup its Precomputed Advance from
subsequent payments by or on behalf of the respective Obligor or from insurance
or liquidation proceeds with respect to the Receivable and will release its
right to reimbursement in conjunction with its purchase of the Receivable as
Servicer, or, upon the determination that reimbursement from the preceding
sources is unlikely, will recoup its Precomputed Advance from any collections
made on other Precomputed Receivables in the related Receivables Pool.
Unless otherwise provided in the related Prospectus Supplement, on or
before the business day prior to each applicable Distribution Date or Payment
Date, the Servicer shall deposit into the related Collection Account as a Simple
Interest Advance an amount equal to the amount of interest that would have been
due on the related Simple Interest Receivables at their respective APRs for the
related Collection Period (assuming that such Simple Interest Receivables are
paid on their respective due dates) minus the amount of interest actually
received on such Simple Interest Receivables during the related Collection
Period. If such calculation results in a negative number, an amount equal to
such amount shall be paid to the Servicer in reimbursement of outstanding Simple
Interest Advances. In addition, in the event that a Simple Interest Receivable
becomes a Liquidated Receivable (as such term is defined in the related
Prospectus Supplement), the amount of accrued and unpaid interest thereon (but
not including interest for the then current Collection Period) shall be
withdrawn from the Collection Account and paid to the Servicer in reimbursement
of outstanding Simple Interest Advances. No advances of principal will be made
with respect to Simple Interest Receivables. As used herein, "Advances" means
both Precomputed Advances and Simple Interest Advances.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the Prospectus Supplement with respect to any
Trust, the Servicer will be entitled to receive the Servicing Fee for each
Collection Period in an amount equal to specified percentage per annum (as set
forth in the related Prospectus Supplement, the "Servicing Fee Rate") of the
Pool Balance as of the first day of the related Collection Period (the
"Servicing Fee"). The Servicing Fee (together with any portion of the Servicing
Fee that remains unpaid from prior Distribution Dates or Payment Dates) will be
paid solely to the extent of the Interest Distribution Amount. However, the
Servicing Fee will be paid prior to the distribution of any portion of the
Interest Distribution Amount to the Noteholders or the Certificateholders of the
given series.
Unless otherwise provided in the related Prospectus Supplement with respect
to a given Trust, the Servicer will also collect and retain any late fees,
prepayment charges and other administrative fees or similar charges allowed by
applicable law with respect to the related Receivables and will be entitled to
reimbursement from such Trust for certain liabilities. Payments by or on behalf
of Obligors will be allocated to scheduled payments and late fees and other
charges in accordance with the Servicer's normal practices and procedures.
The Servicing Fee will compensate the Servicer for performing the functions
of a third party servicer of motor vehicle receivables as an agent for their
beneficial owner, including collecting and posting all payments, responding to
inquiries of Obligors on the Receivables, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to Obligors, paying costs
of collections and disposition of defaults and policing the collateral. The
Servicing Fee also will compensate the Servicer for administering the particular
Receivables Pool, including making Advances, accounting for collections and
furnishing monthly and annual statements to the related Trustee and Indenture
Trustee with respect to distributions and generating federal income tax
information for such Trust and for the related Noteholders and
Certificateholders. The Servicing Fee also will reimburse the Servicer for
certain taxes, the fees of the related Trustee and Indenture Trustee, if any,
accounting fees, outside auditor fees, data processing costs and other costs
incurred in connection with administering the applicable Receivables Pool.
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DISTRIBUTIONS
With respect to each series of Securities, beginning on the Payment Date or
Distribution Date, as applicable, specified in the related Prospectus
Supplement, distributions of principal and interest (or, where applicable, of
principal or interest only) on each class of such Securities entitled thereto
will be made by the Applicable Trustee to the Noteholders and the
Certificateholders of such series. The timing, calculation, allocation, order,
source, priorities of and requirements for all payments to each class of
Noteholders and all distributions to each class of Certificateholders of such
series will be set forth in the related Prospectus Supplement.
With respect to each Trust, on each Payment Date and Distribution Date, as
applicable, collections on the related Receivables will be transferred from the
Collection Account to the Note Distribution Account, if any, and the Certificate
Distribution Account for distribution to Noteholders, if any, and
Certificateholders to the extent provided in the related Prospectus Supplement.
Credit enhancement, such as a Reserve Account, will be available to cover any
shortfalls in the amount available for distribution on such date to the extent
specified in the related Prospectus Supplement. As more fully described in the
related Prospectus Supplement, and unless otherwise specified therein,
distributions in respect of principal of a class of Securities of a given series
will be subordinate to distributions in respect of interest on such class, and
distributions in respect of one or more classes of Certificates of such series
may be subordinate to payments in respect of Notes, if any, of such series or
other classes of Certificates of such series.
Allocation of Collections on Receivables; Reconciliation. Distributions of
principal on the Securities of a series may be based on the amount of principal
collected or due, or the amount of Realized Losses incurred, in a Collection
Period. Unless otherwise specified in a Prospectus Supplement, the amounts of
collections on the Receivables of a series that are allocable to interest and
principal, respectively, will first be estimated and then be reconciled in the
following manner with the following effect on the distributions on the related
Securities.
On the Business Day immediately preceding each Distribution Date or Payment
Date (a "Determination Date"), the Indenture Trustee, if any, or, otherwise, the
Trustee shall determine the amount in the Collection Account available for
distribution on the related Distribution Date or Payment Date (excluding amounts
retained in the Collection Account from prior periods, as described below). Such
amount shall be allocated first to interest based on the weighted average APR
and Pool Balance of the Receivables as of the first day of the related
Collection Period, plus an amount related to the investment earnings on amounts
contained in the Pre-Funding Account, if any, maintained with the Indenture
Trustee or the Trustee, as applicable, in accordance with the Sale and Servicing
Agreement, and then any remaining amount in the Collection Account shall be
allocated to principal. Payments to Securityholders shall be made on each
Distribution Date or Payment Date in accordance with such allocations, with
appropriate adjustments from the prior period as described below, together with
a payment notice setting forth the amount of such payment allocable to interest
and the amount allocable to principal, including, separately stated, the amount
attributable to any adjustment from the prior period. On each Determination Date
(other than the first Determination Date), the Servicer will provide the
Indenture Trustee or the Trustee, as applicable, with certain information with
respect to the Collection Period related to the prior Distribution Date or
Payment Date. On such current Determination Date or Payment Date, (i) the
amounts so allocated and distributed on the preceding Distribution Date or
Payment Date will be reconciled with the information provided by the Servicer on
the preceding Determination Date, (ii) amounts will be deposited in the Reserve
Account or held in the Collection Account, as appropriate, and (iii) reports
reflecting such reconciled amounts will be forwarded to Securityholders. If,
based on such reconciliation, the amounts distributed to Securityholders on
account of principal on the preceding Distribution Date or Payment Date were
less than the amounts required to be so distributed based on the reconciliation,
the amount of such deficiency shall be retained in the Collection Account for
distribution to Securityholders on such current Distribution Date or Payment
Date. If amounts were distributed to holders as principal in excess of amounts
allocable to principal based on such reconciliation, the amount of such excess
will be deducted from principal when calculating principal distributable on such
current Distribution Date or Payment Date. The payment of principal as described
above is not expected to have a material effect on the average life of any class
of Securities.
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CREDIT AND CASH FLOW ENHANCEMENT
The amounts and types of credit and cash flow enhancement arrangements and
the provider thereof, if applicable, with respect to each class of Securities of
a given series, if any, will be set forth in the related Prospectus Supplement.
If and to the extent provided in the related Prospectus Supplement, credit and
cash flow enhancement may be in the form of subordination of one or more classes
of Securities, Reserve Accounts, over-collateralization, letters of credit,
credit or liquidity facilities, surety bonds, guaranteed investment contracts,
swaps or other interest rate protection agreements, repurchase obligations,
yield supplement agreements, other agreements with respect to third party
payments or other support, cash deposits or such other arrangements as may be
described in the related Prospectus Supplement or any combination of two or more
of the foregoing. If specified in the applicable Prospectus Supplement, credit
or cash flow enhancement for a class of Securities may cover one or more other
classes of Securities of the same series, and credit or cash flow enhancement
for a series of Securities may cover one or more other series of Securities.
The presence of a Reserve Account and other forms of credit enhancement for
the benefit of any class or series of Securities is intended to enhance the
likelihood of receipt by the Securityholders of such class or series of the full
amount of principal and interest due thereon and to decrease the likelihood that
such Securityholders will experience losses. Unless otherwise specified in the
related Prospectus Supplement, the credit enhancement for a class or series of
Securities will not provide protection against all risks of loss and will not
guarantee repayment of the entire principal balance and interest thereon. If
losses occur which exceed the amount covered by any credit enhancement or which
are not covered by any credit enhancement, Securityholders of any class or
series will bear their allocable share of deficiencies, as described in the
related Prospectus Supplement. In addition, if a form of credit enhancement
covers more than one series of Securities, Securityholders of any such series
will be subject to the risk that such credit enhancement will be exhausted by
the claims of Securityholders of other series.
Reserve Account. If so provided in the related Prospectus Supplement,
pursuant to the related Sale and Servicing Agreement or Pool and Servicing
Agreement, the Seller will establish for a series or class of Securities an
account, as specified in the related Prospectus Supplement (the "Reserve
Account"), which will be maintained with the related Trustee or Indenture
Trustee, as applicable. Unless otherwise provided in the related Prospectus
Supplement, the Reserve Account will be funded by an initial deposit by the
Seller on the Closing Date in the amount set forth in the related Prospectus
Supplement and, if the related series has a Funding Period, will also be funded
on each Subsequent Transfer Date to the extent described in the related
Prospectus Supplement. As further described in the related Prospectus
Supplement, the amount on deposit in the Reserve Account will be increased on
each Distribution Date or Payment Date thereafter up to the Specified Reserve
Account Balance (as defined in the related Prospectus Supplement) by the deposit
therein of the amount of collections on the related Receivables remaining on
each such Distribution Date or Payment Date after the payment of all other
required payments and distributions on such date. The related Prospectus
Supplement will describe the circumstances and manner under which distributions
may be made out of the Reserve Account, either to holders of the Securities
covered thereby or to the applicable Company.
NET DEPOSITS
As an administrative convenience, unless the Servicer is required to remit
collections daily (see "-- Collections" above), the Servicer will be permitted
to make the deposit of collections, aggregate Advances and Purchase Amounts for
any Trust for or with respect to the related Collection Period net of
distributions to be made to the Servicer for such Trust with respect to such
Collection Period. The Servicer may cause to be made a single, net transfer from
the Collection Account to the related Payahead Account, if any, or vice versa.
The Servicer, however, will account to the Trustee, any Indenture Trustee, the
Noteholders, if any, and the Certificateholders with respect to each Trust as if
all deposits, distributions and transfers were made individually. With respect
to any Trust that issues both Certificates and Notes, if the related Payment
Dates do not coincide with Distribution Dates, all distributions, deposits or
other remittances made on a Payment Date will be treated as having been
distributed, deposited or remitted on the Distribution Date for the applicable
Collection Period for purposes of determining other amounts required to be
distributed, deposited or otherwise remitted on such Distribution Date.
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STATEMENTS TO TRUSTEES AND TRUST
Prior to each Distribution Date or Payment Date with respect to each series
of Securities, the Servicer will provide to the applicable Indenture Trustee, if
any, and the applicable Trustee as of the close of business on the last day of
the preceding Collection Period a statement setting forth substantially the same
information as is required to be provided in the periodic reports provided to
Securityholders of such series described under "Certain Information Regarding
the Securities -- Reports to Securityholders".
EVIDENCE AS TO COMPLIANCE
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that a firm of independent public accountants will furnish to the
related Trust and Indenture Trustee or Trustee, as applicable, annually a
statement as to compliance by the Servicer during the preceding twelve months
(or, in the case of the first such certificate, from the applicable Closing
Date) with certain standards relating to the servicing of the applicable
Receivables, the Servicer's accounting records and computer files with respect
thereto and certain other matters.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
also provide for delivery to the related Trust and Indenture Trustee or Trustee,
as applicable, substantially simultaneously with the delivery of such
accountants' statement referred to above, of a certificate signed by an officer
of the Servicer stating that the Servicer has fulfilled its obligations under
the Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, throughout the preceding twelve months (or, in the case of the first
such certificate, from the Closing Date) or, if there has been a default in the
fulfillment of any such obligation, describing each such default. The Servicer
has agreed to give each Indenture Trustee and each Trustee notice of certain
Servicer Defaults under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, as applicable.
Copies of such statements and certificates may be obtained by
Securityholders by a request in writing addressed to the Applicable Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that CCC may not resign from its obligations and duties as Servicer
thereunder, except upon determination that CCC's performance of such duties is
no longer permissible under applicable law. No such resignation will become
effective until the related Indenture Trustee or Trustee, as applicable, or a
successor servicer has assumed CCC's servicing obligations and duties under such
Sale and Servicing Agreement or Pooling and Servicing Agreement.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
further provide that neither the Servicer nor any of its directors, officers,
employees and agents will be under any liability to the related Trust or the
related Noteholders or Certificateholders for taking any action or for
refraining from taking any action pursuant to such Sale and Servicing Agreement
or Pooling and Servicing Agreement or for errors in judgment; except that
neither the Servicer nor any such person will be protected against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of the Servicer's duties thereunder or by reason
of reckless disregard of its obligations and duties thereunder. In addition,
each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that the Servicer is under no obligation to appear in, prosecute or
defend any legal action that is not incidental to the Servicer's servicing
responsibilities under such Sale and Servicing Agreement or Pooling and
Servicing Agreement and that, in its opinion, may cause it to incur any expense
or liability.
Under the circumstances specified in each Sale and Servicing Agreement and
Pooling and Servicing Agreement , any entity into which the Servicer may be
merged or consolidated, or any entity resulting from any merger or consolidation
to which the Servicer is a party, or any entity succeeding to the business of
the Servicer or, with respect to its obligations as Servicer, any corporation
50% or more of the voting stock of which is owned, directly or indirectly, by
Chrysler, which corporation or other entity in each of the foregoing cases
assumes the obligations of the Servicer, will be the successor of the Servicer
under such Sale and Servicing Agreement or Pooling and Servicing Agreement.
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SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement,
"Servicer Default" under each Sale and Servicing Agreement and Pooling and
Servicing Agreement will consist of (i) any failure by the Servicer to deliver
to the Applicable Trustee for deposit in any of the Trust Accounts or the
Certificate Distribution Account any required payment or to direct the
Applicable Trustee to make any required distributions therefrom, which failure
continues unremedied for three business days after written notice from the
Applicable Trustee is received by the Servicer or after discovery of such
failure by the Servicer; (ii) any failure by the Servicer or the Seller, as the
case may be, duly to observe or perform in any material respect any other
covenant or agreement in such Sale and Servicing Agreement or Pooling and
Servicing Agreement, which failure materially and adversely affects the rights
of the Noteholders or the Certificateholders of the related series and which
continues unremedied for 60 days after the giving of written notice of such
failure (A) to the Servicer or the Seller, as the case may be, by the Applicable
Trustee or such Owner Trustee or (B) to the Servicer or the Seller, as the case
may be, and to the Applicable Trustee and such Owner Trustee by holders of Notes
or Certificates of such series, as applicable, evidencing not less than 25% in
principal amount of such outstanding Notes or of such Certificate Balance; and
(iii) the occurrence of an Insolvency Event with respect to the Servicer, the
Seller or any related Company. "Insolvency Event" means, with respect to any
Person, any of the following events or actions: certain events of insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings with respect to such Person and certain actions by such Person
indicating its insolvency, reorganization pursuant to bankruptcy proceedings or
inability to pay its obligations.
RIGHTS UPON SERVICER DEFAULT
In the case of any Trust that has issued Notes, unless otherwise provided
in the related Prospectus Supplement, as long as a Servicer Default under a Sale
and Servicing Agreement remains unremedied, the related Indenture Trustee or
holders of Notes of the related series evidencing not less than 25% of principal
amount of such Notes then outstanding may terminate all the rights and
obligations of the Servicer under such Sale and Servicing Agreement, whereupon
such Indenture Trustee or a successor servicer appointed by such Indenture
Trustee will succeed to all the responsibilities, duties and liabilities of the
Servicer under such Sale and Servicing Agreement and will be entitled to similar
compensation arrangements. In the case of any Trust that has not issued Notes,
unless otherwise provided in the related Prospectus Supplement, as long as a
Servicer Default under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement remains unremedied, the related Trustee or holders of
Certificates of the related series evidencing not less than 25% of the principal
amount of such Certificates then outstanding may terminate all the rights and
obligations of the Servicer under such Sale and Servicing Agreement or Pooling
and Servicing Agreement, whereupon such Trustee or a successor servicer
appointed by such Trustee will succeed to all the responsibilities, duties and
liabilities of the Servicer under such Sale and Servicing Agreement or Pooling
and Servicing Agreement and will be entitled to similar compensation
arrangements. If, however, a bankruptcy trustee or similar official has been
appointed for the Servicer, and no Servicer Default other than such appointment
has occurred, such trustee or official may have the power to prevent such
Indenture Trustee, such Noteholders, such Trustee or such Certificateholders
from effecting a transfer of servicing. In the event that such Indenture Trustee
or Trustee is unwilling or unable to so act, it may appoint, or petition a court
of competent jurisdiction for the appointment of, a successor with a net worth
of at least $100,000,000 and whose regular business includes the servicing of
motor vehicle receivables. Such Indenture Trustee or Trustee may make such
arrangements for compensation to be paid, which in no event may be greater than
the servicing compensation to the Servicer under such Sale and Servicing
Agreement or Pooling and Servicing Agreement.
WAIVER OF PAST DEFAULTS
With respect to each Trust that has issued Notes, unless otherwise provided
in the related Prospectus Supplement, the holders of Notes evidencing at least a
majority in principal amount of the then outstanding Notes of the related series
(or the holders of the Certificates of such series evidencing not less than a
majority of the outstanding Certificate Balance, in the case of any Servicer
Default which does not adversely affect the
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related Indenture Trustee or such Noteholders) may, on behalf of all such
Noteholders and Certificateholders, waive any default by the Servicer in the
performance of its obligations under the related Sale and Servicing Agreement
and its consequences, except a Servicer Default in making any required deposits
to or payments from any of the Trust Accounts or to the Certificate Distribution
Account in accordance with such Sale and Servicing Agreement. With respect to
each Trust that has not issued Notes, holders of Certificates of such series
evidencing not less than a majority of the principal amount of such Certificates
then outstanding may, on behalf of all such Certificateholders, waive any
default by the Servicer in the performance of its obligations under the related
Sale and Servicing Agreement or Pooling and Servicing Agreement, except a
Servicer Default in making any required deposits to or payments from the
Certificate Distribution Account or the related Trust Accounts in accordance
with such Sale and Servicing Agreement or Pooling and Servicing Agreement. No
such waiver will impair such Noteholders' or Certificateholders' rights with
respect to subsequent defaults.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, each of the
Transfer and Servicing Agreements may be amended by the parties thereto, without
the consent of the related Noteholders or Certificateholders, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of such Transfer and Servicing Agreements or of modifying in any
manner the rights of such Noteholders or Certificateholders; provided that such
action will not, in the opinion of counsel satisfactory to the related Trustee
or Indenture Trustee, as applicable, materially and adversely affect the
interest of any such Noteholder or Certificateholder. Unless otherwise specified
in the related Prospectus Supplement, the Transfer and Servicing Agreements may
also be amended by the Seller, the Servicer, the related Trustee and any related
Indenture Trustee with the consent of the holders of Notes evidencing at least a
majority in principal amount of then outstanding Notes, if any, of the related
series and the holders of the Certificates of such series evidencing at least a
majority of the principal amount of such Certificates then outstanding, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of such Transfer and Servicing Agreements or of modifying in
any manner the rights of such Noteholders or Certificateholders; provided,
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
related Receivables or distributions that are required to be made for the
benefit of such Noteholders or Certificateholders or (ii) reduce the aforesaid
percentage of the Notes or Certificates of such series which are required to
consent to any such amendment, without the consent of the holders of all the
outstanding Notes or Certificates, as the case may be, of such series.
INSOLVENCY EVENT
With respect to a Trust that is not a grantor trust, if an Insolvency Event
occurs with respect to the Company of such Trust, the related Receivables of
such Trust will be liquidated and the Trust will be terminated 90 days after the
date of such Insolvency Event, unless, before the end of such 90-day period, the
related Trustee shall have received written instructions from (i) holders of
each class of the Certificates (other than such Company) with respect to such
Trust representing more than 50% of the aggregate unpaid principal amount of
each such class (not including the principal amount of such Certificates held by
such Company), (ii) holders of each class of Notes, if any, with respect to such
Trust representing more than 50% of the aggregate unpaid principal amount of
each such class and (iii) holders, if any, of certificates representing more
than 50% of the aggregate unpaid principal amount of certificates representing
interests in, or indebtedness secured by, final fixed value payments with
respect to the Fixed Value Receivables, if any, initially purchased by such
Company and subsequently added to such Trust (such certificates or indebtedness
being referred to herein as "Fixed Value Securities"), to the effect that each
such party disapproves of the liquidation of such Receivables and termination of
such Trust. Promptly after the occurrence of an Insolvency Event with respect to
such Company, notice thereof is required to be given to such Noteholders,
Certificateholders and holders of Fixed Value Securities; provided that any
failure to give such required notice will not prevent or delay termination of
such Trust. Upon termination of any Trust, the related Trustee shall, or shall
direct the related Indenture Trustee to, promptly sell the assets of such Trust
(other than the Trust Accounts and the Certificate
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Distribution Account) in a commercially reasonable manner and on commercially
reasonable terms. The proceeds from any such sale, disposition or liquidation of
the Receivables of such Trust will be treated as collections on such Receivables
and deposited in the related Collection Account. With respect to any Trust, if
the proceeds from the liquidation of the related Receivables and any amounts on
deposit in the Reserve Account (if any), the Payahead Account (if any), the Note
Distribution Account (if any) and the Certificate Distribution Account are not
sufficient to pay the Notes, if any, and the Certificates of the related series
in full, the amount of principal returned to Noteholders and Certificateholders
thereof will be reduced and some or all of such Noteholders and
Certificateholders will incur a loss.
Each Trust Agreement will provide that the applicable Trustee does not have
the power to commence a voluntary proceeding in bankruptcy with respect to the
related Trust without the unanimous prior approval of all Certificateholders
(including the applicable Company) of such Trust and the delivery to such
Trustee by each such Certificateholder (including such Company) of a certificate
certifying that such Certificateholder reasonably believes that such Trust is
insolvent.
PAYMENT OF NOTES
Upon the payment in full of all outstanding Notes of a given series and the
satisfaction and discharge of the related Indenture, the related Trustee will
succeed to all the rights of the Indenture Trustee, and the Certificateholders
of such series will succeed to all the rights of the Noteholders of such series,
under the related Sale and Servicing Agreement, except as otherwise provided
therein.
COMPANY LIABILITY
Under each Trust Agreement, the applicable Company with respect to the
related Trust will agree to be liable directly to an injured party for the
entire amount of any losses, claims, damages or liabilities (other than those
incurred by a Noteholder or a Certificateholder in the capacity of an investor
with respect to such Trust) arising out of or based on the arrangement created
by such Trust Agreement as though such arrangement created a partnership under
the Delaware Revised Uniform Limited Partnership Act in which such Company was a
general partner.
TERMINATION
With respect to each Trust, the obligations of the Servicer, the Seller,
the related Trustee and the related Indenture Trustee, if any, pursuant to the
Transfer and Servicing Agreements will terminate upon the earlier of (i) the
maturity or other liquidation of the last related Receivable and the disposition
of any amounts received upon liquidation of any such remaining Receivables, (ii)
the payment to Noteholders, if any, and Certificateholders of the related series
of all amounts required to be paid to them pursuant to the Transfer and
Servicing Agreements and (iii) the occurrence of either event described below.
Unless otherwise provided in the related Prospectus Supplement, in order to
avoid excessive administrative expense, the Servicer will be permitted at its
option to purchase from each Trust, as of the end of any applicable Collection
Period, if the then outstanding Pool Balance with respect to the Receivables
held by such Trust is 10% or less of the Initial Pool Balance (as defined in the
related Prospectus Supplement, the "Initial Pool Balance"), all remaining
related Receivables at a price equal to the aggregate of the Purchase Amounts
thereof as of the end of such Collection Period.
If and to the extent provided in the related Prospectus Supplement with
respect to a Trust, the Applicable Trustee will, within ten days following a
Distribution Date or Payment Date as of which the Pool Balance is equal to or
less than the percentage of the Initial Pool Balance specified in the related
Prospectus Supplement, solicit bids for the purchase of the Receivables
remaining in such Trust, in the manner and subject to the terms and conditions
set forth in such Prospectus Supplement. If the Applicable Trustee receives
satisfactory bids as described in such Prospectus Supplement, then the
Receivables remaining in such Trust will be sold to the highest bidder.
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As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the events specified above and the subsequent distribution to the
related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement or Pooling and Servicing Agreement
will effect early retirement of the Certificates of such series.
ADMINISTRATION AGREEMENT
CCC, in its capacity as administrator (the "Administrator"), will enter
into an agreement (as amended and supplemented from time to time, an
"Administration Agreement") with each Trust that issues Notes and the related
Indenture Trustee pursuant to which the Administrator will agree, to the extent
provided in such Administration Agreement, to provide the notices and to perform
other administrative obligations required by the related Indenture. Unless
otherwise specified in the related Prospectus Supplement with respect to any
such Trust, as compensation for the performance of the Administrator's
obligations under the applicable Administration Agreement and as reimbursement
for its expenses related thereto, the Administrator will be entitled to a
monthly administration fee in an amount equal to $200 per month, or such other
amount as may be set forth in the related Prospectus Supplement (the
"Administration Fee"), which fee will be paid by the Servicer.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In states in which retail installment sale contracts such as the
Receivables evidence the credit sale of automobiles and light duty trucks by
dealers to obligors, the contracts also constitute personal property security
agreements and include grants of security interests in the vehicles under the
applicable UCC. Perfection of security interests in the automobiles and light
duty trucks financed by the Seller is generally governed by the motor vehicle
registration laws of the state in which the vehicle is located. In all states in
which the Receivables have been originated, a security interest in automobiles
and light duty trucks is perfected by obtaining the certificate of title to the
Financed Vehicle or notation of the secured party's lien on the vehicles'
certificate of title (in addition, in Louisiana, a copy of the installment sale
contract must be filed with the appropriate governmental recording office).
The Servicer sells on a daily basis to the Seller, pursuant to a
pre-existing inter-company agreement, all motor vehicle retail installment sales
contracts that the Servicer originates or acquires from dealers. All of such
contracts originated or acquired by the Servicer name the Servicer as obligee or
assignee and as the secured party. The Servicer also takes all actions necessary
under the laws of the state in which the financed vehicle is located to perfect
the Servicer's security interest in the financed vehicle, including, where
applicable, having a notation of its lien recorded on such vehicle's certificate
of title. Because the Servicer continues to service the contracts, the obligors
on the contracts will not be notified of the sale from the Servicer to the
Seller or the sale from the Seller to the Trust, and no action will be taken to
record the transfer of the security interest from the Servicer to the Seller or
from the Seller to the Trust by amendment of the certificates of title for the
Financed Vehicles or otherwise.
With respect to each Trust, pursuant to the related Sale and Servicing
Agreement or Pooling and Servicing Agreement, the Seller will assign its
interests in the Financed Vehicles securing the related Receivables to such
Trust. However, because of the administrative burden and expense, none of the
Seller, the Servicer or the related Trustee will amend any certificate of title
to identify such Trust as the new secured party on such certificate of title
relating to a Financed Vehicle. Also, the Servicer will continue to hold any
certificates of title relating to the vehicles in its possession as custodian
for the Seller and such Trust pursuant to the related Sale and Servicing
Agreement or Pooling and Servicing Agreement. See "Description of the Transfer
and Servicing Agreements -- Sale and Assignment of Receivables".
In most states, an assignment such as that under each Sale and Servicing
Agreement or Pooling and Servicing Agreement is an effective conveyance of a
security interest without amendment of any lien noted on a vehicle's certificate
of title, and the assignee succeeds thereby to the assignor's rights as secured
party. However, by not identifying such Trust as the secured party on the
certificate of title, the security interest of such Trust in the vehicle could
be defeated through fraud or negligence. In such states, in the absence of fraud
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or forgery by the vehicle owner or the Servicer or administrative error by state
or local agencies, the notation of the Servicer's lien on the certificates of
title will be sufficient to protect such Trust against the rights of subsequent
purchasers of a Financed Vehicle or subsequent lenders who take a security
interest in a Financed Vehicle. If there are any Financed Vehicles as to which
the Servicer failed to obtain and assign to the Seller a perfected security
interest, the security interest of the Seller would be subordinate to, among
others, subsequent purchasers of the Financed Vehicles and holders of perfected
security interests. Such a failure, however, would constitute a breach of the
warranties of the Seller under the related Sale and Servicing Agreement or
Pooling and Servicing Agreement and would create an obligation of the Seller to
repurchase the related Receivable unless the breach is cured. Pursuant to each
Sale and Servicing Agreement and Pooling and Servicing Agreement, the Seller
will assign such rights to the related Trust. See "Description of the Transfer
and Servicing Agreements -- Sale and Assignment of Receivables" and "Special
Considerations -- Certain Legal Aspects -- Security Interests in Financed
Vehicles".
Under the laws of most states, the perfected security interest in a vehicle
would continue for four months after the vehicle is moved to a state other than
the state in which it is initially registered and thereafter until the owner
thereof re-registers the vehicle in the new state. A majority of states
generally require surrender of a certificate of title to re-register a vehicle.
Accordingly, a secured party must surrender possession if it holds the
certificate of title to the vehicle or, in the case of a vehicle registered in a
state providing for the notation of a lien on the certificate of title but not
possession by the secured party, the secured party would receive notice of
surrender if the security interest is noted on the certificate of title. Thus,
the secured party would have the opportunity to re-perfect its security interest
in the vehicle in the state of relocation. In states that do not require a
certificate of title for registration of a motor vehicle, re-registration could
defeat perfection. In the ordinary course of servicing motor vehicle
receivables, the Servicer takes steps to effect re-perfection upon receipt of
notice of re-registration or information from the obligor as to relocation.
Similarly, when an obligor sells a vehicle, the Servicer must surrender
possession of the certificate of title or will receive notice as a result of its
lien noted thereon and accordingly will have an opportunity to require
satisfaction of the related Receivable before release of the lien. Under each
Sale and Servicing Agreement and Pooling and Servicing Agreement, the Servicer
is obligated to take appropriate steps, at the Servicer's expense, to maintain
perfection of security interests in the Financed Vehicles and is obligated to
purchase the related Receivable if it fails to do so.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected security
interest in a financed vehicle. The Code also grants priority to certain federal
tax liens over the lien of a secured party. The laws of certain states and
federal law permit the confiscation of vehicles by governmental authorities
under certain circumstances if used in unlawful activities, which may result in
the loss of a secured party's perfected security interest in the confiscated
vehicle. Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, the Seller will represent to the related Trust that, as of the date
the related Receivable is sold to such Trust, each security interest in a
Financed Vehicle is or will be prior to all other present liens (other than tax
liens and other liens that arise by operation of law) upon and security
interests in such Financed Vehicle. However, liens for repairs or taxes could
arise, or the confiscation of a Financed Vehicle could occur, at any time during
the term of a Receivable. No notice will be given to the Trustee, any Indenture
Trustee, any Noteholders or the Certificateholders in respect of a given Trust
if such a lien arises or confiscation occurs.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the motor
vehicle retail installment sale contract has all the remedies of a secured party
under the UCC, except where specifically limited by other state laws. Among the
UCC remedies, the secured party has the right to perform self-help repossession
unless such act would constitute a breach of the peace. Self-help is the method
employed by the Servicer in most cases and is accomplished simply by retaking
possession of the financed vehicle. In the event of default by the obligor, some
jurisdictions require that the obligor be notified of the default and be given a
time period within which he may cure the default prior to repossession.
Generally, the right of reinstatement may be exercised on a limited number of
occasions in any one-year period. In cases where the obligor objects or raises a
defense to
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repossession, or if otherwise required by applicable state law, a court order
must be obtained from the appropriate state court, and the vehicle must then be
repossessed in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held. The
obligor has the right to redeem the collateral prior to actual sale by paying
the secured party the unpaid principal balance of the obligation plus reasonable
expenses for repossessing, holding and preparing the collateral for disposition
and arranging for its sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the unpaid
balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the vehicles generally will be applied first to
the expenses of resale and repossession and then to the satisfaction of the
indebtedness. While some states impose prohibitions or limitations on deficiency
judgments if the net proceeds from resale do not cover the full amount of the
indebtedness, a deficiency judgment can be sought in those states that do not
prohibit or limit such judgments. However, the deficiency judgment would be a
personal judgment against the obligor for the shortfall, and a defaulting
obligor can be expected to have very little capital or sources of income
available following repossession. Therefore, in many cases, it may not be useful
to seek a deficiency judgment or, if one is obtained, it may be settled at a
significant discount.
Occasionally, after resale of a vehicle and payment of all expenses and all
indebtedness, there is a surplus of funds. In that case, the UCC requires the
creditor to remit the surplus to any holder of a lien with respect to the
vehicle or if no such lienholder exists or there are remaining funds, the UCC
requires the creditor to remit the surplus to the former owner of the vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related regulations
impose substantial requirements upon lenders and servicers involved in consumer
finance. These laws include the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act,
the Fair Credit Reporting Act, the Fair Debt Collection Procedures Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z, the
Soldiers' and Sailors' Civil Relief Act of 1940, the Texas Consumer Credit Code,
state adoptions of the National Consumer Act and of the Uniform Consumer Credit
Code and state motor vehicle retail installment sales acts, retail installment
sales acts and other similar laws. Also, state laws impose finance charge
ceilings and other restrictions on consumer transactions and require contract
disclosures in addition to those required under federal law. These requirements
impose specific statutory liabilities upon creditors who fail to comply with
their provisions. In some cases, this liability could affect an assignee's
ability to enforce consumer finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade Commission
(the "FTC Rule"), the provisions of which are generally duplicated by the
Uniform Consumer Credit Code, other statutes or the common law, has the effect
of subjecting a seller in a consumer credit transaction (and certain related
creditors and their assignees) to all claims and defenses which the obligor in
the transaction could assert against the seller of the goods. Liability under
the FTC Rule is limited to the amounts paid by the obligor under the contract
and the holder of the contract may also be unable to collect any balance
remaining due thereunder from the obligor.
Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, each Trust, as holder of the related Receivables, will be
subject to any claims or defenses that the purchaser of the applicable Financed
Vehicle may assert against the seller of the Financed Vehicle. Such claims are
limited to a maximum liability equal to the amounts paid by the Obligor on the
Receivable. If an Obligor were successful in asserting any such claim or
defense, such claim or defense would constitute a breach of the Seller's
warranties under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement and would
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create an obligation of the Seller to repurchase the Receivable unless the
breach is cured. See "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables".
Courts have applied general equitable principles to secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the United
States. Courts have generally upheld the notice provisions of the UCC and
related laws as reasonable or have found that the repossession and resale by the
creditor do not involve sufficient state action to afford constitutional
protection to borrowers.
Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, the Seller will warrant to the related Trust that each Receivable
complies with all requirements of law in all material respects. Accordingly, if
an Obligor has a claim against such Trust for violation of any law and such
claim materially and adversely affects such Trust's interest in a Receivable,
such violation would constitute a breach of the warranties of the Seller under
such Sale and Servicing Agreement or Pooling and Servicing Agreement and would
create an obligation of the Seller to repurchase the Receivable unless the
breach is cured. See "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables".
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured party
to realize upon collateral or to enforce a deficiency judgment. For example, in
a Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a
creditor from repossessing a vehicle, and, as part of the rehabilitation plan,
reduce the amount of the secured indebtedness to the market value of the vehicle
at the time of bankruptcy (as determined by the court), leaving the creditor as
a general unsecured creditor for the remainder of the indebtedness. A bankruptcy
court may also reduce the monthly payments due under a contract or change the
rate of interest and time of repayment of the indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain federal income tax
consequences of the purchase, ownership and disposition of the Notes and the
Certificates. The summary does not purport to deal with federal income tax
consequences applicable to all categories of holders, some of which may be
subject to special rules. For example, it does not discuss the tax treatment of
Noteholders or Certificateholders that are insurance companies, regulated
investment companies or dealers in securities. Moreover, there are no cases or
Internal Revenue Service ("IRS") rulings on similar transactions involving both
debt and equity interests issued by a trust with terms similar to those of the
Notes and the Certificates. As a result, the IRS may disagree with all or a part
of the discussion below. Prospective investors are urged to consult their own
tax advisors in determining the federal, state, local, foreign and any other tax
consequences to them of the purchase, ownership and disposition of the Notes and
the Certificates.
The following summary is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and judicial or ruling authority, all of which are
subject to change, which change may be retroactive. Each Trust will be provided
with an opinion of special Federal tax counsel to each Trust specified in the
related Prospectus Supplement ("Federal Tax Counsel"), regarding certain federal
income tax matters discussed below. An opinion of Federal Tax Counsel, however,
is not binding on the IRS or the courts. No ruling on any of the issues
discussed below will be sought from the IRS. For purposes of the following
summary, references to the Trust, the Notes, the Certificates and related terms,
parties and documents shall be deemed to refer, unless otherwise specified
herein, to each Trust and the Notes, Certificates and related terms, parties and
documents applicable to such Trust.
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The federal income tax consequences to Certificateholders will vary
depending on whether an election is made to treat the Trust as a partnership
under the Code or whether the Trust will be treated as a grantor trust. The
Prospectus Supplement for each Series of Certificates will specify whether a
partnership election will be made or the Trust will be treated as a grantor
trust.
TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE
TAX CHARACTERIZATION OF THE TRUST AS A PARTNERSHIP
Federal Tax Counsel will deliver its opinion that a Trust for which a
partnership election is made will not be an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes. This
opinion will be based on the assumption that the terms of the Trust Agreement
and related documents will be complied with, and on counsel's conclusions that
(1) the Trust will not have certain characteristics necessary for a business
trust to be classified as an association taxable as a corporation and (2) the
nature of the income of the Trust will exempt it from the rule that certain
publicly traded partnerships are taxable as corporations.
If the Trust were taxable as a corporation for federal income tax purposes,
the Trust would be subject to corporate income tax on its taxable income. The
Trust's taxable income would include all its income on the Receivables, possibly
reduced by its interest expense on the Notes. Any such corporate income tax
could materially reduce cash available to make payments on the Notes and
distributions on the Certificates, and Certificateholders could be liable for
any such tax that is unpaid by the Trust.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Federal Tax Counsel will, except as otherwise
provided in the related Prospectus Supplement, advise the Trust that the Notes
will be classified as debt for federal income tax purposes. The discussion below
assumes this characterization of the Notes is correct.
OID, Indexed Securities, etc. The discussion below assumes that all
payments on the Notes are denominated in U.S. dollars, and that the Notes are
not Indexed Securities or Strip Notes. Moreover, the discussion assumes that the
interest formula for the Notes meets the requirements for "qualified stated
interest" under Treasury regulations (the "OID regulations") relating to
original issue discount ("OID"), and that any OID on the Notes (i.e., any excess
of the principal amount of the Notes over their issue price) does not exceed a
de minimis amount (i.e., 1/4% of their principal amount multiplied by the
number of full years included in their term), all within the meaning of the OID
regulations. If these conditions are not satisfied with respect to any given
series of Notes, additional tax considerations with respect to such Notes will
be disclosed in the applicable Prospectus Supplement.
Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the Notes will not be considered issued
with OID. The stated interest thereon will be taxable to a Noteholder as
ordinary interest income when received or accrued in accordance with such
Noteholder's method of tax accounting. Under the OID regulations, a holder of a
Note issued with a de minimis amount of OID must include such OID in income, on
a pro rata basis, as principal payments are made on the Note. It is believed
that any prepayment premium paid as a result of a mandatory redemption will be
taxable as contingent interest when it becomes fixed and unconditionally
payable. A purchaser who buys a Note for more or less than its principal amount
will generally be subject, respectively, to the premium amortization or market
discount rules of the Code.
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A holder of a Note that has a fixed maturity date of not more than one year
from the issue date of such Note (a "Short-Term Note") may be subject to special
rules. An accrual basis holder of a Short-Term Note (and certain cash method
holders, including regulated investment companies, as set forth in Section 1281
of the Code) generally would be required to report interest income as interest
accrues on a straight-line basis over the term of each interest period. Other
cash basis holders of a Short-Term Note would, in general, be required to report
interest income as interest is paid (or, if earlier, upon the taxable
disposition of the Short-Term Note). However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may be required to defer
a portion of any interest expense otherwise deductible on indebtedness incurred
to purchase or carry the Short-Term Note until the taxable disposition of the
Short-Term Note. A cash basis taxpayer may elect under Section 1281 of the Code
to accrue interest income on all nongovernment debt obligations with a term of
one year or less, in which case the taxpayer would include interest on the
Short-Term Note in income as it accrues, but would not be subject to the
interest expense deferral rule referred to in the preceding sentence. Certain
special rules apply if a Short-Term Note is purchased for more or less than its
principal amount.
Sale or Other Disposition. If a Noteholder sells a Note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder will equal the holder's
cost for the Note, increased by any market discount, acquisition discount, OID
and gain previously included by such Noteholder in income with respect to the
Note and decreased by the amount of bond premium (if any) previously amortized
and by the amount of principal payments previously received by such Noteholder
with respect to such Note. Any such gain or loss will be capital gain or loss if
the Note was held as a capital asset, except for gain representing accrued
interest and accrued market discount not previously included in income. Capital
losses generally may be used only to offset capital gains.
Foreign Holders. Interest payments made (or accrued) to a Noteholder who
is a nonresident alien, foreign corporation or other non-United States person (a
"foreign person") generally will be considered "portfolio interest", and
generally will not be subject to United States federal income tax and
withholding tax, if the interest is not effectively connected with the conduct
of a trade or business within the United States by the foreign person and the
foreign person (i) is not actually or constructively a "10 percent shareholder"
of the Trust or the Seller (including a holder of 10% of the outstanding
Certificates) or a "controlled foreign corporation" with respect to which the
Trust or the Seller is a "related person" within the meaning of the Code and
(ii) provides the Owner Trustee or other person who is otherwise required to
withhold U.S. tax with respect to the Notes with an appropriate statement (on
Form W-8 or a similar form), signed under penalties of perjury, certifying that
the beneficial owner of the Note is a foreign person and providing the foreign
person's name and address. If a Note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide the relevant signed statement to the withholding agent;
in that case, however, the signed statement must be accompanied by a Form W-8 or
substitute form provided by the foreign person that owns the Note. If such
interest is not portfolio interest, then it will be subject to United States
federal income and withholding tax at a rate of 30 percent, unless reduced or
eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) such gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days or
more in the taxable year.
Backup Withholding. Each holder of a Note (other than an exempt holder
such as a corporation, tax-exempt organization, qualified pension and
profit-sharing trust, individual retirement account or nonresident alien who
provides certification as to status as a nonresident) will be required to
provide, under penalties of perjury, a certificate containing the holder's name,
address, correct federal taxpayer identification number and
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a statement that the holder is not subject to backup withholding. Should a
nonexempt Noteholder fail to provide the required certification, the Trust will
be required to withhold 31 percent of the amount otherwise payable to the
holder, and remit the withheld amount to the IRS as a credit against the
holder's federal income tax liability.
Possible Alternative Treatments of the Notes. If, contrary to the opinion
of Federal Tax Counsel, the IRS successfully asserted that one or more of the
Notes did not represent debt for federal income tax purposes, the Notes might be
treated as equity interests in the Trust. If so treated, the Trust might be
taxable as a corporation with the adverse consequences described above (and the
taxable corporation would not be able to reduce its taxable income by deductions
for interest expense on Notes recharacterized as equity). Alternatively, and
most likely in the view of Federal Tax Counsel, the Trust might be treated as a
publicly traded partnership that would not be taxable as a corporation because
it would meet certain qualifying income tests. Nonetheless, treatment of the
Notes as equity interests in such a publicly traded partnership could have
adverse tax consequences to certain holders. For example, income to certain
tax-exempt entities (including pension funds) would be "unrelated business
taxable income", income to foreign holders generally would be subject to U.S.
tax and U.S. tax return filing and withholding requirements, and individual
holders might be subject to certain limitations on their ability to deduct their
share of Trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES
Treatment of the Trust as a Partnership. The Seller and the Servicer will
agree, and the Certificateholders will agree by their purchase of Certificates,
to treat the Trust as a partnership for purposes of federal and state income
tax, franchise tax and any other tax measured in whole or in part by income,
with the assets of the partnership being the assets held by the Trust, the
partners of the partnership being the Certificateholders (including the Company
in its capacity as recipient of distributions from the Reserve Account), and the
Notes being debt of the partnership. However, the proper characterization of the
arrangement involving the Trust, the Certificates, the Notes, the Seller, the
Company and the Servicer is not clear because there is no authority on
transactions closely comparable to that contemplated herein.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Company or the Trust. Any such
characterization would not result in materially adverse tax consequences to
Certificateholders as compared to the consequences from treatment of the
Certificates as equity in a partnership, described below. The following
discussion assumes that the Certificates represent equity interests in a
partnership.
Indexed Securities, etc. The following discussion assumes that all
payments on the Certificates are denominated in U.S. dollars, none of the
Certificates are Indexed Securities or Strip Certificates, and that a series of
Securities includes a single class of Certificates. If these conditions are not
satisfied with respect to any given series of Certificates, additional tax
considerations with respect to such Certificates will be disclosed in the
applicable Prospectus Supplement.
Partnership Taxation. As a partnership, the Trust will not be subject to
federal income tax. Rather, each Certificateholder will be required to
separately take into account such holder's allocated share of income, gains,
losses, deductions and credits of the Trust. The Trust's income will consist
primarily of interest and finance charges earned on the Receivables (including
appropriate adjustments for market discount, OID and bond premium) and any gain
upon collection or disposition of Receivables. The Trust's deductions will
consist primarily of interest accruing with respect to the Notes, servicing and
other fees, and losses or deductions upon collection or disposition of
Receivables.
The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (here, the
Trust Agreement and related documents). The Trust Agreement will provide, in
general, that the Certificateholders will be allocated taxable income of the
Trust for each month equal to the sum of (i) the interest that accrues on the
Certificates in accordance with their terms for such month, including interest
accruing at the Pass Through Rate for such month and interest on amounts
previously due on the Certificates but not yet distributed; (ii) any Trust
income attributable to discount on the Receivables that corresponds to any
excess of the principal amount of the Certificates over their initial issue
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price; (iii) prepayment premium payable to the Certificateholders for such
month; and (iv) any other amounts of income payable to the Certificateholders
for such month. Such allocation will be reduced by any amortization by the Trust
of premium on Receivables that corresponds to any excess of the issue price of
Certificates over their principal amount. All remaining taxable income of the
Trust will be allocated to the Company. Based on the economic arrangement of the
parties, this approach for allocating Trust income should be permissible under
applicable Treasury regulations, although no assurance can be given that the IRS
would not require a greater amount of income to be allocated to
Certificateholders. Moreover, even under the foregoing method of allocation,
Certificateholders may be allocated income equal to the entire Pass Through Rate
plus the other items described above even though the Trust might not have
sufficient cash to make current cash distributions of such amount. Thus, cash
basis holders will in effect be required to report income from the Certificates
on the accrual basis and Certificateholders may become liable for taxes on Trust
income even if they have not received cash from the Trust to pay such taxes. In
addition, because tax allocations and tax reporting will be done on a uniform
basis for all Certificateholders but Certificateholders may be purchasing
Certificates at different times and at different prices, Certificateholders may
be required to report on their tax returns taxable income that is greater or
less than the amount reported to them by the Trust.
All of the taxable income allocated to a Certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated business
taxable income" generally taxable to such a holder under the Code.
An individual taxpayer's share of expenses of the Trust (including fees to
the Servicer but not interest expense) would be miscellaneous itemized
deductions. Such deductions might be disallowed to the individual in whole or in
part and might result in such holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to such holder over the life of
the Trust.
The Trust intends to make all tax calculations relating to income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the Trust
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on Certificateholders.
Discount and Premium. It is believed that the Receivables were not issued
with OID, and, therefore, the Trust should not have OID income. However, the
purchase price paid by the Trust for the Receivables may be greater or less than
the remaining principal balance of the Receivables at the time of purchase. If
so, the Receivables will have been acquired at a premium or discount, as the
case may be. (As indicated above, the Trust will make this calculation on an
aggregate basis, but might be required to recompute it on a
Receivable-by-Receivable basis.)
If the Trust acquires the Receivables at a market discount or premium, the
Trust will elect to include any such discount in income currently as it accrues
over the life of the Receivables or to offset any such premium against interest
income on the Receivables. As indicated above, a portion of such market discount
income or premium deduction may be allocated to Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. If such a termination occurs, the Trust will be considered to
distribute its assets to the partners, who would then be treated as
recontributing those assets to the Trust, as a new partnership. The Trust will
not comply with certain technical requirements that might apply when such a
constructive termination occurs. As a result, the Trust may be subject to
certain tax penalties and may incur additional expenses if it is required to
comply with those requirements. Furthermore, the Trust might not be able to
comply due to lack of data.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Certificates sold.
A Certificateholder's tax basis in a Certificate will generally equal the
holder's cost increased by the holder's share of Trust income (includible in
income) and decreased by any distributions received with respect to such
Certificate. In addition, both the tax basis in the Certificates and the amount
realized on a sale of a
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Certificate would include the holder's share of the Notes and other liabilities
of the Trust. A holder acquiring Certificates at different prices may be
required to maintain a single aggregate adjusted tax basis in such Certificates,
and, upon sale or other disposition of some of the Certificates, allocate a
portion of such aggregate tax basis to the Certificates sold (rather than
maintaining a separate tax basis in each Certificate for purposes of computing
gain or loss on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the holder's share of
unrecognized accrued market discount on the Receivables would generally be
treated as ordinary income to the holder and would give rise to special tax
reporting requirements. The Trust does not expect to have any other assets that
would give rise to such special reporting requirements. Thus, to avoid those
special reporting requirements, the Trust will elect to include market discount
in income as it accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess will generally give rise to
a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined monthly and the tax items for a
particular calendar month will be apportioned among the Certificateholders in
proportion to the principal amount of Certificates owned by them as of the close
of the last day of such month. As a result, a holder purchasing Certificates may
be allocated tax items (which will affect its tax liability and tax basis)
attributable to periods before the actual transaction.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the Trust might be reallocated among the Certificateholders. The Company is
authorized to revise the Trust's method of allocation between transferors and
transferees to conform to a method permitted by future regulations.
Section 754 Election. In the event that a Certificateholder sells its
Certificates at a profit (loss), the purchasing Certificateholder will have a
higher (lower) basis in the Certificates than the selling Certificateholder had.
The tax basis of the Trust's assets will not be adjusted to reflect that higher
(or lower) basis unless the Trust were to file an election under Section 754 of
the Code. In order to avoid the administrative complexities that would be
involved in keeping accurate accounting records, as well as potentially onerous
information reporting requirements, the Trust will not make such election. As a
result, Certificateholders might be allocated a greater or lesser amount of
Trust income than would be appropriate based on their own purchase price for
Certificates.
Administrative Matters. The Owner Trustee is required to keep or have kept
complete and accurate books of the Trust. Such books will be maintained for
financial reporting and tax purposes on an accrual basis and the fiscal year of
the Trust will be the calendar year. The Trustee will file a partnership
information return (IRS Form 1065) with the IRS for each taxable year of the
Trust and will report each Certificateholder's allocable share of items of Trust
income and expense to holders and the IRS on Schedule K-1. The Trust will
provide the Schedule K-1 information to nominees that fail to provide the Trust
with the information statement described below and such nominees will be
required to forward such information to the beneficial owners of the
Certificates. Generally, holders must file tax returns that are consistent with
the information return filed by the Trust or be subject to penalties unless the
holder notifies the IRS of all such inconsistencies.
Under Section 6031 of the Code, any person that holds Certificates as a
nominee at any time during a calendar year is required to furnish the Trust with
a statement containing certain information on the nominee, the beneficial owners
and the Certificates so held. Such information includes (i) the name, address
and taxpayer identification number of the nominee and (ii) as to each beneficial
owner (x) the name, address and identification number of such person, (y)
whether such person is a United States person, a tax-exempt entity or a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, and (z) certain information on
Certificates that were held, bought or sold on behalf of such
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person throughout the year. In addition, brokers and financial institutions that
hold Certificates through a nominee are required to furnish directly to the
Trust information as to themselves and their ownership of Certificates. A
clearing agency registered under Section 17A of the Exchange Act is not required
to furnish any such information statement to the Trust. The information referred
to above for any calendar year must be furnished to the Trust on or before the
following January 31. Nominees, brokers and financial institutions that fail to
provide the Trust with the information described above may be subject to
penalties.
The Company will be designated as the tax matters partner in the related
Trust Agreement and, as such, will be responsible for representing the
Certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the Trust by the appropriate taxing authorities could
result in an adjustment of the returns of the Certificateholders, and, under
certain circumstances, a Certificateholder may be precluded from separately
litigating a proposed adjustment to the items of the Trust. An adjustment could
also result in an audit of a Certificateholder's returns and adjustments of
items not related to the income and losses of the Trust.
Tax Consequences to Foreign Certificateholders. It is not clear whether
the Trust would be considered to be engaged in a trade or business in the United
States for purposes of federal withholding taxes with respect to non-U.S.
persons because there is no clear authority dealing with that issue under facts
substantially similar to those described herein. Although it is not expected
that the Trust would be engaged in a trade or business in the United States for
such purposes, the Trust will withhold as if it were so engaged in order to
protect the Trust from possible adverse consequences of a failure to withhold.
The Trust expects to withhold on the portion of its taxable income that is
allocable to foreign Certificateholders pursuant to Section 1446 of the Code, as
if such income were effectively connected to a U.S. trade or business, at a rate
of 35% for foreign holders that are taxable as corporations and 39.6% for all
other foreign holders. Subsequent adoption of Treasury regulations or the
issuance of other administrative pronouncements may require the Trust to change
its withholding procedures. In determining a holder's withholding status, the
Trust may rely on IRS Form W-8, IRS Form W-9 or the holder's certification of
nonforeign status signed under penalties of perjury.
Each foreign holder might be required to file a U.S. individual or
corporate income tax return (including, in the case of a corporation, the branch
profits tax) on its share of the Trust's income. Each foreign holder must obtain
a taxpayer identification number from the IRS and submit that number to the
Trust on Form W-8 in order to assure appropriate crediting of the taxes
withheld. A foreign holder generally would be entitled to file with the IRS a
claim for refund with respect to taxes withheld by the Trust, taking the
position that no taxes were due because the Trust was not engaged in a U.S.
trade or business. However, interest payments made (or accrued) to a
Certificateholder who is a foreign person generally will be considered
guaranteed payments to the extent such payments are determined without regard to
the income of the Trust. If these interest payments are properly characterized
as guaranteed payments, then the interest will not be considered "portfolio
interest." As a result, Certificateholders will be subject to United States
federal income tax and withholding tax at a rate of 30 percent, unless reduced
or eliminated pursuant to an applicable treaty. In such case, a foreign holder
would only be entitled to claim a refund for that portion of the taxes in excess
of the taxes that should be withheld with respect to the guaranteed payments.
Backup Withholding. Distributions made on the Certificates and proceeds
from the sale of the Certificates will be subject to a "backup" withholding tax
of 31% if, in general, the Certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code.
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TRUSTS TREATED AS GRANTOR TRUSTS
TAX CHARACTERIZATION OF THE TRUST AS A GRANTOR TRUST
If a partnership election is not made, Federal Tax Counsel will deliver its
opinion that the Trust will not be classified as an association taxable as a
corporation and that such Trust will be classified as a grantor trust under
subpart E, Part I of subchapter J of the Code. In this case, owners of
Certificates (referred to herein as "Grantor Trust Certificateholders") will be
treated for federal income tax purposes as owners of a portion of the Trust's
assets as described below. The Certificates issued by a Trust that is treated as
a grantor trust are referred to herein as "Grantor Trust Certificates".
Characterization. Each Grantor Trust Certificateholder will be treated as
the owner of a pro rata undivided interest in the interest and principal
portions of the Trust represented by the Grantor Trust Certificates and will be
considered the equitable owner of a pro rata undivided interest in each of the
Receivables in the Trust. Any amounts received by a Grantor Trust
Certificateholder in lieu of amounts due with respect to any Receivable because
of a default or delinquency in payment will be treated for federal income tax
purposes as having the same character as the payments they replace.
Each Grantor Trust Certificateholder will be required to report on its
federal income tax return in accordance with such Grantor Trust
Certificateholder's method of accounting its pro rata share of the entire income
from the Receivables in the Trust represented by Grantor Trust Certificates,
including interest, OID, if any, prepayment fees, assumption fees, any gain
recognized upon an assumption and late payment charges received by the Servicer.
Under Sections 162 or 212 each Grantor Trust Certificateholder will be entitled
to deduct its pro rata share of servicing fees, prepayment fees, assumption
fees, any loss recognized upon an assumption and late payment charges retained
by the Servicer, provided that such amounts are reasonable compensation for
services rendered to the Trust. Grantor Trust Certificateholders that are
individuals, estates or trusts will be entitled to deduct their share of
expenses only to the extent such expenses plus all other Section 212 expenses
exceed two percent of its adjusted gross income. A Grantor Trust
Certificateholder using the cash method of accounting must take into account its
pro rata share of income and deductions as and when collected by or paid to the
Servicer. A Grantor Trust Certificateholder using an accrual method of
accounting must take into account its pro rata share of income and deductions as
they become due or are paid to the Servicer, whichever is earlier. If the
servicing fees paid to the Servicer are deemed to exceed reasonable servicing
compensation, the amount of such excess could be considered as an ownership
interest retained by the Servicer (or any person to whom the Servicer assigned
for value all or a portion of the servicing fees) in a portion of the interest
payments on the Receivables. The Receivables would then be subject to the
"coupon stripping" rules of the Code discussed below.
Premium. The price paid for a Grantor Trust Certificate by a holder will
be allocated to such holder's undivided interest in each Receivable based on
each Receivable's relative fair market value, so that such holder's undivided
interest in each Receivable will have its own tax basis. A Grantor Trust
Certificateholder that acquires an interest in Receivables at a premium may
elect to amortize such premium under a constant interest method. Amortizable
bond premium will be treated as an offset to interest income on such Grantor
Trust Certificate. The basis for such Grantor Trust Certificate will be reduced
to the extent that amortizable premium is applied to offset interest payments.
It is not clear whether a reasonable prepayment assumption should be used in
computing amortization of premium allowable under Section 171. A Grantor Trust
Certificateholder that makes this election for a Grantor Trust Certificate that
is acquired at a premium will be deemed to have made an election to amortize
bond premium with respect to all debt instruments having amortizable bond
premium that such Grantor Trust Certificateholder acquires during the year of
the election or thereafter.
If a premium is not subject to amortization using a reasonable prepayment
assumption, the holder of a Grantor Trust Certificate acquired at a premium
should recognize a loss if a Receivable prepays in full, equal to the difference
between the portion of the prepaid principal amount of such Receivable that is
allocable to the Grantor Trust Certificate and the portion of the adjusted basis
of the Grantor Trust Certificate that is allocable to such Receivable. If a
reasonable prepayment assumption is used to amortize such premium, it
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appears that such a loss would be available, if at all, only if prepayments have
occurred at a rate faster than the reasonable assumed prepayment rate. It is not
clear whether any other adjustments would be required to reflect differences
between an assumed prepayment rate and the actual rate of prepayments.
STRIPPED BONDS AND STRIPPED COUPONS
Although the tax treatment of stripped bonds is not entirely clear, based
on recent guidance by the IRS, each purchaser of a Grantor Trust Certificate
will be treated as the purchaser of a stripped bond which generally should be
treated as a single debt instrument issued on the day it is purchased for
purposes of calculating any original issue discount. Generally, under recently
issued Treasury regulations (the "Section 1286 Treasury Regulations"), if the
discount on a stripped bond is larger than a de minimis amount (as calculated
for purposes of the OID rules of the Code) such stripped bond will be considered
to have been issued with OID. See "Original Issue Discount." Based on the
preamble to the Section 1286 Treasury Regulations, Federal Tax Counsel is of the
opinion that, although the matter is not entirely clear, the interest income on
the Certificates at the sum of the Pass Through Rate and the portion of the
Servicing Fee Rate that does not constitute excess servicing will be treated as
"qualified stated interest" within the meaning of the Section 1286 Treasury
Regulations and such income will be so treated in the Trustee's tax information
reporting.
Original Issue Discount. The IRS has stated in published rulings that, in
circumstances similar to those described herein, the special rules of the Code
relating to "original issue discount" (currently Sections 1271 through 1273 and
1275) will be applicable to a Grantor Trust Certificateholder's interest in
those Receivables meeting the conditions necessary for these sections to apply.
Generally, a Grantor Trust Certificateholder that acquires an undivided interest
in a Receivable issued or acquired with OID must include in gross income the sum
of the "daily portions," as defined below, of the OID on such Receivable for
each day on which it owns a Certificate, including the date of purchase but
excluding the date of disposition. In the case of an original Grantor Trust
Certificateholder, the daily portions of OID with respect to a Receivable
generally would be determined as follows. A calculation will be made of the
portion of OID that accrues on the Receivable during each successive monthly
accrual period (or shorter period in respect of the date of original issue or
the final Distribution Date). This will be done, in the case of each full
monthly accrual period, by adding (i) the present value of all remaining
payments to be received on the Receivable under the prepayment assumption used
in respect of the Receivables and (ii) any payments received during such accrual
period, and subtracting from that total the "adjusted issue price" of the
Receivable at the beginning of such accrual period. No representation is made
that the Receivables will prepay at any prepayment assumption. The "adjusted
issue price" of a Receivable at the beginning of the first accrual period is its
issue price (as determined for purposes of the OID rules of the Code) and the
"adjusted issue price" of a Receivable at the beginning of a subsequent accrual
period is the "adjusted issue price" at the beginning of the immediately
preceding accrual period plus the amount of OID allocable to that accrual period
and reduced by the amount of any payment (other than "qualified stated
interest") made at the end of or during that accrual period. The OID accruing
during such accrual period will then be divided by the number of days in the
period to determine the daily portion of OID for each day in the period. With
respect to an initial accrual period shorter than a full monthly accrual period,
the daily portions of OID must be determined according to an appropriate
allocation under either an exact or approximate method set forth in the OID
Regulations, or some other reasonable method, provided that such method is
consistent with the method used to determine the yield to maturity of the
Receivables.
With respect to the Receivables, the method of calculating OID as described
above will cause the accrual of OID to either increase or decrease (but never
below zero) in any given accrual period to reflect the fact that prepayments are
occurring at a faster or slower rate than the prepayment assumption used in
respect of the Receivables. Subsequent purchasers that purchase Receivables at
more than a de minimis discount should consult their tax advisors with respect
to the proper method to accrue such OID.
Market Discount. A Grantor Trust Certificateholder that acquires an
undivided interest in Receivables may be subject to the market discount rules of
Sections 1276 through 1278 to the extent an undivided interest in a Receivable
is considered to have been purchased at a "market discount." Generally, the
amount of market discount is equal to the excess of the portion of the principal
amount of such Receivable allocable to such
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holder's undivided interest over such holder's tax basis in such interest.
Market discount with respect to a Grantor Trust Certificate will be considered
to be zero if the amount allocable to the Grantor Trust Certificate is less than
0.25% of the Grantor Trust Certificate's stated redemption price at maturity
multiplied by the weighted average maturity remaining after the date of
purchase. Treasury regulations implementing the market discount rules have not
yet been issued; therefore, investors should consult their own tax advisors
regarding the application of these rules and the advisability of making any of
the elections allowed under Code Sections 1276 through 1278.
The Code provides that any principal payment (whether a scheduled payment
or a prepayment) or any gain on disposition of a market discount bond shall be
treated as ordinary income to the extent that it does not exceed the accrued
market discount at the time of such payment. The amount of accrued market
discount for purposes of determining the tax treatment of subsequent principal
payments or dispositions of the market discount bond is to be reduced by the
amount so treated as ordinary income.
The Code also grants the Treasury Department authority to issue regulations
providing for the computation of accrued market discount on debt instruments,
the principal of which is payable in more than one installment. While the
Treasury Department has not yet issued regulations, rules described in the
relevant legislative history will apply. Under those rules, the holder of a
market discount bond may elect to accrue market discount either on the basis of
a constant interest rate or according to one of the following methods. If a
Grantor Trust Certificate is issued with OID, the amount of market discount that
accrues during any accrual period would be equal to the product of (i) the total
remaining market discount and (ii) a fraction, the numerator of which is the OID
accruing during the period and the denominator of which is the total remaining
OID at the beginning of the accrual period. For Grantor Trust Certificates
issued without OID, the amount of market discount that accrues during a period
is equal to the product of (i) the total remaining market discount and (ii) a
fraction, the numerator of which is the amount of stated interest paid during
the accrual period and the denominator of which is the total amount of stated
interest remaining to be paid at the beginning of the accrual period. For
purposes of calculating market discount under any of the above methods in the
case of instruments (such as the Grantor Trust Certificates) that provide for
payments that may be accelerated by reason of prepayments of other obligations
securing such instruments, the same prepayment assumption applicable to
calculating the accrual of OID will apply. Because the regulations described
above have not been issued, it is impossible to predict what effect those
regulations might have on the tax treatment of a Grantor Trust Certificate
purchased at a discount or premium in the secondary market.
A holder who acquired a Grantor Trust Certificate at a market discount also
may be required to defer a portion of its interest deductions for the taxable
year attributable to any indebtedness incurred or continued to purchase or carry
such Grantor Trust Certificate purchased with market discount. For these
purposes, the de minimis rule referred above applies. Any such deferred interest
expense would not exceed the market discount that accrues during such taxable
year and is, in general, allowed as a deduction not later than the year in which
such market discount is includible in income. If such holder elects to include
market discount in income currently as it accrues on all market discount
instruments acquired by such holder in that taxable year or thereafter, the
interest deferral rule described above will not apply.
Premium. To the extent a Grantor Trust Certificateholder is considered to
have purchased an undivided interest in a Receivable for an amount that is
greater than its stated redemption price at maturity of such Receivable, such
Grantor Trust Certificateholder will be considered to have purchased the
Receivable with "amortizable bond premium" equal in amount to such excess. A
Grantor Trust Certificateholder (who does not hold the Certificate for sale to
customers or in inventory) may elect under Section 171 of the Code to amortize
such premium. Under the Code, premium is allocated among the interest payments
on the Receivables to which it relates and is considered as an offset against
(and thus a reduction of) such interest payments. With certain exceptions, such
an election would apply to all debt instruments held or subsequently acquired by
the electing holder. Absent such an election, the premium will be deductible as
an ordinary loss only upon disposition of the Certificate or pro rata as
principal is paid on the Receivables.
Election to Treat All Interest as OID. The OID regulations permit a
Grantor Trust Certificateholder to elect to accrue all interest, discount
(including de minimis market or original issue discount) and premium in
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income as interest, based on a constant yield method. If such an election were
to be made with respect to a Grantor Trust Certificate with market discount, the
Certificateholder would be deemed to have made an election to include in income
currently market discount with respect to all other debt instruments having
market discount that such Grantor Trust Certificateholder acquires during the
year of the election or thereafter. Similarly, a Grantor Trust Certificateholder
that makes this election for a Grantor Trust Certificate that is acquired at a
premium will be deemed to have made an election to amortize bond premium with
respect to all debt instruments having amortizable bond premium that such
Grantor Trust Certificateholder owns or acquires. See "-- Premium" herein. The
election to accrue interest, discount and premium on a constant yield method
with respect to a Grantor Trust Certificate is irrevocable.
Sale or Exchange of a Grantor Trust Certificate. Sale or exchange of a
Grantor Trust Certificate prior to its maturity will result in gain or loss
equal to the difference, if any, between the amount received and the owner's
adjusted basis in the Grantor Trust Certificate. Such adjusted basis generally
will equal the seller's purchase price for the Grantor Trust Certificate,
increased by the OID included in the seller's gross income with respect to the
Grantor Trust Certificate, and reduced by principal payments on the Grantor
Trust Certificate previously received by the seller. Such gain or loss will be
capital gain or loss to an owner for which a Grantor Trust Certificate is a
"capital asset" within the meaning of Section 1221, and will be long-term or
short-term depending on whether the Grantor Trust Certificate has been owned for
the long-term capital gain holding period (currently more than one year).
Grantor Trust Certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1), so that gain or loss recognized from the sale of a
Grantor Trust Certificate by a bank or a thrift institution to which such
section applies will be treated as ordinary income or loss.
Non-U.S. Persons. Generally, to the extent that a Grantor Trust
Certificate evidences ownership in underlying Receivables that were issued on or
before July 18, 1984, interest or OID paid by the person required to withhold
tax under Section 1441 or 1442 to (i) an owner that is not a U.S. Person (as
defined below) or (ii) a Grantor Trust Certificateholder holding on behalf of an
owner that is not a U.S. Person will be subject to federal income tax, collected
by withholding, at a rate of 30% or such lower rate as may be provided for
interest by an applicable tax treaty. Accrued OID recognized by the owner on the
sale or exchange of such a Grantor Trust Certificate also will be subject to
federal income tax at the same rate. Generally, such payments would not be
subject to withholding to the extent that a Grantor Trust Certificate evidences
ownership in Receivables issued after July 18, 1984, by natural persons if such
Grantor Trust Certificateholder complies with certain identification
requirements (including delivery of a statement, signed by the Grantor Trust
Certificateholder under penalties of perjury, certifying that such Grantor Trust
Certificateholder is not a U.S. Person and providing the name and address of
such Grantor Trust Certificateholder). Additional restrictions apply to
Receivables of where the obligor is not a natural person in order to qualify for
the exemption from withholding.
As used herein, a "U.S. Person" means a citizen or resident of the United
States, a corporation or a partnership organized in or under the laws of the
United States or any political subdivision thereof or an estate or trust, the
income of which from sources outside the United States is includible in gross
income for federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
Information Reporting and Backup Withholding. The Servicer will furnish or
make available, within a reasonable time after the end of each calendar year, to
each person who was a Grantor Trust Certificateholder at any time during such
year, such information as may be deemed necessary or desirable to assist Grantor
Trust Certificateholders in preparing their federal income tax returns, or to
enable holders to make such information available to beneficial owners or
financial intermediaries that hold Grantor Trust Certificates as nominees on
behalf of beneficial owners. If a holder, beneficial owner, financial
intermediary or other recipient of a payment on behalf of a beneficial owner
fails to supply a certified taxpayer identification number or if the Secretary
of the Treasury determines that such person has not reported all interest and
dividend income required to be shown on its federal income tax return, 31%
backup withholding may be required with respect
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to any payments. Any amounts deducted and withheld from a distribution to a
recipient would be allowed as a credit against such recipient's federal income
tax liability.
CERTAIN STATE TAX CONSEQUENCES WITH RESPECT TO
TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE
The activities to be undertaken by the Servicer in servicing and collecting
the Receivables will take place in Michigan. The State of Michigan imposes a
state individual income tax and a single business tax on corporations,
partnerships and other entities doing business in the State of Michigan. This
discussion relates only to Trusts for which a partnership election is made, and
is based upon present provisions of Michigan statutes and the regulations
promulgated thereunder, and applicable judicial or ruling authority, all of
which are subject to change, which change may be retroactive. No ruling on any
of the issues discussed below will be sought from the Michigan Department of
Treasury.
Because of the variation in each state's tax laws based in whole or in part
upon income, it is impossible to predict tax consequences to holders of Notes
and Certificates in all of the state taxing jurisdictions in which they are
already subject to tax. Noteholders and Certificateholders are urged to consult
their own tax advisors with respect to state tax consequences arising out of the
purchase, ownership and disposition of Notes and Certificates.
For purposes of the following summary, references to the Trust, the Notes,
the Certificates and related terms, parties and documents shall be deemed to
refer, unless otherwise specified herein, to each Trust for which a partnership
election is made and the Notes, Certificates and related terms, parties and
documents applicable to such Trust.
TAX CONSEQUENCES WITH RESPECT TO THE NOTES
It is expected that the General Counsel of the Seller ("Michigan Tax
Counsel") will advise each such Trust that issues Notes that, assuming the Notes
will be treated as debt for federal income tax purposes, the Notes will be
treated as debt for Michigan income and single business tax purposes.
Accordingly, Noteholders not otherwise subject to taxation in Michigan should
not become subject to taxation in Michigan solely because of a holder's
ownership of Notes. However, a Noteholder already subject to Michigan's income
tax or single business tax could be required to pay additional Michigan tax as a
result of the holder's ownership or disposition of Notes.
TAX CONSEQUENCES WITH RESPECT TO THE CERTIFICATES ISSUED BY A TRUST TREATED AS A
PARTNERSHIP
If the arrangement created by the Trust Agreement is treated as a
partnership (not taxable as a corporation) for federal income tax purposes,
Michigan Tax Counsel will deliver his opinion that the same treatment should
also apply for Michigan tax purposes. In such case, the resulting constructive
partnership should not be treated as doing business in Michigan but rather
should be viewed as a passive holder of investments and, as a result, should not
be subject to the Michigan single business tax (which, if applicable, could
possibly result in reduced distributions to Certificateholders). The
Certificateholders also should not be subject to the Michigan single business
tax on income received through the partnership.
Under current law, Certificateholders that are nonresidents of Michigan and
are not otherwise subject to Michigan income tax should not be subject to
Michigan income tax on the income from the constructive partnership. In any
event, classification of the arrangement as a "partnership" would not cause a
Certificateholder not otherwise subject to taxation in Michigan to pay Michigan
tax on income beyond that derived from the Certificates.
If the Certificates are instead treated as ownership interests in an
association taxable as a corporation or a "publicly traded partnership" taxable
as a corporation, then the hypothetical entity should not be subject to the
Michigan single business tax (which, if applicable, could result in reduced
distributions to Certificateholders). A Certificateholder not otherwise subject
to tax in Michigan would not become subject to Michigan tax as a result of its
mere ownership of such an interest.
55
<PAGE> 125
* * *
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTEHOLDER'S
OR CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND CERTIFICATES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan, as well as individual retirement
accounts and certain types of Keogh Plans (each a "Benefit Plan"), from engaging
in certain transactions with persons that are "parties in interest" under ERISA
or "disqualified persons" under the Code with respect to such Benefit Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other penalties and liabilities under ERISA and the Code for such persons.
Certain transactions involving a Trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan
that purchased Notes or Certificates if assets of the Trust were deemed to be
assets of the Benefit Plan. Under a regulation issued by the United States
Department of Labor (the "Plan Assets Regulation"), the assets of a Trust would
be treated as plan assets of a Benefit Plan for the purposes of ERISA and the
Code only if the Benefit Plan acquired an "equity interest" in the Trust and
none of the exceptions contained in the Plan Assets Regulation was applicable.
An equity interest is defined under the Plan Assets Regulation as an interest
other than an instrument which is treated as indebtedness under applicable local
law and which has no substantial equity features. The likely treatment in this
context of Notes and Certificates of a given series will be discussed in the
related Prospectus Supplement.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Securities of a given series
should consult its tax and/or legal advisors regarding whether the assets of the
related Trust would be considered plan assets, the possibility of exemptive
relief from the prohibited transaction rules and other issues and their
potential consequences.
SENIOR CERTIFICATES ISSUED BY TRUSTS THAT DO NOT ISSUE NOTES
Unless otherwise specified in the related Prospectus Supplement, the
following discussion applies only to nonsubordinated Certificates (referred to
herein as "Senior Certificates") issued by a Trust that does not issue Notes.
The U.S. Department of Labor has granted to the lead Underwriter named in
the Prospectus Supplement an exemption (the "Exemption") from certain of the
prohibited transaction rules of ERISA with respect to the initial purchase, the
holding and the subsequent resale by Benefit Plans of certificates representing
interests in asset-backed pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. The receivables covered by the Exemption include
motor vehicle installment sales contracts such as the Receivables. The Exemption
will apply to the acquisition, holding and resale of the Senior Certificates by
a Benefit Plan, provided that certain conditions (certain of which are described
below) are met.
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<PAGE> 126
Among the conditions which must be satisfied for the Exemption to apply to
the Senior Certificates are the following:
(1) The acquisition of the Senior Certificates by a Benefit Plan is on
terms (including the price for the Senior Certificates) that are at least
as favorable to the Benefit Plan as they would be in an arm's length
transaction with an unrelated party;
(2) The rights and interests evidenced by the Senior Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by other certificates of the Trust;
(3) The Senior Certificates acquired by the Benefit Plan have received
a rating at the time of such acquisition that is in one of the three
highest generic rating categories from either Standard & Poor's
Corporation, Moody's Investors Service, Inc., Duff & Phelps Inc. or Fitch
Investors Service, Inc.;
(4) The Trustee is not an affiliate of any other member of the
Restricted Group (as defined below);
(5) The sum of all payments made to the Underwriters in connection
with the distribution of the Senior Certificates represents not more than
reasonable compensation for underwriting the Senior Certificates; the sum
of all payments made to and retained by the Seller pursuant to the sale of
the Contracts to the Trust represents not more than the fair market value
of such Contracts; and the sum of all payments made to and retained by the
Servicer represents not more than reasonable compensation for the
Servicer's services under the Agreement and reimbursement of the Servicer's
reasonable expenses in connection therewith; and
(6) The Benefit Plan investing in the Senior Certificates is an
"accredited investor" as defined in Rule 501 (a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of 1933.
Moreover, the Exemption would provide relief from certain
self-dealing/conflict of interest or prohibited transactions only if, among
other requirements, (i) in the case of the acquisition of Senior Certificates in
connection with the initial issuance, at least fifty (50) percent of the Senior
Certificates are acquired by persons independent of the Restricted Group (as
defined below), (ii) the Benefit Plan's investment in Senior Certificates does
not exceed twenty-five (25) percent of all of the Senior Certificates
outstanding at the time of the acquisition, and (iii) immediately after the
acquisition, no more than twenty-five (25) percent of the assets of the Benefit
Plan are invested in certificates representing an interest in one or more trusts
containing assets sold or serviced by the same entity. The Exemption does not
apply to Plans sponsored by the Seller, any Underwriter, the Trustee, the
Servicer, any obligor with respect to Contracts included in the Trust
constituting more than five percent of the aggregate unamortized principal
balance of the assets in the Trust, or any affiliate of such parties (the
"Restricted Group").
The Seller believes that the Exemption will apply to the acquisition and
holding by Benefit Plans of Senior Certificates sold by the Underwriter or
Underwriters named in the Prospectus Supplement and that all conditions of the
Exemption other than those within the control of the investors have been met. In
addition, as of the date hereof, no obligor with respect to Contracts included
in the Trust constitutes more than five percent of the aggregate unamortized
principal balance of the assets of the Trust.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement with
respect to the Notes, if any, of a given series and an underwriting agreement
with respect to the Certificates of such series (collectively, the "Underwriting
Agreements"), the Seller will agree to cause the related Trust to sell to the
underwriters named therein and in the related Prospectus Supplement, and each of
such underwriters will severally agree to purchase, the principal amount of each
class of Notes and Certificates, as the case may be, of the related series set
forth therein and in the related Prospectus Supplement.
In each of the Underwriting Agreements with respect to any given series of
Securities, the several underwriters will agree, subject to the terms and
conditions set forth therein, to purchase all the Notes and
57
<PAGE> 127
Certificates, as the case may be, described therein which are offered hereby and
by the related Prospectus Supplement if any of such Notes and Certificates, as
the case may be, are purchased.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Notes and Certificates, as the case may be, being offered thereby
will be offered to the public and any concessions that may be offered to certain
dealers participating in the offering of such Notes and Certificates or (ii)
specify that the related Notes and Certificates, as the case may be, are to be
resold by the underwriters in negotiated transactions at varying prices to be
determined at the time of such sale. After the initial public offering of any
such Notes and Certificates, such public offering prices and such concessions
may be changed.
Each Underwriting Agreement will provide that the Seller will indemnify the
underwriters against certain civil liabilities, including liabilities under the
Securities Act, or contribute to payments the several underwriters may be
required to make in respect thereof.
Each Trust may, from time to time, invest the funds in its Trust Accounts
in Eligible Investments acquired from such underwriters or from the Seller.
Pursuant to each Underwriting Agreement with respect to a given series of
Securities, the closing of the sale of any class of Securities subject to such
Underwriting Agreement will be conditioned on the closing of the sale of all
other such classes of Securities of that series.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the related Prospectus Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Securities of any series will be
passed upon for the related Trust, the Seller and the Servicer by the General
Counsel of the Seller and the Servicer. Certain Michigan state tax and other
matters will be passed upon for the Trust by the General Counsel of the Seller
and the Servicer.
58
<PAGE> 128
INDEX OF TERMS
<TABLE>
<S> <C>
Actuarial Receivables................................................................ 13
Administration Agreement............................................................. 39
Administration Fee................................................................... 39
Administrator........................................................................ 39
Advance.............................................................................. 6
Applicable Trustee................................................................... 27
APR.................................................................................. 6
Base Rate............................................................................ 22
Benefit Plan......................................................................... 50
Calculation Agent.................................................................... 23
Calculation Date..................................................................... 24
CCC.................................................................................. 3
CD Rate.............................................................................. 23
CD Rate Determination Date........................................................... 23
CD Rate Security..................................................................... 22
Cede................................................................................. 11
Certificate Balance.................................................................. 4
Certificate Distribution Account..................................................... 31
Certificate Pool Factor.............................................................. 15
Certificateholders................................................................... 11
Certificateholders' Reconciliation Principal Adjustment Amount....................... 29
Certificates......................................................................... 1
Chrysler............................................................................. 10
Closing Date......................................................................... 30
Code................................................................................. 42
Collection Account................................................................... 31
Collection Period.................................................................... 32
Commercial Paper Rate................................................................ 23
Commercial Paper Rate Determination Date............................................. 23
Commercial Paper Rate Security....................................................... 22
Commission........................................................................... 2
Commodity Indexed Securities......................................................... 26
Company.............................................................................. 1
Composite Quotations................................................................. 22
Currency Indexed Securities.......................................................... 26
Cutoff Date.......................................................................... 11
Dealer Agreements.................................................................... 11
Dealers.............................................................................. 5
Definitive Certificates.............................................................. 28
Definitive Notes..................................................................... 28
Definitive Securities................................................................ 28
Depository........................................................................... 17
Determination Date................................................................... 35
Distribution Date.................................................................... 21
DTC's Nominee........................................................................ 11
Eligible Deposit Account............................................................. 32
Eligible Institution................................................................. 32
Eligible Investments................................................................. 31
ERISA................................................................................ 8
Events of Default.................................................................... 18
Face Amount.......................................................................... 27
Federal Funds Rate................................................................... 24
</TABLE>
59
<PAGE> 129
<TABLE>
<S> <C>
Federal Funds Rate Determination Date................................................ 24
Federal Funds Rate Security.......................................................... 22
Federal Tax Counsel.................................................................. 42
Final Scheduled Maturity Date........................................................ 6
Financed Vehicles.................................................................... 5
Fixed Rate Securities................................................................ 22
Fixed Value Receivables.............................................................. 13
Fixed Value Securities............................................................... 38
Floating Rate Securities............................................................. 22
foreign person....................................................................... 44
FTC Rule............................................................................. 42
Funding Period....................................................................... 4
H.15(519)............................................................................ 22
Indenture............................................................................ 3
Indenture Trustee.................................................................... 1
Index................................................................................ 26
Index Maturity....................................................................... 22
Indexed Commodity.................................................................... 26
Indexed Currency..................................................................... 26
Indexed Principal Amount............................................................. 26
Indexed Securities................................................................... 26
Indirect Participants................................................................ 27
Initial Pool Balance................................................................. 38
Initial Receivables.................................................................. 5
Insolvency Event..................................................................... 36
Interest Rate........................................................................ 3
Interest Reset Date.................................................................. 22
Interest Reset Period................................................................ 22
Investment Earnings.................................................................. 31
IRS.................................................................................. 42
Issuer............................................................................... 3
LIBOR................................................................................ 25
LIBOR Determination Date............................................................. 25
LIBOR Security....................................................................... 22
London Banking Day................................................................... 25
Market Value Pricing................................................................. 13
Michigan Tax Counsel................................................................. 49
Money Market Yield................................................................... 24
Note Distribution Account............................................................ 31
Note Pool Factor..................................................................... 15
Noteholders.......................................................................... 11
Noteholders' Reconciliation Principal Adjustment Amount.............................. 29
Notes................................................................................ 1
Obligors............................................................................. 11
OID.................................................................................. 43
Participants......................................................................... 17
Pass Through Rate.................................................................... 4
Payahead Balance..................................................................... 31
Payaheads............................................................................ 32
Payment Date......................................................................... 17
Plan Assets Regulation............................................................... 50
Pool Balance......................................................................... 15
Pooling and Servicing Agreement...................................................... 3
</TABLE>
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<TABLE>
<S> <C>
Pre-Funded Amount.................................................................... 5
Pre-Funding Account.................................................................. 1
Precomputed Advance.................................................................. 6
Precomputed Receivables.............................................................. 13
Prospectus Supplement................................................................ 1
Purchase Amount...................................................................... 30
Rating Agencies...................................................................... 10
Receivables.......................................................................... 1
Receivables Pool..................................................................... 11
Registration Statement............................................................... 2
Related Documents.................................................................... 20
Reserve Account...................................................................... 35
Reuters Screen LIBO Page............................................................. 25
Rule of 78's......................................................................... 13
Rule of 78's Receivables............................................................. 13
Rules................................................................................ 27
Sale and Servicing Agreement......................................................... 5
Schedule of Receivables.............................................................. 30
Securities........................................................................... 1
Securities Act....................................................................... 2
Securityholders...................................................................... 11
Seller............................................................................... 1
Servicer............................................................................. 3
Servicer Default..................................................................... 36
Servicing Fee........................................................................ 33
Servicing Fee Rate................................................................... 33
Short-Term Note...................................................................... 43
Simple Interest Advance.............................................................. 6
Simple Interest Receivables.......................................................... 14
Spread............................................................................... 22
Spread Multiplier.................................................................... 22
Stock Index.......................................................................... 26
Stock Indexed Securities............................................................. 26
Strip Certificates................................................................... 4
Strip Notes.......................................................................... 3
Subsequent Receivables............................................................... 1
Subsequent Transfer Date............................................................. 30
Transfer and Servicing Agreements.................................................... 30
Treasury bills....................................................................... 25
Treasury Rate........................................................................ 25
Treasury Rate Determination Date..................................................... 26
Treasury Rate Security............................................................... 22
Trust................................................................................ 3
Trustee.............................................................................. 3
Trust Accounts....................................................................... 31
Trust Agreement...................................................................... 1
UCC.................................................................................. 31
Underwriting Agreements.............................................................. 50
</TABLE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
OFFERED HEREBY, NOR AN OFFER OF THE SECURITIES IN ANY STATE OR JURISDICTION IN
WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-------
PROSPECTUS SUPPLEMENT
<S> <C>
Reports to Securityholders................. S-2
Summary of Terms........................... S-3
Special Considerations..................... S-11
The Trust.................................. S-16
The Receivables Pool....................... S-17
The Seller and the Servicer................ S-23
Weighted Average Life of the Securities.... S-23
Description of the Notes................... S-23
Description of the Certificates............ S-25
Description of the Transfer and Servicing
Agreements............................... S-26
ERISA Considerations....................... S-34
Underwriting............................... S-35
Legal Opinions............................. S-35
Index of Terms............................. S-36
PROSPECTUS
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
Summary of Terms........................... 3
Special Considerations..................... 9
The Trusts................................. 11
The Receivables Pools...................... 13
Weighted Average Life of the Securities.... 15
Pool Factors and Trading Information....... 15
Use of Proceeds............................ 16
The Seller and the Servicer................ 16
Description of the Notes................... 17
Description of the Certificates............ 21
Certain Information Regarding the
Securities............................... 22
Description of the Transfer and Servicing
Agreements............................... 30
Certain Legal Aspects of the Receivables... 41
Certain Federal Income Tax Consequences.... 44
Certain State Tax Consequences with respect
to Trusts for which a Partnership
Election Is Made......................... 55
ERISA Considerations....................... 56
Plan of Distribution....................... 57
Legal Opinions............................. 58
Index of Terms............................. 59
------------------
</TABLE>
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN [THE NOTES OR] THE CERTIFICATES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS
SUPPLEMENT AND A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS SUPPLEMENT AND A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$
PREMIER AUTO TRUST 199 -
$
CLASS A-1 % ASSET BACKED NOTES
$
CLASS A-2 % ASSET BACKED NOTES
$
CLASS A-3 % ASSET BACKED NOTES
$
% ASSET BACKED CERTIFICATES
(LOGO) 1/2 3/4SELLER
(LOGO)SERVICER
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
, 199
------------------------------------------------------
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<PAGE> 132
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
<TABLE>
<S> <C>
Registration Fee........................................................ $2,231,250
Printing Expenses....................................................... 240,000
Trustee Fees and Expenses............................................... 568,000
Legal Fees and Expenses................................................. 200,000
Accountants' Fees and Expenses.......................................... 480,000
Rating Agencies' Fees................................................... 2,280,000
Miscellaneous........................................................... 750
----------
Total......................................................... $6,000,000
=========
</TABLE>
- ---------------
* All amounts except registration fee are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chrysler Corporation (parent of the Registrant) is incorporated under
Delaware law. Section 145 of the Delaware General Corporation Law provides that
a Delaware corporation may indemnify any persons, including officers and
directors, who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, for criminal proceedings,
had no reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
Section B of Article VIII of the Certificate of Incorporation of Chrysler
Corporation, the parent of the Registrant, provides, in effect, that, subject to
certain limited exceptions, Chrysler Corporation will indemnify the officers and
directors of Chrysler Corporation or its subsidiaries to the extent permitted by
Delaware law. In addition, Chrysler Corporation maintains insurance providing
for payment, subject to certain exceptions, on behalf of officers and directors
of Chrysler Corporation and its subsidiaries of money damages incurred as a
result of legal actions instituted against them in their capacities as such
officers or directors.
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<PAGE> 133
The Registrant is incorporated under Michigan law. Sections 561 to 565,
inclusive, and Sections 567 and 569 of the Michigan Business Corporation Act
provide, in effect, that a Michigan corporation may indemnify any persons,
including officers and directors, who are, or are threatened to be made, parties
to any threatened, pending or completed legal action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation), by reason of the fact that such person
was an officer or director of such corporation, or is or was serving at the
request of such corporation as a director, officer, partner, trustee, employee
or agent of another corporation or enterprise. The indemnity may include
expenses (including attorneys' fees), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, provided such officer or director acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation or its shareholders and, for criminal
proceedings, had no reasonable cause to believe that his conduct was illegal. A
Michigan corporation may indemnify officers and directors in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement for the Notes. Filed as Exhibit 1.1 to
Registration Statement No. 33-58942 of Chrysler Financial Corporation, and
incorporated herein by reference.
1.2 Form of Underwriting Agreement for the Certificates. Filed as Exhibit 1.2 to
Registration Statement No. 33-58942 of Chrysler Financial Corporation, and
incorporated herein by reference.
3.1 Restated Articles of Incorporation of Chrysler Financial Corporation as
adopted and filed with the Corporation Division of Michigan Department of
Treasury on October 1, 1971. Filed as Exhibit 3-A to Registration No.
2-43097 of Chrysler Financial Corporation, and incorporated herein by
reference.
3.2 Amendments to the Restated Articles of Incorporation of Chrysler Financial
Corporation filed with the Department of Commerce of the State of Michigan
on December 26, 1975, April 23, 1985 and June 21, 1985, respectively. Filed
as Exhibit 3-B to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1985, and incorporated herein by
reference.
3.3 Amendments to the Restated Articles of Incorporation of Chrysler Financial
Corporation filed with the Department of Commerce of the State of Michigan
on August 12, 1987 and August 14, 1987, respectively. Filed as Exhibit 3 to
the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended September 30, 1987, and incorporated herein by reference.
3.4 Amendments to the Restated Articles of Incorporation of Chrysler Financial
Corporation filed with the Department of Commerce of the State of Michigan
on December 11, 1987 and January 25, 1988, respectively. Filed as Exhibit
3-D to the Annual Report of Chrysler Financial Corporation on Form 10-K for
the year ended December 31, 1989, and incorporated herein by reference.
</TABLE>
II-2
<PAGE> 134
<TABLE>
<S> <C> <C>
3.5 Amendments to the Restated Articles of Incorporation of Chrysler Financial
Corporation filed with the Department of Commerce of the State of Michigan
on June 13, 1989, June 23, 1989 (two amendments), September 13, 1989,
January 31, 1990 and March 8, 1990, respectively. Filed as Exhibit 3-E to
the Annual Report of Chrysler Financial Corporation on Form 10-K for the
year ended December 31, 1989, and incorporated herein by reference.
3.6 Amendments to the Restated Articles of Incorporation of Chrysler Financial
Corporation filed with the Department of Commerce of the State of Michigan
on March 29, 1990 and May 10, 1990. Filed as Exhibit 3-G to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the quarter ended
March 31, 1990, and incorporated herein by reference.
3.7 By-Laws of Chrysler Financial Corporation as amended to August 1, 1990.
Filed as Exhibit 3-I to the Quarterly Report of Chrysler Financial
Corporation on Form 10-Q for the quarter ended September 30, 1990, and
incorporated herein by reference.
3.8 By-Laws of Chrysler Financial Corporation as amended to January 1, 1992 and
presently in effect. Filed as Exhibit 3-H to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended December 31, 1991, and
incorporated herein by reference.
3.9 Form of Certificate of Trust for Premier Auto Trusts (included in Exhibit
4.2).
4.1 Form of Indenture between the Trust and the Indenture Trustee (including
forms of Notes).
4.2 Form of Trust Agreement among the Registrant, the Company and the Trustee
(including forms of Certificates). Filed as Exhibit 4.2 to Registration
Statement No. 33-58942 of Chrysler Financial Corporation, and incorporated
herein by reference.
4.3 Form of Pooling and Servicing Agreement, including the Form of Standard
Terms and Conditions of Agreement, among the Registrant, the Servicer and
the Trustee (including forms of Certificates).
5.1 Opinion of Allan L. Ronquillo, Esq. with respect to legality.
8.1 Opinion of Brown & Wood with respect to federal tax matters.
8.2 Opinion of Allan L. Ronquillo, Esq. with respect to tax matters under
Michigan law.
23.1 Consent of Allan L. Ronquillo, Esq. (included in the opinions filed as
Exhibits 5.1 and 8.2).
23.2 Consent of Brown & Wood (included in its opinion filed as Exhibit 8.1).
24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust Indenture Act of 1939
of Bankers Trust Company.
25.2 Form of T-1 Statement of Eligibility under the Trust Indenture Act of 1939
of The Fuji Bank and Trust Company.
25.3 Form of T-1 Statement of Eligibility under the Trust Indenture Act of 1939
of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant, the Servicer and
the Trust.
99.2 Form of Administration Agreement among the Trust, the Administrator and the
Indenture Trustee. Filed as Exhibit 28.2 to Registration Statement No.
33-58942 of Chrysler Financial Corporation, and incorporated herein by
reference.
99.3 Form of Purchase Agreement between the Company and the Registrant.
</TABLE>
II-3
<PAGE> 135
ITEM 17. UNDERTAKINGS
(a) As to Rule 415:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, as amended, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) As to documents subsequently filed that are incorporated by reference:
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) As to indemnification:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield and State of Michigan, on the 5th day of
October, 1994.
CHRYSLER FINANCIAL CORPORATION,
by: /S/ JOHN P. TIERNEY
________________________________
Name: John P. Tierney
Title: Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Principal Executive Officer:
/S/ J. P. TIERNEY Chairman of the Board October 5, 1994
_________________________________
J. P. Tierney
</TABLE>
<TABLE>
<C> <S> <C>
Principal Financial Officer:
/S/ D. M. CANTWELL Vice President -- Corporate Finance October 5, 1994
_________________________________ and Development
D. M. Cantwell
Principal Accounting Officer:
/S/ T. P. DYKSTRA Vice President and Controller October 5, 1994
_________________________________
T. P. Dykstra
</TABLE>
II-5
<PAGE> 137
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Board of Directors:
*/S/ W. S. BISHOP Director October 5, 19
___________________________________________
W. S. Bishop
*/S/ D. M. CANTWELL Director October 5, 1994
___________________________________________
D. M. Cantwell
*/S/ T. P. CAPO Director October 5, 1994
___________________________________________
T. P. Capo
*/S/ R. J. EATON Director October 5, 1994
___________________________________________
R. J. Eaton
*/S/ J. E. FARRELL Director October 5, 1994
___________________________________________
J. E. Farrell
*/S/ R. A. LUTZ Director October 5, 1994
___________________________________________
R. A. Lutz
*/S/ W. J. O'BRIEN III Director October 5, 1994
___________________________________________
W. J. O'Brien III
*/S/ J. P. TIERNEY Director October 5, 1994
___________________________________________
J. P. Tierney
*/S/ G. C. VALADE Director October 5, 1994
___________________________________________
G. C. Valade
*By: /S/ R. A. LINK
_______________________________________
R. A. Link
Attorney-in-Fact
October 5, 1994
</TABLE>
II-6
<PAGE> 138
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement for the Notes. Filed as Exhibit 1.1 to
Registration Statement No. 33-58942 of Chrysler Financial Corporation,
and incorporated herein by reference.
1.2 Form of Underwriting Agreement for the Certificates. Filed as Exhibit
1.2 to Registration Statement No. 33-58942 of Chrysler Financial
Corporation, and incorporated herein by reference.
3.1 Restated Articles of Incorporation of Chrysler Financial Corporation as
adopted and filed with the Corporation Division of Michigan Department
of Treasury on October 1, 1971. Filed as Exhibit 3-A to Registration No.
2-43097 of Chrysler Financial Corporation, and incorporated herein by
reference.
3.2 Amendments to the Restated Articles of Incorporation of Chrysler
Financial Corporation filed with the Department of Commerce of the State
of Michigan on December 26, 1975, April 23, 1985 and June 21, 1985,
respectively. Filed as Exhibit 3-B to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended December 31, 1985,
and incorporated herein by reference.
3.3 Amendments to the Restated Articles of Incorporation of Chrysler
Financial Corporation filed with the Department of Commerce of the State
of Michigan on August 12, 1987 and August 14, 1987, respectively. Filed
as Exhibit 3 to the Quarterly Report of Chrysler Financial Corporation
on Form 10-Q for the quarter ended September 30, 1987, and incorporated
herein by reference.
3.4 Amendments to the Restated Articles of Incorporation of Chrysler
Financial Corporation filed with the Department of Commerce of the State
of Michigan on December 11, 1987 and January 25, 1988, respectively.
Filed as Exhibit 3-D to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1989, and
incorporated herein by reference.
3.5 Amendments to the Restated Articles of Incorporation of Chrysler
Financial Corporation filed with the Department of Commerce of the State
of Michigan on June 13, 1989, June 23, 1989 (two amendments), September
13, 1989, January 31, 1990 and March 8, 1990, respectively. Filed as
Exhibit 3-E to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1989, and incorporated herein
by reference.
3.6 Amendments to the Restated Articles of Incorporation of Chrysler
Financial Corporation filed with the Department of Commerce of the State
of Michigan on March 29, 1990 and May 10, 1990. Filed as Exhibit 3-G to
the Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended March 31, 1990, and incorporated herein by reference.
3.7 By-Laws of Chrysler Financial Corporation as amended to August 1, 1990.
Filed as Exhibit 3-I to the Quarterly Report of Chrysler Financial
Corporation on Form 10-Q for the quarter ended September 30, 1990, and
incorporated herein by reference.
3.8 By-Laws of Chrysler Financial Corporation as amended to January 1, 1992
and presently in effect. Filed as Exhibit 3-H to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended December
31, 1991, and incorporated herein by reference.
</TABLE>
<PAGE> 139
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S> <C>
3.9 Form of Certificate of Trust for Premier Auto Trusts (included in
Exhibit 4.2).
4.1 Form of Indenture between the Trust and the Indenture Trustee (including
forms of Notes).
4.2 Form of Trust Agreement among the Registrant, the Company and the
Trustee (including forms of Certificates).
4.3 Form of Pooling and Servicing Agreement, including Form of Standard
Terms and Conditions of Agreement, among the Registrant, the Servicer
and the Trustee (including forms of Certificates).
5.1 Opinion of Allan L. Ronquillo, Esq. with respect to legality.
8.1 Opinion of Brown & Wood with respect to federal tax matters.
8.2 Opinion of Allan L. Ronquillo, Esq. with respect to tax matters under
Michigan law.
23.1 Consent of Allan L. Ronquillo, Esq. (included in the opinions filed as
Exhibits 5.1 and 8.2).
23.2 Consent of Brown & Wood (included in its opinion filed as Exhibit 8.1).
24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Bankers Trust Company.
25.2 Form of T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Fuji Bank and Trust Company.
25.3 Form of T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant, the Servicer
and the Trust.
99.2 Form of Administration Agreement among the Trust, the Administrator and
the Indenture Trustee. Filed as Exhibit 28.2 to Registration Statement
No. 33-58942 of Chrysler Financial Corporation, and incorporated herein
by reference.
99.3 Form of Purchase Agreement between the Company and the Registrant.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
================================================================================
FORM OF INDENTURE
between
PREMIER AUTO TRUST 199_-_,
as Issuer
and
[_____________________________],
as Indenture Trustee
Dated as of ___________, 199_
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . 10
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II
The Notes
---------
SECTION 2.01. Form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.02. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.03. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
[SECTION 2.04. Limitations on Transfer of the Class A-1 Notes. . . . . . . . . . . . . . . . . . 12]
SECTION 2.05. Registration; Registration of Transfer and Exchange . . . . . . . . . . . . . . . 13
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . . . . . . 14
SECTION 2.07. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest . . . . . . . . . . . . . . 15
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.10. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.11. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.12. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.13. Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.14. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III
Covenants
---------
SECTION 3.01. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.07. Performance of Obligations; Servicing of Receivables . . . . . . . . . . . . . . 23
SECTION 3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.09. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms . . . . . . . . . . . . . . . 25
SECTION 3.11. Successor or Transferee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.12. No Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.17. Removal of Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.18. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.19. Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.20. Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.03. Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
Remedies
--------
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.05. Optional Preservation of the Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.06. Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.11. Control by Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.12. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.15. Action on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.16. Performance and Enforcement of Certain Obligations . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI
The Indenture Trustee
---------------------
SECTION 6.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.06. Reports by Indenture Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.09. Successor Indenture Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.12. Preferential Collection of Claims Against Issuer . . . . . . . . . . . . . . . . 45
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses . . . . . . . . . . . . . . 45
ARTICLE VII
Noteholders' Lists and Reports
------------------------------
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02. Preservation of Information; Communications to Noteholders . . . . . . . . . . . 45
SECTION 7.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
Accounts, Disbursements and Releases
------------------------------------
SECTION 8.01. Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.02. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.03. General Provisions Regarding Accounts . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.04. Release of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders . . . . . . . . . . . . . 50
SECTION 9.02. Supplemental Indentures with Consent of Noteholders . . . . . . . . . . . . . . . 51
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.06. Reference in Notes to Supplemental Indentures . . . . . . . . . . . . . . . . . . 53
ARTICLE X
Redemption of Notes
-------------------
SECTION 10.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.02. Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.03. Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE XI
Miscellaneous
-------------
SECTION 11.01. Compliance Certificates and Opinions, etc . . . . . . . . . . . . . . . . . . . 55
SECTION 11.02. Form of Documents Delivered to Indenture Trustee . . . . . . . . . . . . . . . 56
SECTION 11.03. Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.05. Notices to Noteholders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.06. Alternate Payment and Notice Provisions . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.07. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.08. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . 59
SECTION 11.09. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.10. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.16. Trust Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.17. No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SCHEDULE A - Schedule of Receivables
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
[EXHIBIT B - Form of Transferor Certificate
EXHIBIT C - Form of Investment Letter
EXHIBIT D - Form of Rule 144A Letter]
</TABLE>
iv
<PAGE> 6
INDENTURE dated as of _________, 199_, between PREMIER AUTO TRUST 199_-_, a
Delaware business trust (the "Issuer"), and _________________, a ___________
banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's Class A-1 ______%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 _____% Asset Backed
Notes (the "Class A-2 Notes") and Class A-3 ______% Asset Backed Notes (the
"Class A-3 Notes" and, together with the Class A-1 Notes and the Class A-2
Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to (a) any Receivables purchased on
the Closing Date; (b) the monies deposited to the Pre-Funding Account on the
Closing Date; (c) all Receivables purchased on any Subsequent Transfer Date
with such Pre-Funded Amounts and all moneys due on such Receivables on or after
the applicable Subsequent Cutoff Date, in the case of Precomputed Receivables,
and all moneys received thereon on and after the applicable Subsequent Transfer
Date, in the case of Simple Interest Receivables; (d) the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Issuer in such Financed Vehicles; (e) any proceeds with
respect to the Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors; (f) any
proceeds from recourse to Dealers with respect to Receivables in respect of
which the Servicer has determined in accordance with its customary servicing
procedures that eventual payment in full is unlikely; (g) any Financed Vehicle
that shall have secured a Receivable and that shall have been acquired by or on
behalf of the Seller, the Servicer, [an affiliate of the Seller] (the
"Company") or the Issuer; (h) all funds on deposit from time to time in the
Trust Accounts, including the Reserve Account Initial Deposit and the
Pre-Funded Amount, and in all investments and proceeds thereof (including all
income thereon); (i) the Sale and Servicing Agreement (including the Issuer's
right to cause the Seller to repurchase Standard Receivables, Fixed Value
Receivables, Eligible Investment Standard Receivables or Eligible Investment
Fixed Value Receivables from the Issuer under certain circumstances described
therein); and (j) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in respect of any
or all of the foregoing, including all proceeds of the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing (collectively,
the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
<PAGE> 7
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the
Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. (a) Definitions. Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as of
________, 199_, among the Administrator, the Issuer and the Indenture Trustee.
"Administrator" means Chrysler Credit Corporation, a Delaware corporation, or
any successor Administrator under the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Sale and Servicing Agreement, the Purchase Agreement, the Administration
Agreement, the Note Depository Agreement, the Certificate Depository Agreement
and other documents and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the [Class A-2 Notes and
Class A-3] Notes, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.11.
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<PAGE> 8
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to remain closed.
"Certificate Depository Agreement" has the meaning specified in Section 1.01
of the Trust Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Interest Rate" means _____% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"Class A-1 Notes" means the Class A-1 ______% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means _____% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"Class A-2 Notes" means the Class A-2 ______% Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Interest Rate" means _____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 ______% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means _________, 199_.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Company" means ________________________.
"Corporate Trust Office" means the principal office of the Indenture Trustee
at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
____________________________________________; Attention:
_____________________________________________, or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the
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<PAGE> 9
Issuer, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by notice
to the Noteholders and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.13.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is registered
on the Note Register.
"Indenture Trustee" means ___________________, a ____________ banking
corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care,
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<PAGE> 10
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Interest Accrual Period" means, with respect to any Distribution Date and
any class of Notes, the period from and including the second day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) to and including the first day of the
month of such Distribution Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2 Interest
Rate or the Class A-3 Interest Rate.
"Issuer" means Premier Auto Trust 199_-_ until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" mean a written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Note" means a Class A-1 Note, a Class A-2 Note or a Class A-3 Note.
"Note Depository Agreement" means the agreement dated _____________, 199_,
among the Issuer, the Administrator, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Class A-2 Notes
and the Class A-3 Notes.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.05.
"Officer's Certificate" means a certificate signed by any Authorized Officer
of the Issuer, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.01, and delivered to the
Indenture Trustee. Unless otherwise specified, any reference in this Indenture
to an Officer's Certificate shall be to an Officer's Certificate of any
Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee,
and which opinion or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, shall comply with any applicable requirements of Section
11.01 and shall be in form and substance satisfactory to the Indenture Trustee.
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<PAGE> 11
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the necessary
amount has been theretofore deposited with the Indenture Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however, that
if such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision for such notice has been made,
satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent, or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Notes that the Indenture Trustee knows to be
so owned shall be so disregarded. Notes so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
Class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means __________________, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, or any successor Owner
Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11 and
is authorized by the Issuer to make payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and,
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<PAGE> 12
for the purpose of this definition, any Note authenticated and delivered under
Section 2.06 in lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that each Rating
Agency shall have been given 10 days (or such shorter period as is acceptable
to each Rating Agency) prior notice thereof and that each of the Rating
Agencies shall have notified the Seller, the Servicer and the Issuer in writing
that such action will not result in a reduction or withdrawal of the then
current rating of the Notes.
"Rating Agency" means Moody's and Standard & Poor's. If no such organization
or successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person
designated by the Issuer, notice of which designation shall be given to the
Indenture Trustee, the Owner Trustee and the Servicer. Any notice required to
be given to a Rating Agency pursuant to this Indenture shall also be given to
Fitch Investors Service, Inc. and Duff & Phelps Credit Rating Company, although
neither shall be deemed to be a Rating Agency for any purposes of this
Indenture.
"Record Date" means, with respect to a Distribution Date or Redemption Date,
the close of business on the first day of the calendar month in which such
Distribution Date or Redemption Date occurs or, if Definitive Notes have been
issued pursuant to Section 2.13, the 15th day of the preceding month.
"Redemption Date" means (a) in the case of a redemption of the Notes pursuant
to Section 10.01(a) or a payment to Noteholders pursuant to Section 10.01(c),
the Distribution Date specified by the Servicer or the Issuer pursuant to
Section 10.01(a) or (c), as applicable, or (b) in the case of a redemption of
Notes pursuant to Section 10.01(b), the Distribution Date specified in Section
5.08(b) of the Sale and Servicing Agreement on which the Indenture Trustee
shall withdraw any amount remaining in the Pre-Funding Account and deposit the
applicable amount thereof payable to any Class of Notes in the Note
Distribution Account.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a) or (b), an amount equal to the unpaid principal
amount of the Notes redeemed plus accrued and unpaid interest thereon at the
weighted average of the Interest Rates for each Class of Notes being so
redeemed to but excluding the Redemption Date, or (b) in the case of a payment
made to Noteholders pursuant to Section 10.01(c), the amount on deposit in the
Note Distribution Account, but not in excess of the amount specified in clause
(a) above.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above
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<PAGE> 13
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of _______________, 199_, among the Issuer, Chrysler Financial Corporation,
as Seller, and Chrysler Credit Corporation, as Servicer.
"Schedule of Receivables" means the listing of the Standard Receivables and
the Fixed Value Receivables set forth in Schedule A (which Schedule may be in
the form of microfiche), as supplemented as of each Subsequent Transfer Date.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" shall mean Chrysler Financial Corporation, in its capacity as seller
under the Sale and Servicing Agreement, and its successor in interest.
"Servicer" shall mean Chrysler Credit Corporation in its capacity as servicer
under the Sale and Servicing Agreement, and any Successor Servicer thereunder.
"State" means any one of the 50 States of the United States of America or the
District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Noteholders (including, without limitation,
all property and interests Granted to the Indenture Trustee), including all
proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
(b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
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"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other obligor
on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles as in effect
from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
The Notes
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, in each case together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibit A-1,
Exhibit A-2 and Exhibit A-3, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face of the Note.
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<PAGE> 15
The Definitive Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A-1, Exhibit A-2 and Exhibit A-3 are part of the
terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver Class
A-1 Notes for original issue in an aggregate principal amount of
$_____________, Class A-2 Notes for original issue in an aggregate principal
amount of $_____________ and Class A-3 Notes for original issue in an aggregate
principal amount of $____________. The aggregate principal amount of Class A-1
Notes, Class A-2 Notes and Class A-3 Notes outstanding at any time may not
exceed such respective amounts except as provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination $1,000[; provided that
the minimum denomination of the Class A-1 Notes shall be $1,000,000].
No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver in exchange
therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the
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<PAGE> 16
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
[SECTION 2.04. Limitations on Transfer of the Class A-1 Notes. The Class
A-1 Notes have not been and will not be registered under the Securities Act and
will not be listed on any exchange. No transfer of a Class A-1 Note shall be
made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under said Act and such state
securities laws. In the event that a transfer is to be made in reliance upon
an exemption from the Securities Act and state securities laws, in order to
assure compliance with the Securities Act and such laws, the Holder desiring to
effect such transfer and such Holder's prospective transferee shall each
certify to the Indenture Trustee and the Issuer in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit B (the
"Transferor Letter") and either Exhibit C (the "Investment Letter") or Exhibit
D (the "Rule 144A Letter"). Except in the case of a transfer as to which the
proposed transferee has provided a Rule 144A Letter, there shall also be
delivered to the Indenture Trustee an opinion of counsel that such transfer may
be made pursuant to an exemption from the Securities Act and state securities
laws, which opinion of counsel shall not be an expense of the Trust, the Owner
Trustee or the Indenture Trustee; provided that such opinion of counsel in
respect of the applicable state securities laws may be a memorandum of law
rather than an opinion if such counsel is not licensed in the applicable
jurisdiction. The Seller shall provide to any Holder of a Class A-1 Note and
any prospective transferee designated by any such Holder, information regarding
the Class A-1 Notes and the Receivables and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Class A-1 Note without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A.
Each Holder of a Class A-1 Note desiring to effect such a transfer shall, and
does hereby agree to, indemnify the Issuer, the Owner Trustee, the Indenture
Trustee and the Seller against any liability that may result if the transfer is
not so exempt or is not made in accordance with federal and state securities
laws.
The Owner Trustee shall cause each Class A-1 Note to contain a legend stating
that transfer of the Class A-1 Notes is subject to certain restrictions and
referring prospective purchasers of the Class A-1 Notes to this Section 2.04
with respect to such restrictions.]
SECTION 2.05. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe [and the
restrictions on transfers of the Class A-1 Notes set forth herein], the Issuer
shall provide for the registration of Notes and the registration of transfers
of Notes. The Indenture Trustee initially shall be the "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer
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thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of the
same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of Notes shall
be the valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of transfer
or exchange of Notes, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuer shall execute, and upon its request the Indenture Trustee
shall authenticate and deliver, in exchange for or
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in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note of the same Class; provided, however, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or within seven days
shall be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note
(or such payment) from the Person to whom it was delivered or any Person taking
such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Issuer or
the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer may
require the payment by the Holder of such Note of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the
contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest. (a)
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes shall accrue
interest at the Class A-1 Interest Rate, the Class A-2 Interest Rate and the
Class A-3 Interest Rate, respectively, as set forth in Exhibits A-1, A-2 and
A-3, respectively, and such interest shall be payable on each Distribution Date
as specified therein, subject to Section 3.01. Any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly provided
for by the Issuer on the applicable Distribution Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the Record Date by check mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.13, with respect
to Notes registered on the Record Date in the name of the nominee of the
Clearing
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Agency (initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Distribution Date or on the applicable Final Scheduled
Distribution Date (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.01(a)), which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in Exhibit
A-1, Exhibit A-2 and Exhibit A-3. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02. All principal payments on each Class of Notes shall
be made pro rata to the Noteholders of such Class entitled thereto. The
Indenture Trustee shall notify the Person in whose name a Note is registered at
the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the Issuer
shall pay defaulted interest (plus interest on such defaulted interest to the
extent lawful) at the applicable Interest Rate in any lawful manner. The
Issuer may pay such defaulted interest to the persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by
the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by
an Issuer Order that they be destroyed or returned to it; provided, that such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture
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only upon receipt of an Issuer Request accompanied by an Officer's Certificate,
an Opinion of Counsel and Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(l) or an Opinion of Counsel in lieu of such
Independent Certificates to the effect that the TIA does not require any such
Independent Certificates.
SECTION 2.11. Book-Entry Notes. The Notes [(other than the Class A-1
Notes)], upon original issuance, will be issued in the form of typewritten
Notes representing the Book-Entry Notes, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.
[The Class A-1 Notes will be issued on the Closing Date in the form of a single
typewritten Definitive Note, which will be purchased by and registered in the
name of the Seller.] The Book-Entry Notes shall be registered initially on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Owner thereof will receive a definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.13. Unless
and until definitive, fully registered Notes (the "Definitive Notes") have been
issued to such Note Owners pursuant to Section 2.13:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to deal
with the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with any
other provisions of this Indenture, the provisions of this Section shall
control;
(iv) the rights of Note Owners shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Note Owners and the Clearing Agency and/or the Clearing Agency
Participants pursuant to the Note Depository Agreement. Unless and until
Definitive Notes are issued pursuant to Section 2.13, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and interest on the Notes
to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of Holders of Notes evidencing a specified
percentage of the Outstanding Amount of the Notes, the Clearing Agency shall
be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage
of the beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders [(other than Holders of the Class A-1 Notes)]
is required under this Indenture, unless and until Definitive Notes shall have
been issued to such Note Owners pursuant to Section 2.13, the Indenture Trustee
shall give all such notices and communications specified herein to be given to
Holders of the Notes to the Clearing Agency, and shall have no obligation to
such Note Owners.
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SECTION 2.13. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default or a Servicer Default, Owners of
the Book-Entry Notes representing beneficial interests aggregating at least a
majority of the Outstanding Amount of such Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of such Note Owners, then the
Clearing Agency shall notify all Note Owners and the Indenture Trustee of the
occurrence of such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.14. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer secured by the Trust Estate. The Issuer,
by entering into this Indenture, and each Noteholder, by its acceptance of a
Note (and each Note Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing
Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2
Noteholders, and (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby
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initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.02(c) shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day preceding each Distribution Date and Redemption
Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with respect
to the Notes in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer (or any
other obligor upon the Notes) of which it has actual knowledge in the making
of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
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The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same
trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Indenture Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The
Indenture Trustee shall also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent,
at the last address of record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the priority
thereof) of this Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant made
or to be made by this Indenture;
(iii) enforce any of the Collateral; or
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(iv) preserve and defend title to the Trust Estate and the rights of the
Indenture Trustee and the Noteholders in such Trust Estate against the claims
of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements,
as are necessary to perfect and make effective the lien and security interest
of this Indenture and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before ____________________ in each calendar year, beginning in
199_, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until ______________ in the following
calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables. (a)
The Issuer will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of such
Person's material covenants or obligations under any instrument or agreement
included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of
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this Indenture and the Sale and Servicing Agreement in accordance with and
within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee or the Holders of at least a majority of the
Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall specify
in such notice the action, if any, the Issuer is taking with respect of such
default. If a Servicer Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Sale and Servicing Agreement
with respect to the Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 8.01 of the
Sale and Servicing Agreement, the Issuer shall appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in such
event will be released from such duties and obligations, such release not to be
effective until the date a new servicer enters into a servicing agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the Sale
and Servicing Agreement. Any Successor Servicer other than the Indenture
Trustee shall (i) be an established financial institution having a net worth of
not less than $100,000,000 and whose regular business includes the servicing of
Contracts and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with
any such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one of its affiliates,
provided that it shall be fully liable for the actions and omissions of such
affiliate in such capacity as Successor Servicer.
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(f) Upon any termination of the Servicer's rights and powers pursuant to the
Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee. As soon as a Successor Servicer is appointed, the Issuer shall notify
the Indenture Trustee of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted to
the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee or the Holders of at least a majority
in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral (except to the extent
otherwise provided in the Sale and Servicing Agreement) or the Basic Documents,
or waive timely performance or observance by the Servicer or the Seller under
the Sale and Servicing Agreement; and (ii) that any such amendment shall not
(A) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, distributions that are required to be made for the benefit of the
Noteholders or (B) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the Holders
of all the outstanding Notes. If any such amendment, modification, supplement
or waiver shall be so consented to by the Indenture Trustee or such Holders,
the Issuer agrees, promptly following a request by the Indenture Trustee to do
so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture Trustee
may deem necessary or appropriate in the circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the Issuer, including
those included in the Trust Estate, unless directed to do so by the Indenture
Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on any of
the Financed Vehicles and arising solely as a result of an action or omission
of the related Obligor) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate.
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SECTION 3.09. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year 199_), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of its
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the Issuer,
any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation or
merger and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person, unless:
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(i) the Person that acquires by conveyance or transfer the properties and
assets of the Issuer the conveyance or transfer of which is hereby restricted
shall (A) be a United States citizen or a Person organized and existing under
the laws of the United States of America or any State, (B) expressly assumes,
by an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes, and (E) expressly agrees by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act in
connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the Issuer,
any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), Premier Auto Trust 199_-_ will be released
from every covenant and agreement of this Indenture to be observed or performed
on the part of the Issuer with respect to the Notes immediately upon the
delivery of written notice to the Indenture Trustee stating that Premier Auto
Trust 199_-_ is to be so released.
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SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Standard Receivables and Fixed Value Receivables in the manner contemplated by
this Indenture and the Basic Documents and activities incidental thereto.
After the Funding Period, the Issuer shall not fund the purchase of any new
Contracts, except Eligible Investment Receivables purchased with funds in the
Reserve Account.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Fixed Value Securities as provided in
Section 2.04 of the Sale and Servicing Agreement.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.09(b) and Article IX of
the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Owner Trustee and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under,
the Sale and Servicing Agreement or the Trust Agreement and (y) payments to the
Indenture Trustee pursuant to Section 1(a)(ii) of the Administration Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller of
its obligations under the Sale and
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Servicing Agreement and each default on the part of the Company or the Seller
of its obligations under the Purchase Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02), and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.06 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Class A-3 Final Scheduled
Distribution Date within one year, or
c. are to be called for redemption within one year under arrangements
satisfactory to the Indenture Trustee for the giving of notice of redemption
by the Indenture Trustee in the name, and at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the
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date such amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due to
the applicable Final Scheduled Distribution Date or Redemption Date (if Notes
shall have been called for redemption pursuant to Section 10.01(a)), as the
case may be;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01(a)
and, subject to Section 11.02, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of five
days; or
(ii) default in the payment of the principal of or any installment of the
principal of any Note when the same becomes due and payable; or
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(iii) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured, for
a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part
of the Trust Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Trust Estate, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an order
for relief in an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer
or for any substantial part of the Trust Estate, or the making by the Issuer
of any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (iii), its status and what action the Issuer is
taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately due
and payable.
At any time after such declaration of acceleration of maturity has been made
and before a judgment or decree for payment of the money due has been obtained
by the
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Indenture Trustee as hereinafter in this Article V provided, the Holders of
Notes representing a majority of the Outstanding Amount of the Notes, by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Notes and all other
amounts that would then be due hereunder or upon such Notes if the Event of
Default giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal of
the Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in
the payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of five days, or (ii) default is made
in the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer will, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the Holders
of the Notes, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the rate borne by the Notes and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the moneys adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 5.04, in its discretion, proceed
to protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
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(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a result
of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of Notes in any election of a trustee, a standby trustee or
Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
or the Holders of Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of
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any Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of
the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any
other appropriate action to protect and enforce the rights and remedies of
the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any
manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.01(i) or (ii), unless (A) the Holders of 100%
of the Outstanding Amount of the Notes consent thereto, (B) the proceeds of
such sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal
and interest or (C) the Indenture Trustee determines that the Trust Estate will
not continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Holders of 66-2/3% of the Outstanding Amount of the Notes. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
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investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
interest (including any premium), ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for interest
(including any premium);
THIRD: to Holders of the Class A-1 Notes for amounts due and unpaid on the
Class A-1 Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A-1 Notes for
principal, until the Outstanding Amount of the Class A-1 Notes is reduced to
zero;
FOURTH: to Holders of the Class A-2 Notes for amounts due and unpaid on
the Class A-2 Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A-2 Notes for
principal, until the Outstanding Amount of the Class A-2 Notes is reduced to
zero;
FIFTH: to Holders of the Class A-3 Notes for amounts due and unpaid on the
Class A-3 Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A-3 Notes for
principal, until the Outstanding Amount of the Class A-3 Notes is reduced to
zero; and
SIXTH: to the Issuer for amounts required to be distributed to the
Certificateholders pursuant to the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be paid.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Trust Estate. In determining whether to maintain possession of the
Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
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SECTION 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings; and
(v) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Holders of a majority
of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder,
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and thereafter all rights and remedies of the Indenture Trustee and the
Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or with
this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders
of Notes representing not less than 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied and
the Indenture Trustee elects to retain the Trust Estate pursuant to such
Section, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights
of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes may waive any past Default or Event of Default and its
consequences except a Default (a) in the payment of principal of
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or interest on any of the Notes or (b) in respect of a covenant or provision
hereof that cannot be modified or amended without the consent of the Holder of
each Note. In the case of any such waiver, the Issuer, the Indenture Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to have
been cured and not to have occurred, and any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Indenture Trustee for any action taken, suffered or omitted by
it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by
the Indenture Trustee shall be applied in accordance with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or
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secure the performance and observance by the Seller and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement or by the Seller or the Company, as
applicable, of each of their obligations under or in connection with the
Purchase Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Sale and Servicing Agreement to the extent and in the manner directed by the
Indenture Trustee, including the transmission of notices of default on the part
of the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be in writing or by
telephone, confirmed in writing promptly thereafter) of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller or the Servicer
under or in connection with the Sale and Servicing Agreement, or against the
Company or the Seller under or in connection with the Purchase Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller or the Servicer, or the Company or the Seller, as
the case may be, of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension, or waiver
under the Sale and Servicing Agreement or the Purchase Agreement, as the case
may be, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Indenture Trustee and conforming to the requirements of this Indenture;
however, the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided,
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however, that such action or omission by the Indenture Trustee does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the Notes, or responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall or shall
cause the Administrator to pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall or shall cause the Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall or shall cause the
Administrator to indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The
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Issuer shall or shall cause the Administrator to defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Administrator to pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
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If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or desirable.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the
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Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed
with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition and it or its parent shall have a long-term debt rating of Baa3 or
better by Moody's or shall otherwise be acceptable to Moody's. The Indenture
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses. The
Indenture Trustee shall use its best efforts to maintain the effectiveness of
all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act in
connection with this Indenture and
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the transactions contemplated hereby until the lien and security interest of
this Indenture shall no longer be in effect in accordance with the terms
hereof.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note Registrar,
no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance with
the rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA Section 313(c)) such
summaries of any
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information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each February 1 beginning with February 1, 199_,
the Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 5.01 of the Sale
and Servicing Agreement.
(b) On or before each Distribution Date, the Total Distribution Amount with
respect to the preceding Collection Period will be deposited in the Collection
Account as provided in Section 5.02 of the Sale and Servicing Agreement. On or
before each Distribution Date, all amounts required to be deposited in the Note
Distribution Account with respect to the preceding Collection Period (or, in
the case of the Noteholders Reconciliation Principal Adjustment Amount, the
second preceding Collection Period) pursuant to Sections 5.06 and 5.07 of the
Sale and Servicing Agreement will be transferred from the Collection Account
and/or the Reserve Account to the Note Distribution Account.
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(c) On each Distribution Date and Redemption Date, the Indenture Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal and interest (including any premium) in the following
amounts and in the following order of priority (except as otherwise provided in
Section 5.04(b)):
(i) accrued and unpaid interest on the Notes; provided, that if there are not
sufficient funds in the Note Distribution Account to pay the entire amount of
accrued and unpaid interest then due on the Notes, the amount in the Note
Distribution Account shall be applied to the payment of such interest on the
Notes pro rata on the basis of the total such interest due on the Notes;
(ii) only to the extent of funds withdrawn from the Pre-Funding Account and
deposited in the Note Distribution Account by the Indenture Trustee pursuant
to Section 5.08(b)(i) and (ii) of the Sale and Servicing Agreement:
(A) if the amount of such funds is equal to or less than $________, to
the Holders of the Class A-1 Notes on account of principal up to the
Outstanding Amount thereof, and then to the Holders of the Class A-2 Notes;
and
(B) if the amount of such funds is greater than $_______, pro rata, to
the Holders of the Class A-1 Notes, the Holders of the Class A-2 Notes and
the Holders of the Class A-3 Notes based on the initial Outstanding Amount
of each such Class, in each case to reduce the Outstanding Amount of each
such Class;
(iii) if the amount distributed pursuant to clause (ii) above is greater
than $_______ and then only to the extent of funds deposited in the Note
Distribution Account by the Seller pursuant to Section 2.02(c) and the last
sentence of Section 5.08(b) of the Sale and Servicing Agreement, to (a) the
Holders of the Class A-1 Notes, an amount equal to such Class's Noteholders'
Prepayment Premium, (b) the Holders of the Class A-2 Notes, an amount equal
to such Class's Noteholders' Prepayment Premium, and (c) the Holders of the
Class A-3 Notes, an amount equal to such Class's Noteholders' Prepayment
Premium;
(iv) to the Holders of the Class A-1 Notes on account of principal until
the Outstanding Amount of the Class A-1 Notes is reduced to zero;
(v) to the Holders of the Class A-2 Notes on account of principal until
the Outstanding Amount of the Class A-2 Notes is reduced to zero; and
(vi) to the Holders of the Class A-3 Notes on account of principal until
the Outstanding Amount of the Class A-3 Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order, subject
to the provisions of Section 5.01(b) of the Sale and Servicing Agreement. All
income or other gain from investments of moneys deposited in the
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Trust Accounts shall be deposited by the Indenture Trustee in the Collection
Account, and any loss resulting from such investments shall be charged to such
account. The Issuer will not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Trust
Accounts unless the security interest Granted and perfected in such account
will continue to be perfected in such investment or the proceeds of such sale,
in either case without any further action by any Person, and, in connection
with any direction to the Indenture Trustee to make any such investment or
sale, if requested by the Indenture Trustee, the Issuer shall deliver to the
Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee,
to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the Notes
shall not have been declared due and payable pursuant to Section 5.02 or (iii)
if such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Trust Estate are being
applied in accordance with Section 5.05 as if there had not been such a
declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Trust Accounts in one or more
Eligible Investments.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and
when required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying upon
an instrument executed by the Indenture Trustee as provided in this Article
VIII shall be bound to ascertain the Indenture Trustee's authority, inquire
into the satisfaction of any conditions precedent or see to the application of
any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that secured
the Notes from the lien of this Indenture and release to the Issuer or any
other Person entitled thereto any funds then on deposit in the Trust Accounts.
The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.04(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c)
and 314(d)(1) meeting the applicable requirements of Section 11.01.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that promptly
following the Closing Date and each Subsequent Transfer Date the Indenture
Trustee shall
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release the lien of this Indenture on each Fixed Value Payment assigned by the
Issuer to the Company, and consents to such release.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Holders
of the Notes, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision herein
or in any supplemental indenture that may be inconsistent with any other
provision herein or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising under this Indenture
or in any supplemental indenture;
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provided, that such action shall not adversely affect the interests of the
Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Holders of
not less than a majority of the Outstanding Amount of the Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provisions of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to payment of principal of
or interest on the Notes, or change any place of payment where, or the coin
or currency in which, any Note or the interest thereon is payable, or impair
the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided
in Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or after
the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Holders of which is required for any such supplemental
indenture, or the
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consent of the Holders of which is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any percentage
specified herein or to provide that certain additional provisions of this
Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal
due on any Note on any Distribution Date (including the calculation of any of
the individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying
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upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the
Notes shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. (a) The Class A-3 Notes are subject to
redemption in whole, but not in part, at the direction of the Servicer pursuant
to Section 9.01(a) of the Sale and Servicing Agreement, on any Distribution
Date on which the Servicer exercises its option to purchase the Trust Estate
pursuant to said Section 9.01(a), for a purchase price equal to the Redemption
Price; provided, that the Issuer has available funds sufficient to pay the
Redemption Price. The Servicer or the Issuer shall furnish the Rating
Agencies notice of such redemption. If the Class A-3 Notes are to be redeemed
pursuant to this Section 10.01(a), the Servicer or the Issuer shall furnish
notice of such election to the Indenture Trustee not later than 20 days prior
to the Redemption Date and the Issuer shall deposit by 10:00 A.M. New York City
time on the Redemption Date with the Indenture Trustee in the Note Distribution
Account the Redemption Price of the Class A-3 Notes to be redeemed, whereupon
all such Class A-3 Notes shall be due and payable on the Redemption Date upon
the furnishing of a notice complying with Section 10.02 to each Holder of the
Notes.
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(b) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on which the Funding Period ends (or, if the Funding Period
does not end on a Distribution Date, on the first Distribution Date following
the end of the Funding Period) or (y) the Pre-Funded Amount has been reduced
to $_________ or less on any Distribution Date, in either case after giving
effect to any reductions in the Pre-Funded Amount on such Distribution Date
pursuant to Section 5.08(a) of the Sale and Servicing Agreement, one or more
classes of Notes then Outstanding will be redeemed, in whole or in part, as
described in Section 8.02(c)(ii) in a principal amount described therein.
If on the Distribution Date on which the Funding Period ends (or if the
Funding Period does not end on a Distribution Date, on the first Distribution
Date following the end of the Funding Period) the amount on deposit in the
Pre-Funding Account is greater than $______, the Indenture Trustee shall
distribute to the holders of the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, on the Redemption Date, in each case a premium equal to such
Class's Noteholders' Prepayment Premium pursuant to Section 8.02(c)(iii);
provided, however, that, notwithstanding anything to the contrary contained in
Section 8.02(c)(iii) or elsewhere in the Indenture or the Notes, the Issuer's
obligation to pay the aggregate Noteholders' Prepayment Premium shall be
limited solely to funds that are deposited by the Seller in the Note
Distribution Account pursuant to Section 2.02(c) and the last sentence of
Section 5.08(b) of the Sale and Servicing Agreement as liquidated damages for
the failure of the Seller to deliver Receivables, and no other assets of the
Issuer will be available to pay the aggregate Noteholders' Prepayment Premium
under any circumstances.
(c) In the event that the assets of the Trust are sold pursuant to Section
9.02 of the Trust Agreement, all amounts on deposit in the Note Distribution
Account shall be paid to the Noteholders up to the Outstanding Amount of the
Notes and all accrued and unpaid interest thereon. If amounts are to be paid
to Noteholders pursuant to this Section 10.01(c), the Servicer or the Issuer
shall, to the extent practicable, furnish notice of such event to the Indenture
Trustee not later than 20 days prior to the Redemption Date, whereupon all such
amounts shall be payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice. (a) Notice of redemption
under Section 10.01(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, or by facsimile mailed or transmitted not later than 10
days prior to the applicable Redemption Date to each Holder of Notes, as of the
close of business on the Record Date preceding the applicable Redemption Date,
at such Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.02).
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Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
(b) Prior notice of redemption under Sections 10.01(b) and 10.01(c) is not
required to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02 (in the case of redemption pursuant to Section 10.01(a)), on the
Redemption Date become due and payable at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable requirements
of this Section, except that, in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with.
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(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the securities to be so deposited
and of all other such securities made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of the Issuer,
as set forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but
such a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (iii) above, the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than property as contemplated by clause (v) below or
securities released from the lien of this Indenture since the commencement of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be furnished
in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.10 or any other provision of this Section,
the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise dispose
of Receivables, Eligible Investment Receivables and Financed Vehicles as and
to the extent permitted or required by the Basic Documents, (B) make cash
payments out of the Trust Accounts as and to the extent permitted or required
by the Basic Documents and (C) convey to the Seller each Fixed Value Payment
in accordance with Section 8.04(c), so long as the Issuer shall deliver to
the Indenture Trustee every six months, commencing December 15, 199_, an
Officer's Certificate of the Issuer stating that all the
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<PAGE> 57
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the preceding six calendar months were in the ordinary course
of the Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or certificate
or report to the Indenture Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
52
<PAGE> 58
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: Premier Auto Trust 199_-_, in
care of ________________________________, Attention of __________________, or
at any other address previously furnished in writing to the Indenture Trustee
by the Issuer or the Administrator. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Group, 26 Broadway (15th Floor), New York, New York 10004, Attention of
Asset Backed Surveillance Department, (iii) in the case of Fitch's Investors
Service, Inc., at the following address: One State Street Plaza, New York,
N.Y. 10004, and (iv) in the case of Duff & Phelps Credit Rating Company at the
following address: 55 E. Monroe Street (35th Floor), Chicago, Illinois 60603;
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such
53
<PAGE> 59
notice. In any case where notice to Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a
strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be
a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event
of Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method
of payment, or notice by the Indenture Trustee or any Paying Agent to such
Holder, that is different from the methods provided for in this Indenture for
such payments or notices. The Issuer will furnish to the Indenture Trustee a
copy of each such agreement and the Indenture Trustee will cause payments to be
made and notices to be given in accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co- trustees and agents.
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<PAGE> 60
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer
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<PAGE> 61
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust
Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against Premier or the Issuer, or join
in any institution against Premier or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all
such information except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are unavailing) and
except to the extent that the Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.
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<PAGE> 62
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
PREMIER AUTO TRUST 199_-_,
by: _______________________________,
not in its individual capacity but
solely as Owner Trustee
by: _______________________________
Name:
Title:
_______________________________,
not in its individual
capacity but solely as Indenture Trustee
by: _____________________________
Name:
Title:
<PAGE> 63
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said county
and state, on this day personally appeared ________________, known to me to be
the person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said PREMIER AUTO TRUST
199_, a Delaware business trust, and that such person executed the same as the
act of said business trust for the purpose and consideration therein expressed,
and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of __________, 199_.
______________________________________________
Notary Public in and for the State of New York.
[Seal]
My commission expires:
________________________________________________
<PAGE> 64
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said county
and state, on this day personally appeared ____________________, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of ________________, a ______
banking corporation, and that such person executed the same as the act of said
corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _______ day of _________ , 199_.
______________________________________________
Notary Public in and for the State of New York.
[Seal]
My commission expires:
________________________________________
<PAGE> 65
SCHEDULE A
(To be Provided at the Closing and Supplemented on each
Subsequent Transfer Date on which Subsequent Receivables are transferred to
the Trust)
<PAGE> 66
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
RESTRICTIONS AND CONDITIONS SET FORTH IN THE INDENTURE UNDER WHICH THIS NOTE IS
ISSUED (A COPY OF WHICH IS AVAILABLE FROM THE OWNER TRUSTEE OR INDENTURE
TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE AND THE INDENTURE
TRUSTEE OF AN INVESTMENT LETTER IN WHICH THE TRANSFEREE MAKES CERTAIN
REPRESENTATIONS.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $___________________
No. ___
PREMIER AUTO TRUST 199_-_
CLASS A-1 ________% ASSET BACKED NOTES
Premier Auto Trust 199_-_, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Chrysler Financial Corporation,
or registered assigns, the principal sum of _________________________________
__________________________________________________ DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $_____________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-1 Notes pursuant to Section 3.01 of the Indenture dated as of _______
____________, 199_, between the Issuer and ___________________, a ___________
banking corporation, as Indenture Trustee (the "Indenture Trustee"); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the earlier of the ____________ Distribution Date (the "Class A-1
Final Scheduled Distribution Date") and the Redemption Date, if any, pursuant
to Section 10.01(a) of the Indenture. Capitalized terms used but not defined
herein are defined in Article I of the Indenture, which also contains rules as
to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the second day of the month
preceding the month of such
<PAGE> 67
Distribution Date (in the case of the first Distribution Date, from the
Closing Date) to and including the first day of the month of such Distribution
Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: PREMIER AUTO TRUST 199_-_,
by: [___________________________],
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
by: _______________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [___________________________], not
in its individual capacity but solely
as Indenture Trustee,
by: __________________________________
Authorized Signatory
A-1-2
<PAGE> 68
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 _______% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(collectively, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
second day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ______________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class A-1 Notes shall be made pro rata to the Class A-1
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding
such Distribution Date by notice mailed or transmitted by facsimile prior to
such Distribution Date, and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
A-1-3
<PAGE> 69
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed, in
whole or in part, on the Distribution Date on which the Funding Period ends (or
on the Distribution Date immediately following the last day of the Funding
Period, if the Funding Period does not end on a Distribution Date), in the
manner and to the extent described in the Indenture and the Sale and Servicing
Agreement, in the event that any amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all Receivables, including any
such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or
agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, Premier or the Issuer, or join in
any institution against the Seller, Premier or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
A-1-4
<PAGE> 70
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
A-1-5
<PAGE> 71
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of _________________________ in its
individual capacity, ___________________________ in its individual capacity,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
A-1-6
<PAGE> 72
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
______________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _________________ ______________________________*/
Signature Guaranteed:
_________________________*/
________________________
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in STAMP or
such other "signature guarantee program" as may be determined by the
Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-1-7
<PAGE> 73
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $______
No. ___ CUSIP NO. ____
PREMIER AUTO TRUST 199_-_
CLASS A-2 _____% ASSET BACKED NOTES
Premier Auto Trust 199_-_, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum [ ] DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $ [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $______________ by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture
dated as of _____________, 199_, between the Issuer and ___________________ , a
_______________ banking corporation, as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the ____________ Distribution
Date (the "Class A-2 Final Scheduled Distribution Date") and the Redemption
Date, if any, pursuant to Section 10.01(a) of the Indenture. No payments of
principal on the Class A-2 Notes shall be made until the Class A-1 Notes have
been paid in full. Capitalized terms used but not defined herein are defined
in Article I of the Indenture, which also contains rules as to construction
that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the second day of the month
preceding the month of such
<PAGE> 74
Distribution Date (in the case of the first Distribution Date, from the Closing
Date) to and including the first day of the month of such Distribution Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: PREMIER AUTO TRUST 199_-_,
by: [______________________________], not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
by: ______________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [________________________________],
not in its individual capacity but
solely as Indenture Trustee,
by: ______________________________
Authorized Signatory
A-2-2
<PAGE> 75
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 ____% Asset Backed Notes (herein called the "Class
A-2 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-2 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(collectively, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
second day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ________________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class A-2 Notes shall be made pro rata to the Class A-2
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding
such Distribution Date by notice mailed or transmitted by facsimile prior to
such Distribution Date, and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
A-2-3
<PAGE> 76
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-2 Notes may be redeemed in
part on the Distribution Date on which the Funding Period ends (or on the
Distribution Date immediately following the last day of the Funding Period, if
the Funding Period does not end on a Distribution Date), in the manner and to
the extent described in the Indenture and the Sale and Servicing Agreement, in
the event that any amount remains on deposit in the Pre-Funding Account after
giving effect to the purchase of all Receivables, including any such purchase
on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or
agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, Premier or the Issuer, or join in
any institution against the Seller, Premier or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
A-2-4
<PAGE> 77
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
A-2-5
<PAGE> 78
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of _______________________ in its
individual capacity, __________________________________ in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
A-2-6
<PAGE> 79
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: __________________________ _________________________________*/
Signature Guaranteed:
___________________________*/
________________________
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in STAMP or
such other "signature guarantee program" as may be determined by the
Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-2-7
<PAGE> 80
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $________
No. CUSIP NO. _____________
PREMIER AUTO TRUST 199_-_
CLASS A-3 _____% ASSET BACKED NOTES
Premier Auto Trust 199_-_, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of [ ] DOLLARS payable on each Distribution
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $ [INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the
denominator of which is $_____________ by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-3 Notes pursuant to Section 3.01 of the Indenture dated as of ____________,
199_, between the Issuer and _______________________, a ______________ banking
corporation, as Indenture Trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Note shall be due and payable
on the earlier of the ______________ Distribution Date (the "Class A-3 Final
Scheduled Distribution Date") and the Redemption Date, if any, pursuant to
Section 10.01(a) of the Indenture. No payments of principal of the Class A-3
Notes shall be made until the Class A-1 Notes and the Class A-2 Notes have been
paid in full. Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to construction that
shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the second day of the month
preceding the month of such
<PAGE> 81
Distribution Date (in the case of the first Distribution Date, from the Closing
Date) to and including the first day of the month of such Distribution
Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: PREMIER AUTO TRUST 199_-_,
by: [_____________________], not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement,
by: __________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [______________________________], not in
its individual capacity but solely as
Indenture Trustee,
by: ______________________________
Authorized Signatory
A-3-2
<PAGE> 82
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 _____% Asset Backed Notes (herein called the
"Class A-3 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-3 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
(collectively, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
second day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ________________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-3 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class A-3 Notes shall be made pro rata to the Class A-3
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding
such Distribution Date by notice mailed or transmitted by facsimile prior to
such Distribution Date, and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
A-3-3
<PAGE> 83
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-3 Notes may be redeemed (a)
in whole, but not in part, at the option of the Servicer, on any Distribution
Date on and after the date on which the Pool Balance is less than or equal to
10% of the Original Pool Balance and (b) in part on the Distribution Date on
which the Funding Period ends (or on the Distribution Date immediately
following the last day of the Funding Period, if the Funding Period does not
end on a Distribution Date), in the manner and to the extent described in the
Indenture and the Sale and Servicing Agreement, in the event that an amount in
excess of $100,000 remains on deposit in the Pre-Funding Account after giving
effect to the purchase of all Receivables, including any such purchase on such
Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or
agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, Premier or the Issuer, or join in
any institution against the Seller, Premier or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
A-3-4
<PAGE> 84
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay
A-3-5
<PAGE> 85
the principal of and interest on this Note at the times, place and rate, and in
the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of _________________________ in its
individual capacity, ____________________ in its individual capacity, any owner
of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
A-3-6
<PAGE> 86
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _________________ ______________________________________*/
Signature Guaranteed:
________________________________*/
________________________
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in STAMP or
such other "signature guarantee program" as may be determined by the
Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-3-7
<PAGE> 87
EXHIBIT B
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 199_-_
% Class A-1 Asset Backed Notes
Ladies and Gentlemen:
In connection with our disposition of the above-referenced __________%
Class A-1 Asset Backed Notes (the "Notes") we certify that (a) we understand
that the Notes have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being transferred by us in a transaction that is
exempt from the registration requirements of the Act and (b) we have not
offered or sold any Notes to, or solicited offers to buy any Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action which
would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: __________________________
Authorized Officer
B-1
<PAGE> 88
EXHIBIT C
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 199_-_
% Class A-1 Asset Backed Notes
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced _________%
Class A-1 Asset Backed Notes (the "Notes) we certify that (a) we understand
that the Notes are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we are an "accredited investor," as defined in
Regulation D under the Act, and have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and risks of
investments in the Notes, (c) we have had the opportunity to ask questions of
and receive answers from the seller concerning the purchase of the Notes and
all matters relating thereto or any additional information deemed necessary to
our decision to purchase the Notes, (d) we are acquiring the Notes for
investment for our own account and not with a view to any distribution of such
Notes (but without prejudice to our right at all times to sell or otherwise
dispose of the Notes in accordance with clause (f) below), (e) we have not
offered or sold any Notes to, or solicited offers to buy any Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section
5 of the Act or any state securities laws and (f) we will not sell, transfer or
otherwise dispose of any Notes unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act and in compliance with any relevant state securities laws or is exempt from
such registration requirements and, if requested, we will at our expense
provide an opinion of counsel satisfactory to the addressees of this
certificate that such sale, transfer or other disposition may be made pursuant
to an exemption from the Act, (2) the purchaser or transferee of such Note has
executed and delivered to you a certificate to substantially the same effect as
this certificate and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Indenture dated as of
___________, 199_ between Premier Auto Trust 199_-_ and ______________________
as Indenture Trustee.
Very truly yours,
[NAME OF TRANSFEREE]
By: __________________
Authorized Officer
C-1
<PAGE> 89
EXHIBIT D
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 199_-_
_______% Class A-1 Asset Backed Notes
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced _______%
Class A-1 Asset Backed Notes (the "Notes) we certify that (a) we understand
that the Notes are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and risks of
investments in the Notes, (c) we have had the opportunity to ask questions of
and receive answers from the seller concerning the purchase of the Notes and
all matters relating thereto or any additional information deemed necessary to
our decision to purchase the Notes, (d) we have not, nor has anyone acting on
our behalf, offered, transferred, pledged, sold or otherwise disposed of the
Notes, any interest in the Notes or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Notes, any interest in the Notes or any other similar security from or
otherwise approached or negotiated with respect to the Notes, any interest in
the Notes or any other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in any other
manner, or taken any other action that would constitute a distribution of the
Notes under the Act or that would render the disposition of the Notes a
violation of Section 5 of the Act or any state securities laws or require
registration pursuant thereto, and we will not act, or authorize any person to
act, in such manner with respect to the Notes, (e) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Act. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Notes for our own account or for resale pursuant to Rule 144A and
understand that such Notes may be resold, pledged or transferred only (i) to a
person reasonably believed to be a qualified institutional buyer that
D-1
<PAGE> 90
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A or (ii) pursuant to another exemption from
registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By: ______________
Authorized Officer
D-2
<PAGE> 1
EXHIBIT 4.3
===================================================================
FORM OF POOLING AND SERVICING AGREEMENT
among
CHRYSLER FINANCIAL CORPORATION
as Seller,
CHRYSLER CREDIT CORPORATION
as Servicer
and
( )
as Trustee
on behalf of the Certificateholders
Dated as of __________
PREMIER AUTO TRUST 199__-__
___% Asset Backed Certificates, Class A
___% Asset Backed Certificates, Class B
===================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Special Definitions and Terms
SECTION 1.01. Special Definitions and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Establishment of Trust
SECTION 2.01. Creation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Acceptance by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Conveyance of Receivables
SECTION 3.01. Conveyance of Initial Standard Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Conveyance of Subsequent Standard Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.03. Conveyance of Fixed Value Receivables to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
Incorporation of Standard Terms and Conditions
SECTION 4.01. Incorporation of Standard terms and Conditions of Agreement . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
Additional Representations and Warranties of the Seller
SECTION 5.01. Additional Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI
Additional Provisions Relating to Servicer
SECTION 6.01. Chrysler Credit Corporation Not to Resign as Servicer . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.02. Additional Covenant of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of Eligible Investment Receivables
</TABLE>
<PAGE> 3
POOLING AND SERVICING AGREEMENT dated as of __________, among CHRYSLER
FINANCIAL CORPORATION, a Michigan corporation, as seller (the "Seller"),
CHRYSLER CREDIT CORPORATION, a Delaware corporation, as servicer (the
"Servicer"), and ____________________, a ______________________ banking
corporation, as trustee (the "Trustee").
WHEREAS, the Seller owns or will acquire certain receivables arising in
connection with motor vehicle retail installment sale contracts (the
"Contracts") generated by Chrysler Credit Corporation in the ordinary course of
its business; and
WHEREAS, the Seller, the Servicer and the Trustee wish to set forth the
terms and conditions pursuant to which the Trust (as hereinafter defined) will
acquire the Contracts from the Seller, and the Servicer will service the
Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Seller, the Servicer and the Trustee
agree as follows:
ARTICLE I
Special Definitions and Terms
SECTION 1.01. Special Definitions and Terms. Capitalized terms
used and not defined herein have the meanings assigned thereto in the Standard
Terms and Conditions of Agreement. Whenever used in this Agreement and the
Standard Terms and Conditions of Agreement, the following words and phrases
shall have the following meanings:
"Agency Agreement" means the agreement dated as of the date hereof
among the Seller, the Servicer, the Trustee and the Agent.
"Agent" means ______________________, or a successor thereto.
"Agreement" means this Pooling and Servicing Agreement, including the
Standard Terms and Conditions of Agreement of Premier Auto Grantor Trusts,
dated as of __________, in the form attached hereto.
"Certificates" means the Class A Certificates and the Class B
Certificates.
"Class A Certificate" means a ___% Asset Backed Certificate, Class A,
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit A to the Standard Terms and Conditions of Agreement.
"Class A Pass-Through Rate" means ___%.
"Class A Percentage" means ___%.
<PAGE> 4
"Class A Prepayment Premium" means an amount equal to the excess, if
any, discounted as described below, of (i) the amount of interest that would
accrue on the Pre-Funded Percentage with respect to the Class A Certificates of
any remaining Pre-Funded Amount (the "Class A Prepayment Amount") at the Class
A Pass-Through Rate during the period commencing on and including the
Distribution Date on which such Class A Prepayment Amount is required to be
deposited in the Distribution Account pursuant to Section 14.08(b) to but
excluding ________________, over (ii) the amount of interest that would have
accrued on such Class A Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the
_____________________________. Such excess shall be discounted on a monthly
basis to present value to such Distribution Date at the yield described in
clause (ii) above.
"Class B Certificate" means a ___% Asset Backed Certificate, Class B,
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit B to the Standard Terms and Conditions of Agreement.
"Class B Pass-Through Rate" means ___%.
"Class B Percentage" means ___%.
"Class B Prepayment Premium" means an amount equal to the excess, if
any, discounted as described below, of (i) the amount of interest that would
accrue on the Pre-Funded Percentage with respect to the Class B Certificates of
any remaining Pre-Funded Amount (the "Class B Prepayment Amount") at the Class
B Pass-Through Rate during the period commencing on and including the
Distribution Date on which such Class B Prepayment Amount is required to be
deposited in the Distribution Account pursuant to Section 14.08(b) to but
excluding ________________, over (ii) the amount of interest that would have
accrued on such Class B Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the
_____________________________. Such excess shall be discounted on a monthly
basis to present value to such Distribution Date at the yield described in
clause (ii) above.
"Closing Date" means ______________________.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, which at the time of execution of this agreement is
______________________, Attention: ______________________.
"Depository Agreement" means the agreement dated _____________, among
the Trustee, the Administrator, and The
2
<PAGE> 5
Depository Trust Company, as the initial Clearing Agency, substantially in the
form attached as Exhibit C to the Standard Terms and Conditions of Agreement.
"Distribution Date" means, with respect to each Collection Period, the
_______ day of the following calendar month or, if such day is not a Business
Day, the immediately following Business Day, commencing on _________________.
"Final Scheduled Distribution Date" means ______________________.
"Final Scheduled Maturity Date" means ______________________.
"Funding Period" means the period beginning on and including the
Closing Date and ending on the first to occur of (a) the Determination Date on
which the amount on deposit in the Pre-Funding Account (after giving effect to
any transfers therefrom in connection with the transfer of Subsequent
Receivables to the Trustee on such Determination Date) is less than or equal to
$_____________, (b) the date on which an Event of Default occurs, (c) the date
on which an Insolvency Event occurs with respect to the Seller or the Servicer,
and (d) the Determination Date with respect to the ________________
Distribution Date.
"Initial Certificate Balance" means $______________________.
"Initial Class A Balance" means $______________________.
"Initial Class B Balance" means $______________________.
"Initial Collection Period" means the period beginning on, and
including, _______________ to and including _________________________.
"Initial Cutoff Date" means ______________________ with respect to
Initial Receivables that are Precomputed Receivables and ______________________
with respect to Initial Receivables that are Simple Interest Receivables.
"Initial Receivable" means any Standard Receivable conveyed to the
Trustee hereunder on the Closing Date and any Fixed Value Receivable conveyed
to the Agent on the Closing Date pursuant to the Agency Agreement.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account, which initially shall be
$________________.
"Reserve Account Initial Deposit" means, with respect to the Closing
Date and taking into account any transfer of Subsequent Receivables on such
date, an amount equal to the Specified Reserve
3
<PAGE> 6
Account Balance on the Closing Date (which is equal to $________________) and,
with respect to each Subsequent Transfer Date after the Closing Date, an amount
equal to ___% of the Principal Balance of the Subsequent Receivables
transferred to the Trust on such Subsequent Transfer Date.
"Servicing Rate" means ___% per annum.
"Specified Reserve Account Balance" means (STATE FORMULA).
"Standard Terms and Conditions of Agreement" means the Standard Terms
and Conditions of Agreement of Premier Auto Grantor Trusts, dated as of
______________________, in the form attached hereto.
"Subsequent Receivable" means any Subsequent Standard Receivable
conveyed to the Trustee hereunder on a Subsequent Transfer Date and any
Subsequent Fixed Value Receivable conveyed to the Agent on a Subsequent
Transfer Date pursuant to the Agency Agreement.
"Trustee" means ______________________, a ______________________
banking corporation, its successors in interest and any successor Trustee
hereunder.
ARTICLE II
Establishment of Trust
SECTION 2.01. Creation of Trust. Upon the execution of this
Agreement by the parties hereto, there is hereby created a separate trust,
which shall be known as Premier Auto Trust 199__-__ (the "Trust"). The Trust
shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders.
SECTION 2.02. Acceptance by Trustee. The Trustee hereby accepts
all consideration conveyed by the Seller pursuant to Section 3.01 and declares
that it will hold such consideration upon the trusts set forth herein for the
benefit of the Certificateholders, subject to the terms and provisions of this
Agreement.
4
<PAGE> 7
ARTICLE III
Conveyance of Receivables
SECTION 3.01. Conveyance of Initial Standard Receivables. In
consideration of the Trustee's delivery on the Closing Date to or upon the
order of the Seller of Class A Certificates in an initial aggregate principal
amount equal to the Initial Class A Balance and Class B Certificates in an
initial aggregate principal amount equal to the Initial Class B Balance, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Trustee for the benefit of the Certificateholders, without recourse (subject to
the obligations set forth herein), all right, title and interest of the Seller
in and to:
(1) the Initial Standard Receivables, and all moneys due
thereon on or after __________, in the case of Precomputed Receivables,
and all moneys received thereon on and after __________, in the case of
Simple Interest Receivables;
(2) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Initial Standard Receivables and
any other interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to the Initial Standard
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds from recourse to Dealers on Initial
Standard Receivables with respect to which the Servicer has determined
in accordance with its customary servicing procedures that eventual
payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such
Initial Standard Receivable and shall have been acquired by or on
behalf of the Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
SECTION 3.02. Conveyance of Subsequent Standard Receivables. (a)
Subject to the conditions set forth in paragraph (b) below, in consideration of
the Trustee's delivery on the related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 14.08(a), the Seller
does hereby sell,
5
<PAGE> 8
transfer, assign, set over and otherwise convey to the Trustee, for the benefit
of the Certificateholders, without recourse (subject to the obligations set
forth herein), all right, title and interest of the Seller in and to:
(1) the Subsequent Standard Receivables listed on
Schedule A to the related Subsequent Transfer Assignment, and all
moneys due thereon on or after the related Subsequent Cutoff Date in
the case of Precomputed Receivables, and all moneys received thereon on
and after the related Subsequent Cutoff Date in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Vehicles
granted by Obligors pursuant to such Subsequent Standard Receivables
and any other interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to such Subsequent Standard
Receivables from claims on any physical damage, credit life or
disability insurance policies covering the related Financed Vehicles or
Obligors;
(4) any proceeds from recourse to Dealers with respect to
Subsequent Standard Receivables in respect of which the Servicer has
determined in accordance with its customary servicing procedures that
eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such
Subsequent Standard Receivable and shall have been acquired by or on
behalf of the Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) (1) The Seller shall transfer to the Trustee, for the
benefit of the Certificateholders, the Subsequent Standard Receivables
and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions precedent on or prior to the related Subsequent Transfer
Date:
(i) the Seller shall have delivered to the
Trustee a duly executed Subsequent Transfer Assignment, which
shall include supplements to Schedule A listing the Subsequent
Receivables;
(ii) the Seller shall have deposited in the
Collection Account, to the extent required by Section 14.02,
all collections in respect of the Subsequent Receivables;
6
<PAGE> 9
(iii) as of each Subsequent Transfer Date, (A)
the Seller shall not be insolvent and shall not become
insolvent as a result of the transfer of Subsequent
Receivables on such Subsequent Transfer Date, (B) the Seller
shall not intend to incur or believe that it shall incur debts
that would be beyond its ability to pay as such debts mature,
(C) such transfer shall not have been made with actual intent
to hinder, delay or defraud any Person and (D) the assets of
the Seller shall not constitute unreasonably small capital to
carry out its business as conducted;
(iv) the applicable Reserve Account Initial
Deposit for such Subsequent Transfer Date shall have been made
pursuant to Section 14.08(a);
(v) the Funding Period shall not have
terminated;
(vi) the Subsequent Receivables transferred to
the Trustee pursuant hereto and to the Agent pursuant to the
Agency Agreement, including the Subsequent Receivables to be
so conveyed to the Trustee and the Agent on such Subsequent
Transfer Date, shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial
Cutoff Date and the Subsequent Receivables on the related
Subsequent Cutoff Dates): (A) not more than ___% of the
Principal Balances of the Receivables transferred to the
Trustee and the Agent, as applicable, shall represent vehicles
financed at CCC's used vehicle rates; and (B) the weighted
average APR of the Receivables transferred to the Trustee and
the Agent, as applicable, shall not be less than ___%, unless,
with the prior consent of the Rating Agencies, the Seller
increases the Reserve Account Initial Deposit by the
Additional Amount solely relating thereto; and the weighted
average remaining term of the Receivables transferred to the
Trustee and the Agent, as applicable, including the Subsequent
Receivables to be conveyed to the Trustee and the Agent on
such Subsequent Transfer Date, shall not be greater than ____
months;
(vii) each of the representations and warranties
made by the Seller pursuant to Section 12.01 with respect to
the Subsequent Receivables shall be true and correct as of the
related Subsequent Transfer Date, and the Seller shall have
performed all obligations to be performed by it hereunder on
or prior to such Subsequent Transfer Date;
(viii) the Seller shall, at its own expense, on or
prior to the Subsequent Transfer Date indicate in its computer
files that the Subsequent Standard Receivables
7
<PAGE> 10
identified in the Subsequent Transfer Assignment have been
sold to the Trustee pursuant to this Agreement;
(ix) the Seller shall have taken any action
required to maintain the first perfected ownership interest of
the Trustee in the Trust property;
(x) no selection procedures believed by the
Seller to be adverse to the interests of the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xi) the addition of any such Subsequent
Receivables shall not result in a material adverse tax
consequence to the Trust or the Certificateholders; and
(xii) the Seller shall have delivered to the
Trustee an Officers' Certificate confirming the satisfaction
of each condition precedent specified in this paragraph
(b)(1).
(2) In addition, any such conveyance of Subsequent
Standard Receivables made on one or more Subsequent Transfer Dates
occurring during any Collection Period also will be subject to the
satisfaction, on or before the __________ day of the month following
the end of such Collection Period (or if such __________ day is not a
Business Day, then on the next succeeding Business Day), of the
following conditions subsequent:
(i) the Seller shall have delivered to the
Trustee and the Rating Agencies a statement listing the
aggregate Principal Balance of the Subsequent Standard
Receivables so transferred to the Trustee and the Subsequent
Fixed Value Receivables transferred to the Agent during the
related Collection Period, and any other information
reasonably requested by any of the foregoing with respect to
such Subsequent Standard Receivables and Subsequent Fixed
Value Receivables;
(ii) each of the Rating Agencies shall have
notified the Seller in writing that, following the transfer of
all such Subsequent Standard Receivables to the Trustee and
Subsequent Fixed Value Receivables to the Agent, as
applicable, during the related Collection Period, the (Class
A) Certificates continue to be rated in the highest investment
rating category by each such Rating Agency;
(iii) the Seller shall have delivered (A) to the
Rating Agencies an Opinion of Counsel with respect to the
transfer of such Subsequent Standard Receivables and
8
<PAGE> 11
Subsequent Fixed Value Receivables substantially in the form
of the Opinion of Counsel delivered to the Rating Agencies on
the Closing Date and (B) to the Trustee the Opinion of Counsel
required by Section 21.02(i)(1);
(iv) the Seller shall have delivered to the
Trustee a letter of a firm of independent certified public
accountants confirming that the conditions set forth in
Section 3.02(c)(1)(vi) were satisfied with respect to those
Subsequent Standard Receivables conveyed to the Trustee and
the Subsequent Fixed Value Receivables conveyed to the Agent
on each Subsequent Transfer Date during the related Collection
Period, covering substantially the same matters with respect
to such Subsequent Receivables as are set forth on Exhibit D
to the Standard Terms and Conditions of Agreement, and, if any
of such Subsequent Receivables are OMSC Receivables, setting
forth the aggregate Principal Balance thereof; and
(v) the Seller shall have delivered to the
Trustee an Officers' Certificate confirming the satisfaction
of each condition specified in this paragraph (b)(2).
The Seller covenants that in the event any of the foregoing conditions
subsequent are not satisfied with respect to any Subsequent Standard Receivable
on the date required as specified above, the Seller will immediately repurchase
such Subsequent Standard Receivable from the Trustee, at a price equal to the
Purchase Amount thereof, in the manner specified in Section 14.05.
(c) The Seller covenants to transfer Subsequent Standard
Receivables to the Trustee pursuant to paragraph (a) above and/or Subsequent
Fixed Value Receivables to the Agent pursuant to the Agency Agreement with an
aggregate Principal Balance equal to $__________. In the event that the Seller
shall fail to deliver and sell to the Trustee and/or the Agent any or all of
such Subsequent Receivables by the date on which the Funding Period ends and
the Pre-Funded Amount is greater than $__________ on such date, the Seller
shall be obligated to deposit an amount equal to the Prepayment Premium into
the Certificate Distribution Account on the Distribution Date on which the
Funding Period ends (or, if the Funding Period does not end on a Distribution
Date, on the first Distribution Date following the end of the Funding Period);
provided, however, that the foregoing shall be the sole remedy of the Trustee,
the Agent or the Certificateholders with respect to a failure of the Seller to
comply with such covenant.
SECTION 3.03. Conveyance of Fixed Value Receivables to Agent. The
Seller hereby confirms that the Seller, on the date hereof, has sold,
transferred, assigned and otherwise conveyed and, during the
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<PAGE> 12
Funding Period (subject to the conditions set forth in Section 3.02 of the
Agency Agreement), will sell, transfer, assign and otherwise convey, to the
Agent for the benefit of the Trust and the Seller, without recourse, all right,
title and interest of the Seller in and to:
(1) the Initial Fixed Value Receivables and the
Subsequent Fixed Value Receivables, as applicable, and all moneys due
thereon on or after the related Cutoff Date, in the case of Precomputed
Receivables, and all moneys received thereon on and after the related
Cutoff Date, in the case of Simple Interest Receivables;
(2) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Initial Fixed Value Receivables and
the Subsequent Fixed Value Receivables and any other interest of the
Seller in such Financed Vehicles;
(3) any proceeds with respect to the Initial Fixed Value
Receivables and the Subsequent Fixed Value Receivables from claims on
any physical damage, credit life or disability insurance policies
covering the related Financed Vehicles or Obligors;
(4) any proceeds from recourse to Dealers on Initial
Fixed Value Receivables with respect to which the Servicer has
determined in accordance with its customary servicing procedures that
eventual payment in full is unlikely; and
(5) the proceeds of any and all of the foregoing.
ARTICLE IV
Incorporation of Standard Terms and Conditions
SECTION 4.01. Incorporation of Standard terms and Conditions of
Agreement. This Pooling and Servicing Agreement does hereby incorporate by
reference the Standards Terms and Conditions of Agreement for Premier Auto
Grantor Trusts dated as of ______________________ (the "Standard Terms and
Conditions of Agreement"), in the form attached hereto.
ARTICLE V
Additional Representations and Warranties of the Seller
SECTION 5.01. Additional Representations and Warranties of the
Seller. The Seller makes the following representations and warranties on which
the Trustee relies in accepting the Standard Receivables in trust and executing
and authenticating the
10
<PAGE> 13
Certificates. Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date, in the case of the
Initial Receivables, and as of the applicable Subsequent Transfer Date, in the
case of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Initial Standard Receivables and the Subsequent Standard
Receivables to the Trustee.
(i) Maturity of Receivables. Each Standard Receivable
and Fixed Value Receivable has a final maturity date not later than
______________; the weighted average remaining term of the Initial
Receivables is ___________ months as of the Initial Cutoff Date.
(ii) Financing. Approximately _____% of the aggregate
principal balance of the Initial Receivables, constituting _____% of
the number of Initial Receivables as of the Initial Cutoff Date,
represent vehicles financed at new vehicle rates; the remainder of the
Initial Receivables represent financing of used vehicles; approximately
_____% of the aggregate principal balance of the Initial Receivables
represent financing of vehicles manufactured or distributed by Chrysler
Corporation; approximately _____% of the aggregate principal balance of
the Initial Receivables as of the Initial Cutoff Date represent
Precomputed Receivables and the remainder of the Initial Receivables
represent Simple Interest Receivables; and _____% of the aggregate
principal balance of the Initial Receivables as of the Initial Cutoff
Date consists of Fixed Value Receivables. The aggregate Principal
Balance of the Initial Receivables, as of the Initial Cutoff Date, is
$__________.
ARTICLE VI
Additional Provisions Relating to Servicer
SECTION 6.01. Chrysler Credit Corporation Not to Resign as Servicer.
Subject to the provisions of Section 17.03 of the Standard Terms and Conditions
of Agreement, Chrysler Credit Corporation shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of Chrysler Credit Corporation shall be communicated
to the Trustee at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable time)
and any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee concurrently with or promptly after such
notice. No such resignation shall become effective until the Trustee or a
successor Servicer shall
11
<PAGE> 14
have assumed the responsibilities and obligations of Chrysler Credit
Corporation in accordance with Section 18.02 of the Standard Terms and
Conditions of Agreement.
SECTION 6.02. Additional Covenant of the Servicer. If the Servicer
takes any action pursuant to Section 13.02 of the Standard Terms and Conditions
of Agreement that impairs the rights of the Certificateholders in any
Receivable, the Servicer shall purchase such Receivable pursuant to Section
13.07 of the Standard Terms and Conditions of Agreement.
12
<PAGE> 15
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION
By:_________________________________
Name:
Title:
CHRYSLER CREDIT CORPORATION
By:_________________________________
Name:
Title:
(____________________________),
as Trustee
By:_________________________________
Name:
Title:
13
<PAGE> 16
Schedule A
Schedule of Receivables
(To be delivered to the Trustee at Closing and supplemented on each Subsequent
Transfer Date on which Subsequent Standard Receivables are transferred to the
Trust)
1
<PAGE> 17
Schedule B
Location of Receivable Files
Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034-8288
<PAGE> 18
Schedule C
Schedule of Eligible Investment Receivables
(To be delivered on each Subsequent Transfer Date on which Eligible Investment
Receivables are delivered to the Trust)
<PAGE> 19
==================================================================
FORM OF STANDARD TERMS AND CONDITIONS OF AGREEMENT
OF
PREMIER AUTO TRUSTS
CHRYSLER FINANCIAL CORPORATION
Seller
and
CHRYSLER CREDIT CORPORATION
Servicer
Dated as of __________________________
==================================================================
<PAGE> 20
TABLE OF CONTENTS
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ARTICLES I - X
Reserved
ARTICLE XI
Definitions
SECTION 11.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 11.02. Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XII
The Receivables
SECTION 12.01. Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12.02. Purchase of Eligible Investment Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 12.03. Repurchase Upon Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 12.04. Custody of Receivable Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 12.05. Duties of Servicer as Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 12.06. Instructions; Authority to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 12.07. Custodian's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 12.08. Effective Period and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XIII
Administration and Servicing of Receivables
SECTION 13.01. Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 13.02. Collection and Allocation of Receivable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 13.03. Realization Upon Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 13.04. Physical Damage Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 13.05. Maintenance of Security Interests in Financed Vehicles . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 13.06. Covenants of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 13.07. Purchase of Receivables Upon Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 13.08. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 13.09. Servicer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.10. Annual Statement as to Compliance; Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.11. Annual Independent Certified Public Accountant's Report . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.12. Access to Certain Documentation and
Information Regarding Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 13.13. Servicer Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 13.14. Appointment of Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XIV
Distributions; Reserve Account; Statements to Certificateholders
SECTION 14.01. Establishment of Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 14.02. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 14.03. Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 14.04. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 14.05. Additional Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 14.06. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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SECTION 14.07. Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 14.08. Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 14.09. Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 14.10. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 14.11. Net Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 14.12. Transfer of the Class B Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XV
The Certificates
SECTION 15.01. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 15.02. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 15.03. Registration of Transfer and Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 15.04. Limitations on Transfer of the Class B Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 15.05. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.06. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.07. Access to List of Certificateholders' Names and Addresses . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 15.09. Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 15.10. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 15.11. Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 15.12. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XVI
The Seller
SECTION 16.01. Representations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 16.02. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 16.03. Liabilities of Seller; Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 16.04. Merger or Consolidation of, or Assumption
of the Obligations of, Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 16.05. Limitation on Liability of Seller and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 16.06. Seller May Own Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 16.07. No Transfer of Excess Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XVII
The Servicer
SECTION 17.01. Representations of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 17.02. Indemnities of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 17.03. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 17.04. Limitation on Liability of Servicer and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XVIII
Default
SECTION 18.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 18.02. Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 18.03. Repayment of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 18.04. Notification to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
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SECTION 18.05. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XIX
The Trustee
SECTION 19.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 19.02. Certain Matters Affecting Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 19.03. Trustee Not Liable for Certificates or Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 19.04. Trustee May Own Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 19.05. Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 19.06. Eligibility Requirements for Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 19.07. Resignation or Removal of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 19.08. Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 19.09. Merger or Consolidation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 19.10. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 19.11. Representations and Warranties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 19.12. No Bankruptcy Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 19.13. Trustee's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 19.14. Trustee's Assignment of Repurchased Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XX
Termination
SECTION 20.01. Termination of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 20.02. Optional Purchase of All Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XXI
Miscellaneous Provisions
SECTION 21.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 21.02. Protection of Title to Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 21.03. Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 21.04. Limitation on Rights of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 21.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 21.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 21.07. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 21.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 21.09. Certificates Nonassessable and Fully Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 21.10. Limitations on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 21.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 21.12. Nonpetition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C Form of Depository Agreement
Exhibit D Form of Accountants' Letter
Exhibit E Form of Servicer's Certificate
Exhibit F Form of Transferor Certificate
Exhibit G Form of Investment Letter
Exhibit H Form of Rule 144A Letter
Exhibit J Form of Subsequent Transfer Assignment
Exhibit K Form of Eligible Investment Transfer Assignment
(iii)
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Exhibit L Form of Agency Agreement
Exhibit M-1 Form of Trustee's Certificate - Assignment to Seller
Exhibit M-2 Form of Trustee's Certificate - Assignment to Servicer
<PAGE> 24
PREMIER AUTO TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
Dated as of_______________
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be applicable
to Premier Auto Trust grantor trusts formed on or after the date hereof with
respect to which a Pooling and Servicing Agreement incorporating by reference
these Standard Terms and Conditions of Agreement shall have been executed.
ARTICLES I-X
Reserved
ARTICLE XI
Definitions
SECTION 11.01 Definitions. Whenever used in the Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Additional Amount" means the aggregate of all amounts required to be
deposited to the Reserve Account in connection with any conveyance of
Subsequent Standard Receivables to the Trustee pursuant to the Agreement or of
Subsequent Fixed Value Receivables to the Agent pursuant to the related Agency
Agreement.
"Advance" means either a Precomputed Advance or a Simple Interest
Advance or both, as applicable.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Agreement" shall have the meaning set forth in the Agreement.
"Agent" shall have the meaning set forth in the Agreement.
"Agreement" means a pooling and servicing agreement among CFC, as
seller, CCC, as servicer, and the Trustee named in such
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agreement, into which these Standard Terms and Conditions of Agreement shall be
incorporated by reference, and all amendments and supplements thereto.
"Amortizing Payment" means with respect to each Fixed Value Receivable
or Eligible Investment Fixed Value Receivable, as applicable, and each
Collection Period prior to the date on which the Fixed Value Payment is due,
the amount specified on the applicable Contract prepayment schedule as the
"Amount of Each Payment," except that in the case of a prepayment, liquidation
or repurchase by the Servicer, the Amortizing Payment shall be equal to the
aggregate "Amount of Each Payment" that has not yet been paid for the period
through and including the last payment prior to the date when the Fixed Value
Payment is due less the amount of the unearned finance charges under the
related Contract allocable to such amount in accordance with the Servicer's
customary procedures.
"Amount Financed" means (a) with respect to a Standard Receivable or
Eligible Investment Standard Receivable, as applicable, the amount advanced
under such Standard Receivable or Eligible Investment Standard Receivable
toward the purchase price of the Financed Vehicle and any related costs,
exclusive of any amount allocable to the premium of force-placed physical
damage insurance covering the Financed Vehicle; and (b) with respect to a Fixed
Value Receivable or Eligible Investment Fixed Value Receivable, as applicable,
an amount equal to the present value of the fixed level payment monthly
installments (not including the amount designated as the Fixed Value Payment)
thereunder, assuming that each payment is made on the due date in the month in
which such payment is due, discounted at the APR for such Fixed Value
Receivable or Eligible Investment Fixed Value Receivable, as applicable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.
"Benefit Plan" has the meaning set forth in Section 15.04(b).
"Book-Entry Certificates" means, unless otherwise specified in the
Agreement, a beneficial interest in the Class A or Class B Certificates,
ownership and transfers of which shall be registered through book entries by a
Clearing Agency as described in Section 15.09.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to be closed.
"CCC" means Chrysler Credit Corporation, a Delaware corporation, or
its successors.
"Certificate Balance" means, as of any date, the aggregate outstanding
principal amount of the Certificates at such date.
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"Certificate Owner" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar appointed pursuant to Section 15.03.
"Certificateholder" or "Holder" means a Person in whose name a
Certificate is registered in the Certificate Register.
"Certificates" shall have the meaning set forth in the Agreement.
"CFC" means Chrysler Financial Corporation, a Michigan corporation,
or its successors.
"Class A Certificate Balance" means, as of any date of determination,
the Initial Class A Certificate Balance, as specified in the Agreement, reduced
by all amounts previously distributed to Holders of Class A Certificates and
allocable to principal.
"Class A Distributable Amount" means, with respect to any Distribution
Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount for such date.
"Class A Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Class A Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall on such preceding Distribution Date, over
the amount in respect of interest that Holders of the Class A Certificates
actually received on such preceding Distribution Date, plus 30 days' interest
on such excess, to the extent permitted by law, at the Class A Pass-Through
Rate.
"Class A Interest Distributable Amount" means, with respect to any
Distribution Date, 30 days of interest at the Class A Pass-Through Rate on the
Class A Certificate Balance on the last day of the preceding Collection Period.
"Class A Pass-Through Rate" shall have the meaning specified in the
Agreement.
"Class A Percentage" shall have the meaning specified in the Agreement.
"Class A Pool Factor" means, as of the close of business on the last
day of any Collection Period, a seven-digit decimal figure
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equal to the Class A Certificate Balance as of such Record Date divided by the
Initial Class A Certificate Balance.
"Class A Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class A Monthly Principal Distributable
Amount and any outstanding Class A Principal Carryover Shortfall from the
preceding Distribution Date, over the amount in respect of principal that is
actually distributed to Holders of the Class A Certificates on such current
Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
Distribution Date, the Class A Percentage of the Principal Distribution Amount.
In addition, on the Final Scheduled Distribution Date, the principal required
to be included in the Class A Principal Distributable Amount will include the
lesser of (a) the Class A Percentage of (i) any Scheduled Payments of principal
due and remaining unpaid on each Precomputed Receivable and (ii) any principal
due and remaining unpaid on each Simple Interest Receivable, in each case, in
the Trust as of the Final Scheduled Maturity Date or (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Class A Certificate Balance to zero.
"Class B Certificate Balance" means, as of any date of determination,
the Initial Class B Certificate Balance, as specified in the Agreement, reduced
by all amounts previously distributed to Holders of Class B Certificates (or
deposited in the Reserve Account, exclusive of the Reserve Account Initial
Deposit) and allocable to principal and by Realized Losses to the extent of the
amount of such Realized Loses paid from the Class B Percentage of the Principal
Distribution Amount.
"Class B Distributable Amount" means, with respect to any Distribution
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"Class B Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Class B Interest Distributable
Amount for the preceding Distribution Date and any outstanding Class B Interest
Carryover Shortfall on such preceding Distribution Date, over the amount in
respect of interest that Holders of the Class B Certificates actually received
on such preceding Distribution Date, plus 30 days' interest on such excess, to
the extent permitted by law, at the Class B Pass-Through Rate.
"Class B Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class B Monthly Interest Distributable Amount
for such Distribution Date and the Class B Interest Carryover Shortfall for
such Distribution Date. Unless otherwise specified in the Agreement, interest
with respect to the Class B Certificates shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
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"Class B Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, 30 days of interest at the Class B Pass-Through Rate on
the Class B Certificate Balance on the last day of the preceding Collection
Period.
"Class B Pass-Through Rate" shall have the meaning specified in the
Agreement.
"Class B Percentage shall have the meaning specified in the Agreement.
"Class B Pool Factor" means, as of the close of business on the last
day of any Collection Period, a seven-digit decimal figure equal to the Class B
Certificate Balance as of such Record Date divided by the Initial Class B
Certificate Balance.
"Class B Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class B Monthly Principal Distributable
Amount and any outstanding Class B Principal Carryover Shortfall from the
preceding Distribution Date, over the amount in respect of principal that is
actually distributed to Holders of the Class B Certificates on such current
Distribution Date.
"Class B Principal Distributable Amount" means, with respect to any
Distribution Date, the Class B Percentage of the Principal Distribution Amount.
In addition, on the Final Scheduled Distribution Date, the principal required
to be included in the Class B Principal Distributable Amount will include the
lesser of (a) the Class B Percentage of (i) any Scheduled Payments of principal
due and remaining unpaid on each Precomputed Receivable and (ii) any principal
due and remaining unpaid on each Simple Interest Receivable, in each case, in
the Trust as of the Final Scheduled Maturity Date or (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Class B Certificate Balance to zero.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" with respect to each Trust shall have the meaning set
forth in the applicable Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 14.01(a).
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"Collection Period" means a calendar month (or in the case of the
first Distribution Date, the period from and including the Initial Cutoff Date
to and including the last day of the calendar month in which the Closing Date
occurs). Any amount stated as of the last day of a Collection Period or as of
the first day of a Collection Period shall give effect to the following
calculations as determined as of the close of business on such last day: (1)
all applications of collections, (2) all current and previous Payaheads, (3)
all applications of Payahead Balances, (4) all Advances and reductions of
Advances and (5) all distributions to be made on the following Distribution
Date.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Trustee at
the address set forth in the related Agreement or at such other address as the
Trustee may designate from time to time by notice to Certificateholders, the
Seller and the Servicer, or the principal corporate trust office of any
successor Trustee (of which address such successor Trustee shall notify the
Certificateholders, the Seller and Servicer).
"Cutoff Date" means, with respect to any Receivable or Eligible
Investment Receivable, as applicable, the date as of which collections on such
Receivable or Eligible Investment Receivable will be included in a Trust or the
related Trust Account pursuant to the related Agreement.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to CCC under an existing
agreement between such dealer and CCC.
"Definitive Certificates" shall have the meaning specified in Section
15.11.
"Delivery" when means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its
nominee or custodian by physical delivery to the Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Trustee or its nominee
or custodian or endorsed in blank, and, with respect to a certificated security
(as defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in blank to a financial
intermediary (as defined in Section 8-313 of the UCC) and the making by such
financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or custodian
and the sending by such financial intermediary of a confirmation of
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the purchase of such certificated security by the Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as defined
in Section 8-102(3) of the UCC) and the making by such clearing corporation of
appropriate entries on its books reducing the appropriate securities account of
the transferor and increasing the appropriate securities account of a financial
intermediary by the amount of such certificated security, the identification by
the clearing corporation of the certificated securities for the sole and
exclusive account of the financial intermediary, the maintenance of such
certificated securities by such clearing corporation or a "custodian bank" (as
defined in Section 8-102(4) of the UCC) or the nominee of either, subject to
the clearing corporation's exclusive control, the sending of a confirmation by
the financial intermediary of the purchase by the Trustee or its nominee or
custodian of such securities and the making by such financial intermediary of
entries on its books and records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter
become appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations, the following procedures,
all in accordance with applicable law, including applicable federal regulations
and Articles 8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal Reserve
Bank by a financial intermediary that is also a "depository" pursuant to
applicable federal regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry registration to
the Trustee or its nominee or custodian of the purchase by the Trustee or its
nominee or custodian of such book-entry securities; the making by such
financial intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to federal
book-entry regulations as belonging to the Trustee or its nominee or custodian
and indicating that such custodian holds such Trust Account Property solely as
agent for the Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Trust Account Property to the Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is
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not governed by clause (b) above, registration on the books and records of the
issuer thereof in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the Trustee or
its nominee or custodian of such uncertificated security, the making by such
financial intermediary of entries on its books and records identifying such
uncertificated certificates as belonging to the Trustee or its nominee or
custodian.
"Determination Date" means, unless otherwise specified in the
Agreement, the ______ Business Day of each calendar month.
"Distribution Account" means the account designated as such,
established and maintained pursuant to Section 14.01(a).
"Distribution Date" with respect to each Trust shall have the meaning
set forth in the applicable Agreement.
"Duff & Phelps" means Duff & Phelps Credit Rating Company, or its
successor.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Colombia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit rating
from each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Trustee or any other entity specified in the Agreement or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of
AAA or better by Standard & Poor's and A1 or better by Moody's or (B) a
certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better by
Moody's or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies and (ii) whose deposits are insured by the
FDIC. If so qualified, the Trustee or any such other entity specified in the
Agreement may be considered an Eligible Institution for the purposes of clause
(b) of this definition.
"Eligible Investment Fixed Value Receivable" means any Contract listed
on Schedule C to an Agreement (which Schedule may be in the form of
microfiche), as such Schedule shall be supplemented to reflect the transfer of
Eligible Investment Receivables to the related Trustee, as collateral agent in
respect of the Reserve Account, on Subsequent Transfer Dates, which
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Contract provides for amortization of the loan over a series of fixed level
payment monthly installments in accordance with the actuarial method, the
simple interest method or the Rule of 78s, but also requires a final payment
that is greater than the scheduled monthly payments and is due after payment of
such scheduled monthly payments and that may be made by (i) payment in full in
cash of a fixed value amount, (ii) return of the Financed Vehicle to the
Servicer provided certain conditions are satisfied or (iii) refinancing the
final fixed value payment in accordance with certain conditions.
"Eligible Investment Receivable" means (i) any Eligible Investment
Standard Receivable and (ii) the Amortizing Payments with respect to any
Eligible Investment Fixed Value Receivable.
"Eligible Investment Standard Receivable" means any Contract that is
not an Eligible Investment Fixed Value Receivable, which Contract is listed on
Schedule C to an Agreement (which Schedule may be in the form of microfiche),
as such Schedule shall be supplemented to reflect the transfer of Eligible
Investment Receivables to the related Trustee, as collateral agent in respect
of the Reserve Account, on Subsequent Transfer Dates.
"Eligible Investment Transfer Assignment" means a written assignment
substantially in the form of Exhibit K.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (of any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than
such obligations the rating of which is based on the credit of a Person other
than such depository institution or trust company) thereof shall have a credit
rating from each of the Rating Agencies in the highest investment category
granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Trustee or any of its Affiliates is investment
manager or advisor);
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(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (b);
(g) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company (acting
as principal) described in clause (b) above (except that the rating referred to
in the provision in such clause (b) shall be A-1 or higher in the case of
Standard & Poor's)(such depository institution or trust company being referred
to in this definition as a "financial institution"), (ii) a broker/dealer
(acting as principal) registered as a broker or dealer under Section 15 of the
Exchange Act (a "broker/dealer") the unsecured short-term debt obligations of
which are rated P-1 by Moody's and at least A-1 by Standard & Poor's at the
time of entering into such repurchase obligation (a "rated broker/dealer"),
(iii) an unrated broker/dealer (an "unrated broker/dealer"), acting as
principal, that is a wholly-owned subsidiary of a non-bank holding company the
unsecured short-term debt obligations of which are rated P-1 by Moody's and at
least A-1 by Standard & Poor's at the time of entering into such repurchase
obligation (a "Rated Holding Company") or (iv) an unrated subsidiary (a
"Guaranteed Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company, that
guarantees such subsidiary's obligations under such repurchase agreement;
provided that the following conditions are satisfied:
(1) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of which
Standard & Poor's unsecured short- term ratings are A-1 (in the case
of an unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the Rated Holding Company) shall not exceed 20% of the
Certificate Balance (there being no limit on the amount of funds that
may be invested in repurchase obligations in respect of which such
Standard & Poor's rating is A-1+ (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being that of
the related Rated Holding Company));
(2) in the case of the Reserve Account and the Pre-Funding
Account, the rating from Standard & Poor's in respect of the unsecured
short-term debt obligations of the financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty (in
the case of an unrated broker/dealer or Guaranteed Counterparty, such
rating being that of the related Rated Holding Company) shall be A-1+;
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(3) the repurchase obligation must mature within 30 days of
the date on which the Trustee on behalf of the Trust, enters into such
repurchase obligation;
(4) the repurchase obligation shall not be subordinated to
any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(5) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of the
Trustee;
(6) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(7) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(A) the Trustee shall have received an opinion of
counsel (which may be in-house counsel) to the effect that the
guarantee of the related Rated Holding Company is a legal, valid
and binding agreement of the Rated Holding Company, enforceable
in accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium or other
similar laws affecting creditor's rights generally and to
general equitable principles;
(B) the Trustee shall have received (x) an incumbency
certificate for the signer of such guarantee, certified by an
officer of such Rated Holding Company, (y) a resolution,
certified by an officer of the Rated Holding Company and (z) a
resolution, certified by an officer of the Rated Holding
Company, of the board of directors (or applicable committee
thereof) of the Rated Holding Company authorizing the execution,
delivery and performance of such guarantee by the Rated Holding
Company;
(C) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall not
have paid under such repurchase obligation when required (it
being understood that not notice to, demand on or other action
in respect of the Guaranteed Counterparty is necessary) and that
Trustee or the Trust shall make a demand on the Rated Holding
Company to make the payment due under such guarantee;
(D) the guarantee of the Rated Holding Company shall
be irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
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(E) each of Standard & Poor's and Moody's has
confirmed in writing to the Trustee that it has reviewed the
form of the guarantee of the Rated Holding Company and has
determined that the issuance of such guarantee will not result
in the downgrade or withdrawal of the ratings assigned to the
Certificates.
(8) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide that,
upon any failure to maintain such overcollateralization, the
repurchase obligation shall become due and payable, and unless the
repurchase obligation is satisfied immediately, the collateral subject
to the repurchase agreement shall be liquidated and the proceeds
applied to satisfy the unsatisfied portion of the repurchase
obligation; and
(h) Eligible Investment Receivables; provided that Eligible
Investment Receivables shall be Eligible Investments only for funds in the
Reserve Account and only to the extent of the portion of the Specified Reserve
Account Balance specified in the Agreement in clause (ii) of the definition of
"Specified Reserve Account Balance"; and
(i) any other investment with respect to which the Trustee or the
Servicer has received written notification from the Rating Agencies that the
acquisition of such investment as an Eligible Investment will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means an event specified in Section 18.01.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the date specified in an
Agreement as the final scheduled distribution date with respect to the related
Certificates.
"Final Scheduled Maturity Date" means the final scheduled maturity
date specified in the Agreement in respect of the Receivables transferred to
the Trust under such Agreement or to the Agent under the related Agency
Agreement.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable, Fixed Value Receivable or Eligible Investment
Receivable, as the case may be.
"Fitch" means Fitch Investors Service, Inc., or its successor.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable or Eligible Investment Fixed Value Receivable, as
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applicable, the amount specified in the applicable Contract as the "amount of
fixed value payment" reduced (i) in the case of a prepayment or repurchase, by
the amount of the unearned finance charges under the Contract allocable to such
payment in accordance with the Servicer's customary procedures and (ii) in the
case of a liquidation, by the excess of Liquidation Proceeds collected by the
Servicer over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A to an
Agency Agreement (which Schedule may be in the form of a microfiche), as such
Schedule shall be supplemented to reflect the transfer of Subsequent Fixed
Value Receivables to the Agent on each Subsequent Transfer Date pursuant to
such Agency Agreement, which provides for amortization of the loan over a
series of fixed level payment monthly installments in accordance with the
actuarial method, the simple interest method or the Rule of 78s, but also
requires a final payment that is greater than the scheduled monthly payments
and such final payment is due after payment of such scheduled monthly payments
and may be made by (i) payment in full in cash of a fixed value amount, (ii)
return of the Financed Vehicle to the Servicer provided certain conditions are
satisfied or (iii) refinancing the final fixed value payment in accordance with
certain conditions.
"Funding Period" with respect to each Trust shall have the meaning set
forth in the applicable Agreement.
"Initial Cutoff Date" means the date or dates as of which Initial
Standard Receivables, if any, are conveyed to a Trust pursuant to the Agreement
or Initial Fixed Value Receivables, if any, are conveyed to the Agent under the
related Agency Agreement.
"Initial Fixed Value Receivable" means any Initial Receivable that is
a Fixed Value Receivable.
"Initial Receivables" means the Standard Receivables, if any, conveyed
to the Trustee on the Closing Date under, and listed on Schedule A to, the
Agreement and the Fixed Value Receivables, if any, conveyed to the Agent on the
Closing Date under, and listed on Schedule A to, the related Agency Agreement.
"Initial Standard Receivable" means any Initial Receivable that is a
Standard Receivable.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation or such Person's affairs, and such
decree or order shall remain unstayed
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and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part
of its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts in respect of the Receivables (i.e., not
Eligible Investment Receivables) and the preceding Collection Period: (i) that
portion of all collections on Receivables (including Payaheads) allocable to
interest, (ii) Liquidation Proceeds with respect to the Receivables to the
extent allocable to interest due thereon in accordance with the Servicer's
customary servicing procedures; (iii) all Advances made by the Servicer of
interest due on Receivables, (iv) the Purchase Amount of each Receivable that
became a Purchased Receivable during the related Collection Period to the
extent attributable to accrued interest on such Receivable (v) Recoveries for
such Collection Period, and (vi) Investment Earnings for such Collection
Period; provided, however, that in calculating the Interest Distribution Amount
the following will be excluded: (i) amounts received on Precomputed Receivables
to the extent that the Servicer has previously made an unreimbursed Precomputed
Advance of interest; (ii) Liquidation Proceeds with respect to a particular
Precomputed Receivable to the extent of any unreimbursed Precomputed Advances
of interest; (iii) all payments and proceeds (including Liquidation Proceeds)
of any Purchased Receivables the Purchase Amount of which has been included in
the Interest Distribution Amount in a prior Collection Period; (v) the sum for
all Simple Interest Receivables of collections on each such Simple Interest
Receivable received during the preceding Collection Period in excess of the
amount of interest that would be due on the aggregate Principal Balance of the
Simple Interest Receivables during such Collection Period at their respective
APRs if a payment were received on each Simple Interest Receivable during such
Collection Period on the date payment is due under the terms of the related
Contract; (vi) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to the
extent of any unreimbursed Simple Interest Advances; and (vii) amounts released
from the Pre-Funding Account.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be
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deposited to the Distribution Account on such Distribution Date pursuant to
Section 14.01(b).
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, liquidated by the Servicer through sale of a
Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to a Liquidated Receivable,
the monies collected in respect thereof, from whatever source, during the
Collection Period in which such Receivable or Eligible Investment Receivable,
as applicable, became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer in connection with such liquidation, plus any amounts
required by law to be remitted to the Obligor.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by the (a) chairman
of the board, the president, any executive vice president or any vice president
and (b) any treasurer, assistant treasurer, secretary or assistant secretary
of the Seller or the Servicer, as appropriate.
"OMSC" means Overseas Military Sales Corporation, or its successor.
"OMSC Receivable" means any Standard Receivable acquired by CCC from
OMSC.
"Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Seller or the Servicer, which
counsel shall be acceptable to the Trustee or Rating Agencies, as applicable.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Cutoff Dates.
"Outstanding Precomputed Advances" on the Precomputed Receivables
means the sum, as of the close of business on the last day of a Collection
Period, of all Precomputed Advances, reduced as provided by Section 14.04(a).
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"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances, reduced as provided in
Section 14.04(b).
"Payahead" on a Receivable that is a Precomputed Receivable means the
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 14.03 with respect to such Receivable.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 14.01(c).
"Payahead Balance" on a Precomputed Receivable means the sum, as of
the close of business on the last day of a Collection Period, of all Payaheads
made by or on behalf of the Obligor with respect to such Precomputed
Receivable, as reduced by applications of previous Payaheads with respect to
such Precomputed Receivable, pursuant to Sections 14.03 and 14.04.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such date (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of business on
the last day of a Collection Period, which the Servicer is required to advance
on any Precomputed Receivable pursuant to Section 14.04(a).
"Precomputed Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, under which the portion of each payment allocable to
earned interest (which may be referred to in the Receivable as an add-on
finance charge) and the portion allocable to the Amount Financed are determined
according to the sum of periodic balances or the sum of monthly balances or any
equivalent method, or which is a monthly actuarial receivable.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account. The amount, if any, to be
deposited initially to the Pre-Funding Account will be specified in the
Agreement.
"Pre-Funded Percentage" means, with respect to the Class A
Certificates and the Class B Certificates, the quotient (expressed as a
percentage) of (i) the initial Class A Certificate Balance or
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Class B Certificate Balance, as the case may be, and (ii) the Initial
Certificate Balance.
"Pre-Funding Account" means the Trust Account designated as such,
established pursuant to Section 14.01(a).
"Prepayment Premium" means the Class A Prepayment Premium or the Class
B Prepayment Premium, or both, as specified in the Agreement.
"Principal Balance" means the Amount Financed minus the sum, as of the
close of business on the last day of a Collection Period, of (a) with respect
to a Precomputed Receivable (i) that portion of all Scheduled Payments due on
or prior to such day allocable to principal using the actuarial or constant
yield method, (ii) any refunded portion of extended warranty protection plan
costs or of physical damage, credit life or disability insurance premiums
included in the Amount Financed, (iii) any payment of the Purchase Amount
allocable to principal and (iv) any prepayment in full or any partial
prepayments applied to reduce the Principal Balance and (b) with respect to a
Simple Interest Receivable (i) the portion of all payments made by or on behalf
of the related Obligor on or prior to such day and allocable to principal using
the Simple Interest Method and (ii) any payment of the Purchase Amount
allocable to principal.
"Principal Distribution Amount" means, for any Distribution Date, the
sum of the following amounts with respect to the preceding Collection Period:
(i) that portion of all collections on Receivables (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into the Payahead
Account) allocable to principal; (ii) all Liquidation Proceeds attributable to
the principal amount of Receivables that became Liquidated Receivables during
the Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such Liquidated
Receivables; (iii) all Precomputed Advances made by the Servicer of principal
due on the Precomputed Receivables; (iv) to the extent attributable to
principal, the Purchase Amount received with respect to each Receivable that
became a Purchased Receivable during the related Collection Period; (v) partial
prepayments relating to refunds of extended warranty protection plan costs or
of physical damage, credit life or disability insurance policy premiums, but
only if such costs or premiums were financed by the respective Obligor as of
the date of the original Contract; and (vi) on the Final Scheduled Distribution
Date, any amounts advanced by the Servicer on such Final Scheduled Distribution
Date with respect to principal on the Receivables; 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
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(including Liquidation Proceeds) of any Purchased Receivables the Purchase
Amount of which has been included in the Principal Distribution Amount in a
prior Collection Period, (iv) Recoveries and (v) amounts released from the
Pre-Funding Account.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable or
Eligible Investment Receivable, as applicable, under the terms thereof
including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable or Eligible Investment
Receivable, as applicable, purchased as of the close of business on the last
day of a Collection Period by the Servicer pursuant to Section 13.07 or by the
Seller pursuant to Section 12.03.
"Rating Agency" means, unless otherwise specified in the Agreement,
Moody's and Standard & Poor's and, for purposes of Section 3.02(b) of the
Agreement only, Fitch and Duff & Phelps. If no such organization or successor
is any longer in existence, "Rating Agency" shall mean any nationally
recognized statistical rating organization or other comparable Person
designated by the Seller, notice of which designation shall be given to the
Trustee and the Servicer. Any notice required to be given to a Rating Agency
pursuant to this Agreement shall also be given to Fitch and Duff & Phelps,
although, except as set forth above, neither shall be deemed a Rating Agency
for any purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer and the Trustee in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Certificates.
"Realized Losses" means, with respect to any Receivable or Eligible
Investment Receivable, as applicable, that becomes a Liquidated Receivable, the
excess of the Principal Balance of such Liquidated Receivable over Liquidation
Proceeds to the extent allocable to principal.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable. An Eligible Investment
Receivable is not a Receivable.
"Receivable Files" means the documents specified in Section 12.04.
"Record Date" with respect to each Distribution Date means the first
day of the calendar month in which such Distribution Date occurs, unless
otherwise specified in the Agreement.
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"Recoveries" means, with respect to any Receivable or Eligible
Investment Receivable, as applicable, that becomes a Liquidated Receivable,
monies collected in respect thereof, from whatever source, during any
Collection Period following the Collection Period in which such Receivable or
Eligible Investment Receivable became a Liquidated Receivable, net of the sum
of any amounts expended by the Servicer for the account of the Obligor and any
amounts required by law to be remitted to the Obligor.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 14.07.
"Reserve Account Initial Deposit" with respect to a Reserve Account
and any Trust shall have the meaning set forth in the related Agreement.
"Reserve Account Property" has the meaning assigned thereto in Section
14.07(a)(ii).
"Scheduled Payment" on a Precomputed Receivable means that portion of
the payment required to be made by the Obligor during each Collection Period
sufficient to amortize the Principal Balance thereof under the actuarial method
over the term of the Receivable and to provide interest at the APR.
"Seller" means Chrysler Financial Corporation, a Michigan corporation,
and its successors in interest to the extent permitted hereunder.
"Servicer" means Chrysler Credit Corporation, a Delaware corporation,
as the servicer of the Receivables, and each successor Servicer pursuant to
Section 17.03 or 18.02.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 13.09, substantially in the form of
Exhibit E.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 13.08.
"Servicing Rate" means, unless otherwise specified in the Agreement,
1.00%
"Simple Interest Advance" means the amount of interest, as of the
close of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
14.04(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed
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since the preceding payment of interest was made and the remainder of such
payment is allocable to principal.
"Simple Interest Receivable" means any Receivable or Eligible
Investment Receivable, as applicable, under which the portion of a payment
allocable to interest and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means the amount of funds
generally required to be maintained in the Reserve Account, determined as
specified in the Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Group, or its
successor.
"Standard Receivable" means any Contract that is listed on Schedule A
to the Agreement (which schedule may be in the form of microfiche), as such
Schedule shall be supplemented to reflect the transfer of Subsequent Standard
Receivables, if any, to the Trustee pursuant to the Agreement.
"Subsequent Cutoff Date" means any date as of which particular
Subsequent Standard Receivables are conveyed to the Trustee pursuant to the
Agreement or particular Subsequent Fixed Value Receivables are conveyed to the
Agent pursuant to the related Agency Agreement.
"Subsequent Fixed Value Receivable" means any Subsequent Receivable
that is a Fixed Value Receivable.
"Subsequent Receivables" means the Standard Receivables transferred to
the Trustee pursuant to the Agreement and the Fixed Value Receivables
transferred to the Agent pursuant to the related Agency Agreement, which shall
be listed on Schedule A to the related Subsequent Transfer Assignment.
"Subsequent Standard Receivable" means any Subsequent Receivable that
is a Standard Receivable.
"Subsequent Transfer Assignment" means a written assignment
substantially in the form of Exhibit J.
"Subsequent Transfer Date" means, (i) with respect to Subsequent
Receivables, any date during the Funding Period on which Subsequent Standard
Receivables are to be transferred to the Trustee pursuant to the Agreement or
Subsequent Fixed Value Receivables are to be transferred to the Agent pursuant
to the Agency Agreement, and a Subsequent Transfer Assignment is executed and
delivered to the related Trustee or Agent, as applicable, and, (ii) with
respect to Eligible Investment Receivables, any date on which Eligible
Investment Receivables are to be transferred to the Trustee, as collateral
agent in respect of the Reserve Account, pursuant to the Agreement and an
Eligible Investment Transfer
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Assignment is executed and delivered to such Trustee as collateral agent.
"Total Distribution Amount" means, for each Distribution Date, the sum
of the Interest Distribution Amount and the Principal Distribution Amount
(other than the portion thereof attributable to Realized Losses).
"Trust" shall have the meaning set forth in the Agreement.
"Trustee" with respect to each Trust shall have the meaning assigned
thereto in the Agreement.
"Trustee Officer" means the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive committee of the
board of directors, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York on the date hereof.
SECTION 11.02. Other Definitional Provisions. (a) All terms
defined in this Standard Terms and Conditions of Agreement or any Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used herein, in any Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined herein or in such Agreement or in any such certificate or other
document, and accounting terms partly defined herein or in such Agreement or in
any such certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms herein, in
any related Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained herein, in such Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and word of similar
import when used herein shall refer to these Standard Terms and Conditions of
Agreement and the Agreement as a whole and not to any particular provision of
the Standard Terms and Conditions of Agreement or the Agreement; Article,
Section, Schedule and Exhibit
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references contained in the Standard Terms and Conditions of Agreement or any
Agreement are references to Articles, Sections, Schedules and Exhibits in or to
the Standard Terms and Conditions of Agreement and the Agreement, respectively;
and the term "including" shall mean "including without limitation".
(d) The definitions contained in these Standard Terms and Conditions
of Agreement and the Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and
assigns.
ARTICLE XII
The Receivables
SECTION 12.01. Representations and Warranties of Seller. The
Seller makes the following representations and warranties as to the Receivables
on which the Trustee shall be deemed to rely in accepting the Receivables in
trust and executing and authenticating the Certificates. Such representations
and warranties speak as of the execution and delivery of the Agreement and as
of the Closing Date, in the case of the Initial Receivables, if any, and as of
the applicable Subsequent Transfer Date, in the case of the Subsequent
Receivables, if any, but in each case shall survive the sale, transfer and
assignment of any Initial Receivables and Subsequent Receivables to the
Trustee.
(i) Characteristics of Receivables. Each Standard
Receivable and each Fixed Value Receivable (a) shall have been
originated in the United States of America (except for any OMSC
Receivables) by a Dealer for the retail sale of a Financed Vehicle in
the ordinary course of such Dealer's business, shall have been fully
and properly executed by the parties thereto, shall have been
purchased by the Seller from CCC, which, in turn, shall have purchased
such Standard Receivable or Fixed Value Receivable from such Dealer
under an existing dealer agreement with CCC, (b) shall have created or
shall create a valid, subsisting and enforceable first priority
security interest in favor of CCC in the Financed Vehicle, which
security interest has been assigned by CCC to the Seller, and shall be
assignable by the Seller, (c) shall contain customary and enforceable
provisions such that the rights and remedies of the holder thereof
shall be adequate
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for realization against the collateral of the benefits of the
security, (d) shall provide for level monthly payments (provided that
the payment in the first or last month in the life of the Standard
Receivable or Fixed Value Receivable may be minimally different from
the level payments and that the payment in the last month of a Fixed
Value Receivable may be a Fixed Value Payment) that fully amortize the
Amount Financed by maturity and yield interest at the Annual
Percentage Rate, and (v) in the case of a Precomputed Receivable, in
the event that such Contract is prepaid, shall provide for a
prepayment that fully pays the Principal Balance and includes a full
month's interest, in the month of prepayment, at the Annual Percentage
Rate. The Obligor on each OMSC Receivable was in the service of the
United States of America military at the time such OMSC Receivable was
originated.
(ii) Schedule of Receivables. The information set forth in
Schedule A to each Agreement (which shall include all information with
respect to the Standard Receivables and well as the Fixed Value
Receivables), (Schedule A to the Agency Agreement (with respect to the
Fixed Value Receivables) and Schedule A to any Subsequent Transfer
Assignment shall be true and correct in all material respects as of
the opening of business on the related Cutoff Date, and no selection
procedures believed to be adverse to the Certificateholders shall have
been utilized in selecting the Standard Receivables or the Fixed Value
Receivables. Each computer tape or other listing regarding the
Standard Receivables and Fixed Value Receivables made available to the
Trustee and the Agent shall be true and correct in all respects.
(iii) Compliance with Law. Each Standard Receivable and
Fixed Value Receivable and the sale of the Financed Vehicle shall
comply at the time of the execution of the Agreement in all material
respects with all requirements of applicable federal, state and local
laws and regulations thereunder (or, in the case of OMSC Receivables,
Swiss laws and regulations and the laws and regulations of the
jurisdiction where the Receivable was originated), including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B
and Z, the Texas Consumer Credit Code, and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and
other consumer credit laws and equal credit opportunity and disclosure
laws.
(iv) Binding Obligation. Each Standard Receivable and
Fixed Value Receivable shall represent the genuine, legal, valid and
binding payment obligation in writing of the Obligor, enforceable by
the holder thereof in accordance with its terms.
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(v) No Government Obligor. None of the Standard
Receivables or Fixed Value Receivables shall be due from the United
States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately
prior to the sale, assignment and transfer thereof, each Standard
Receivable and each Fixed Value Receivable shall be secured by a
validly perfected first security interest in the Financed Vehicle in
favor of the Seller as secured party or all necessary and appropriate
actions shall have been commenced that would result in the valid
perfection of a first security interest in the Financed Vehicle in
favor of the Seller as secured party.
(vii) Receivables in Force. No Standard Receivable or Fixed
Value Receivable shall have been satisfied, subordinated or rescinded,
nor shall any Financed Vehicle have been released from the lien
granted by the related Standard Receivable or Fixed Value Receivable
in whole or in part.
(viii) No Waiver. No provision of a Standard Receivable or
Fixed Value Receivable shall have been waived.
(ix) No Amendments. No Standard Receivable or Fixed Value
Receivable shall have been amended such that the amount of the
Obligor's Scheduled Payments shall have been increased except for
increases resulting from the inclusion of any premiums for forced
placed physical damage insurance covering the Financed Vehicle.
(x) No Defenses. No right of rescission, setoff,
counterclaim or defense shall have been asserted or threatened with
respect to any Standard Receivable or Fixed Value Receivable.
(xi) No Liens. To the best of the Seller's knowledge, no
liens or claims shall have been filed for work, labor or materials
relating to a Financed Vehicle that shall be liens prior to, or equal
or coordinate with, the security interest in the Financed Vehicle
granted by the Standard Receivable or Fixed Value Receivable.
(xii) No Default. No Standard Receivable or Fixed Value
Receivable has a payment that is more than 90 days overdue as of the
related Cutoff Date, and, except as permitted in this paragraph, no
default, breach, violation or event permitting acceleration under the
terms of any Standard Receivable or Fixed Value Receivable has
occurred; and no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable or Fixed Value
Receivable has arisen; and the
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Seller has not waived and shall not waive any of the foregoing.
(xiii) Insurance. The Seller, in accordance with its
customary procedures, shall have determined that the Obligor has
obtained physical damage insurance covering the Financed Vehicle and
under the terms of the Standard Receivable or Fixed Value Receivable
the Obligor is required to maintain such insurance.
(xiv) Title. (a) It is the intention of the Seller that
the transfer and assignment herein contemplated constitute a sale of
the Standard Receivables from the Seller to the Trust and that the
beneficial interest in and title to such Standard Receivables not be
part of the debtor's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law. No
Standard Receivable has been sold, transferred, assigned or pledged by
the Seller to any Person other than the Trustee. Immediately prior to
the transfer and assignment herein contemplated, the Seller had good
and marketable title to each Standard Receivable free and clear of all
Liens, encumbrances, security interests and rights of others and,
immediately upon the transfer thereof, the Trustee, for the benefit of
the Certificateholders, shall have good and marketable title to each
such Standard Receivable, free and clear of all Liens, encumbrances,
security interests and rights of others; and the transfer has been
perfected under the UCC.
(b) It is the intention of the Seller that the
transfer and assignment contemplated in the Agency Agreement
constitute a sale of the Fixed Value Receivables from the Seller to
the Agent and that the beneficial interest in and title to the Fixed
Value Receivables not be part of the debtor's estate (except to the
extent of its interest in the Fixed Value Payment) in the event of the
filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Fixed Value Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other
than the Agent for the benefit of the Trust and the Seller.
Immediately prior to the transfer and assignment herein contemplated,
the Seller had good and marketable title to each Fixed Value
Receivable free and clear of all Liens, encumbrances, security
interests and rights of others and, immediately upon the transfer
thereof, the Agent, for the benefit of the Trust and the Seller, shall
have good and marketable title to each such Fixed Value Receivable,
free and clear of all Liens, encumbrances, security interests and
rights of others; and the transfer has been perfected under the UCC.
(xv) Lawful Assignment. No Standard Receivable or Fixed
Value Receivable shall have been originated in, or shall be subject to
the laws of, any jurisdiction under which the sale,
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transfer and assignment of such Standard Receivable or Fixed Value
Receivable under the Agreement, the Agency Agreement or any Subsequent
Transfer Assignment, as the case may be, or pursuant to transfers of
the Certificates shall be unlawful, void or voidable.
(xvi) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Trustee a first perfected
ownership interest in the Standard Receivables and the Agent a first
perfected ownership interest in the Fixed Value Receivables shall have
been made.
(xvii) One Original. There shall be only one original
executed copy of each Standard Receivable and each Fixed Value
Receivable.
(xviii) Scheduled Payments. (a) Each Standard Receivable and
Fixed Value Receivable has a first Scheduled Payment due, in the case
of Precomputed Receivables, or a scheduled due date, in the case of
Simple Interest Receivables, on or prior to the end of the month
following the related Cutoff Date and (b) no Standard Receivable or
Fixed Value Receivable has a payment that is more than 90 days overdue
as of the related Cutoff Date, and has a final scheduled payment date
no later than the Final Scheduled Maturity Date.
(xix) Location of Receivable Files. The Receivable Files
are kept at one or more of the locations listed in Schedule B to the
Agreement.
(xx) Remaining Maturity. The latest scheduled maturity of
any Standard Receivable or Fixed Value Receivable shall be no later
than the Final Scheduled Maturity Date.
(xxi) Outstanding Principal Balance. Each Standard
Receivable and Fixed Value Receivable has an outstanding gross balance
of at least $1,000.
(xxii) No Bankruptcies or First-Time Buyers. No Obligor on
any Standard Receivable or Fixed Value Receivable as of the related
Subsequent Cutoff Date was noted in the related Receivable File as
having filed for bankruptcy, and no such Obligor financed a Financed
Vehicle under CCC's "New Finance Buyer Plan" program.
(xxiii) No Repossessions. No Financed Vehicle securing any
Standard Receivable or Fixed Value Receivable is in repossession
status.
(xxiv) Chattel Paper. Each Standard Receivable and each Fixed
Value Receivable constitutes "chattel paper" under the UCC.
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(xxv) Agreement. The representations and warranties
contained herein and in the Agreement shall be true and correct.
(xxvi) Remaining Maturity. The latest scheduled maturity of
any Standard Receivable or Fixed Value Receivable shall be no later
than the Final Scheduled Maturity Date.
SECTION 12.02. Purchase of Eligible Investment Receivables. (a)
Pursuant to Section 14.07(d), the Trustee, as collateral agent, may invest
funds in the Reserve Account in Eligible Investment Receivables, but only up to
the portion of the Specified Reserve Account Balance, if any, specified in the
definition "Specified Reserve Account Balance" contained in the Agreement.
Eligible Investment Receivables shall be part of the Reserve Account and shall
not be Receivables hereunder and, except for Investment Earnings in respect of
the Eligible Investment Receivables (which Investment Earnings shall be
distributed to the Seller pursuant to Section 14.07(d)), collections on and
Purchase Amounts in respect of Eligible Investment Receivables shall be applied
as part of the Reserve Account pursuant to Section 14.07 and shall not be part
of the Total Distribution Amount. Upon delivery by the Trustee, as collateral
agent, to the Seller of an amount equal to the aggregate Principal Balance of
the Eligible Investment Receivables then being purchased by the Trustee as
collateral agent, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Trustee, as collateral agent, without recourse (subject
to the obligations set forth herein), all right, title and interest of the
Seller in and to:
(i) the Eligible Investment Receivables listed on Schedule
A to the related Eligible Investment Transfer Assignment, and all
monies due thereon, on or after the related Cutoff Date, in the case
of Precomputed Receivables, and all monies received thereon, on and
after the related Cutoff Date, in the case of Simple Interest
Receivables;
(ii) the security interests in the Financed Vehicles granted
by Obligors pursuant to such Eligible Investment Receivables and any
other interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Eligible Investment
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(iv) any proceeds from recourse to Dealers with respect to
Eligible Investment Receivables in respect of which the Servicer has
determined in accordance with its customary servicing procedures that
eventual payment in full is unlikely;
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(v) any Financed Vehicle that shall have secured any such
Eligible Investment Receivable and shall have been acquired by
or on behalf of the Seller, the Servicer or the Trustee; and
(vi) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Trustee, as collateral agent,
the Eligible Investment Receivables and the other property and rights related
thereto described in paragraph (a) above only upon the satisfaction of each of
the following conditions precedent on or prior to the related Subsequent
Transfer Date:
(i) the Seller shall have delivered to the Trustee, as
collateral agent, a duly executed Eligible Investment Transfer
Assignment substantially in the form of Exhibit K, which shall include
supplements to Schedule C listing the Eligible Investment Receivables;
(ii) the Seller shall, to the extent required by Section
14.02, have deposited in the Reserve Account all amounts (A) due on or
after the applicable Cutoff Date in respect of such Eligible
Investment Receivables that are Precomputed Receivables or (B)
received on or after the applicable Cutoff Date in respect of such
Eligible Investment Receivables that are Simple Interest Receivables;
(iii) as of each related Subsequent Transfer Date, (A) the
Seller shall not be insolvent and shall not become insolvent as a
result of the transfer of Eligible Investment Receivables on such
Subsequent Transfer Date, (B) the Seller shall not intend to incur or
believe that it shall incur debts that would be beyond its ability to
pay as such debts mature, (C) such transfer shall not be made with
actual intent to hinder, delay or defraud any Person and (D) the
assets of the Seller shall not constitute unreasonably small capital
to carry out its business as conducted;
(iv) each of the representations and warranties made by the
Seller pursuant to Section 12.01 (other than clause (xxi)) shall be
true and correct with respect to the Eligible Investment Receivables
as of the related Subsequent Transfer Date, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior
to such Subsequent Transfer Date;
(v) not more than (30)% of the Principal Balances of the
Eligible Investment Receivables in the Reserve Account, including the
Eligible Investment Receivables to be conveyed to the Trustee on such
Subsequent Transfer Date (based on the characteristics of all of the
Eligible Investment Receivables included in the Reserve Account of
their related Cutoff Dates) shall represent vehicles financed at CCC's
used vehicle rates;
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(vi) the Seller shall, at its own expense, on or prior to
the related Subsequent Transfer Date indicate in its computer files
that the Eligible Investment Receivables identified in the Eligible
Investment Transfer Assignment have been sold to the Trustee, as
collateral agent, pursuant to this Agreement and the related Eligible
Investment Transfer Assignment;
(vii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trustee as
collateral agent in the Eligible Investment Receivables;
(viii) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders shall have been
utilized in selecting the Eligible Investment Receivables;
(ix) the addition of any such Eligible Investment
Receivables shall not result in a material adverse tax consequence to
the Trust or the Certificateholders;
(x) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of such
Eligible Investment Receivables in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date and (B) to the
Trustee the Opinion of Counsel required by Section 21.02(i)(1);
provided, however, that the Opinions of Counsel referred to in clauses
(A) and (B) shall be delivered only (X) during the Funding Period, on
the date on which the Opinion of Counsel required by the Agreement is
required to be delivered and shall relate to the Eligible Investment
Receivables transferred in the preceding Collection Period and (Y)
after the Pre-Funding Period, on each Subsequent Transfer Date on
which the aggregate Principal Balance (calculated as of the respective
Cutoff Dates) of the Eligible Investment Receivables delivered under
this Section 12.02 and not previously covered by an Opinion of Counsel
required by this clause (Y) equals or exceeds $5,000,000; and
(xi) the Seller shall have delivered to the Trustee, as
collateral agent, an Officers' Certificate confirming the satisfaction
of each condition specified in this paragraph (b).
(c) Promptly following the transfer to the Trustee, as collateral
agent, of Eligible Investment Receivables on any Subsequent Transfer Date, the
Trustee, as collateral agent, shall, and without further action hereunder or
thereunder, be deemed to sell, transfer, assign, set over and otherwise convey
to the Seller, effective as of the related Subsequent Transfer Date, without
recourse, representation or warranty, all the right, title and interest of the
Trustee as collateral agent in and to the related Fixed Value Payments, all
monies due and to become due and all amounts received with respect thereto and
all proceeds thereof, subject to Section 14.03(b).
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(d) Except as described in Section 21.08, the Seller shall not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments derived
from the Eligible Investment Receivables.
(e) Except as otherwise provided herein, all of the provisions of
this Agreement (exclusive of Section 12.01(xxi) and Section 14.04) applicable
to a Receivable shall also apply to the Eligible Investment Receivables, except
that, pursuant to Section 14.02, collections on and Purchase Amounts in respect
of the Eligible Investment Receivables shall be deposited into the Reserve
Account at the time when collections on and Purchase Amounts in respect of the
Receivables are required to be deposited into the Collection Account. For
purposes of calculating the amount in the Reserve Account, the amount
represented by an Eligible Investment Receivable shall be its Principal
Balance. The Servicer shall receive a Servicing Fee in respect of the Eligible
Investment Receivables calculated in the manner specified in Section 13.08 and
payable out of any collections on the Eligible Investment Receivables allocable
to interest.
SECTION 12.03. Repurchase Upon Breach. The Seller, the Servicer or
the Trustee, as the case may be, shall inform the other parties to the
Agreement promptly, in writing, upon the discovery of any breach of the
Seller's representations and warranties made pursuant to Section 12.01 or
16.01. Unless any such breach shall have been cured by the last day of the
second Collection Period following the discovery thereof by the Trustee or
receipt by the Trustee of notice from the Seller or the Servicer of such
breach, the Seller shall be obligated to repurchase any Standard Receivable or
Fixed Value Receivable materially and adversely affected by any such breach as
of such last day (or, at the Seller's option, the last day of the first
Collection Period following such discovery or notice). In consideration of the
repurchase of any Standard Receivable or Fixed Value Receivable, the Seller
shall remit the Purchase Amount, in the manner specified in Section 14.05.
Subject to the provisions of Section 16.03, the sole remedy of the Trustee, the
Trust or the Certificateholders with respect to a breach of representations and
warranties pursuant to Section 12.01 or 16.01 and the agreement contained in
this Section shall be to require the Seller to repurchase Standard Receivables
or Fixed Value Receivables pursuant to this Section 12.03, subject to the
conditions contained herein.
SECTION 12.04. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trustee, upon the execution and delivery of the Agreement, hereby revocably
appoints the Servicer, and the Servicer hereby accepts such appointment, to act
as the agent of the Trustee as custodian of the following documents or
instruments which are hereby constructively delivered to the Trustee as of the
Initial Cutoff Date (in the case of Initial Receivables) and as of each
Subsequent Transfer Date (in the case of Subsequent Receivables) with respect
to each Standard Receivable:
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(i) the original of the Standard Receivable or the Fixed
Value Receivable;
(ii) the original credit application fully executed by the
Obligor;
(iii) the original certificate of title or such documents
that the Servicer or the Seller shall keep on file, in accordance with
its customary procedures, evidencing the security interest of the
Seller in the Financed Vehicle; and
(iv) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Standard Receivable or a Fixed Value
Receivable, an Obligor or a Financed Vehicle.
SECTION 12.05. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files as custodian on behalf of the
Trustee for the benefit of all present and future Certificateholders, and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Trustee to comply with
these Standard Terms and Conditions of Agreement and the Agreement. In
performing its duties as custodian the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic audits of the Receivable
Files held by it under the Agreement, and of the related accounts, records and
computer systems, in such a manner as shall enable the Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report
to the Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review by
the Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B to
the Agreement or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Trustee or its duly authorized
representatives, attorneys or auditors a list of locations of the Receivable
Files and the related accounts, records and computer systems maintained by the
Servicer at such times during normal business hours as the Trustee shall
instruct.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer shall release any Receivable File to the Trustee, the Trustee's agent
or the Trustee's designee, as the case may be, at
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such place or places as the Trustee may designate, as soon as practicable.
SECTION 12.06. Instructions; Authority to Act. The Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trustee Officer.
SECTION 12.07. Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trustee and each of its officers, directors,
employees and agents for any and all liabilities, obligations, losses,
compensatory damages, payments, costs, or expenses of any kind whatsoever that
may be imposed on, incurred by or asserted against the Trustee or any of its
officers, directors, employees or agents as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer as
custodian of the Receivable Files; provided, however, that the Servicer shall
not be liable to the Trustee or any such officers, director, employee or agent
of the Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Trustee or any such officer,
director, employee or agent of the Trustee.
SECTION 12.08. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
or, if no Initial Receivables are conveyed to the Trustee, the Closing Date and
shall continue in full force and effect until terminated pursuant to this
Section 12.08. If CCC shall resign as Servicer in accordance with the
provisions hereof, or if all of the rights and obligations of any Servicer
shall have been terminated under Section 18.01, the appointment of such
Servicer as custodian shall be terminated by the Trustee or by Holders of the
(Class A) Certificates evidencing not less than 25% of the (Class A)
Certificate Balance, in the same manner as the Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 18.01. The
Trustee may terminate the Servicer's appointment as custodian, with cause, at
any time upon written notification to the Servicer, and without cause upon 30
days' prior written notification. As soon as practicable after any termination
of such appointment, the Servicer shall deliver the Receivable Files to the
Trustee or the Trustee's agent at such place or places as the Trustee may
reasonably designate.
ARTICLE XIII
Administration and Servicing of Receivables
SECTION 13.01. Duties of Servicer. The Servicer, as agent for the
Trustee (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it
services
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for itself or others. The Servicer's duties shall include collection and
posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Trustee with respect to distributions, and
making Advances pursuant to Section 14.04. Subject to the provisions of
Section 13.02, the Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered by the
Trustee to execute and deliver, on behalf of itself, the Trust, the
Certificateholders, the Trustee, or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Trustee (in the case of any
Receivable other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable
to the Servicer. If in any enforcement suit or legal proceeding it shall be
held that the Servicer may not enforce a Receivable on the ground that it shall
not be a real party in interest or a holder entitled to enforce such
Receivable, the Trustee shall, at the Servicer's expense and direction, take
steps to enforce such Receivable, including bringing suit in its name or the
name of the Certificateholders. The Trustee shall, upon written request of the
Servicer, furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
SECTION 13.02. Collection and Allocation of Receivable Payments.
The Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself or
others. The Servicer shall allocate collections between principal and interest
in accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself or others.
The Servicer may grant extensions, rebates or adjustments on a Standard
Receivable or a Fixed Value Receivable, which shall not, for the purposes of
the Agreement, modify the original due dates or amounts of the Scheduled
Payments on a Precomputed Receivable or the original due dates or amounts of
the originally scheduled payments of interest on Simple Interest Receivables;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it
shall promptly repurchase such Receivable from the Trust in accordance with the
terms of Section 13.07. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course
of servicing a Receivable. The
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Servicer shall not agree to any alteration of the interest rate on any
Receivable or of the amount of any Scheduled Payment on Precomputed Receivables
or the originally scheduled payments on Simple Interest Receivables.
SECTION 13.03. Realization Upon Receivables. On behalf of the Trust
or the Agent,as the case may be, the Servicer shall use its best efforts,
consistent with its customary servicing procedures, to repossess or otherwise
convert the ownership of the Financed Vehicle securing any Receivable as to
which the Servicer shall have determined eventual payment in full is unlikely.
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of automotive
receivables, which may include reasonable efforts to realize upon any recourse
to Dealers and selling the Financed Vehicle at public or private sale. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 13.04. Physical Damage Insurance. The Servicer, in
accordance with its customary servicing procedures, shall require that each
Obligor shall have obtained physical damage insurance covering the Financed
Vehicle as of the execution of the Standard Receivable or the Fixed Value
Receivable.
SECTION 13.05. Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Standard Receivable and each Fixed Value
Receivable in the related Financed Vehicle. The Trustee hereby authorizes the
Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Trust in the event of the relocation of a Financed
Vehicle or for any other reason.
SECTION 13.06. Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment
in full by the Obligor thereunder or repossession, nor shall the Servicer
impair the rights of the Trust or the Certificateholders in such Receivables,
nor shall the Servicer increase the number of scheduled payments due under a
Standard Receivable or a Fixed Value Receivable.
SECTION 13.07. Purchase of Receivables Upon Breach. The Servicer or
the Trustee shall inform the other party and the Seller promptly, in writing,
upon the discovery of any breach pursuant to Section 13.02, 13.05 or 13.06.
Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery (or, at the Servicer's election, the
last day of the
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first following Collection Period), the Servicer shall purchase any Receivable
materially and adversely affected by such breach as of such last day. If the
Servicer takes any action in any Collection Period pursuant to Section 13.02
that impairs the right of the Trustee, the Trust or the Certificateholders in
any Receivable or as otherwise provided in Section 13.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 14.05. For purposes of this Section 13.07, the
Purchase Amount shall consist in part of a release by the Servicer of all
rights of reimbursement with respect to Outstanding Precomputed Advances or
Outstanding Simple Interest Advances on the Receivable. Subject to Section
17.02, the sole remedy of the Trustee, the Trust or the Certificateholders with
respect to a breach pursuant to Section 13.02, 13.05 or 13.06 shall be to
require the Servicer to repurchase Receivables pursuant to this Section 13.07.
The Trustee shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section.
SECTION 13.08. Servicing Fee. The Servicing Fee for a Distribution
Date shall equal the product of (a) one twelfth, (b) the Servicing Rate and (c)
the Pool Balance as of the first day of the preceding Collection Period. The
Servicer shall also be entitled to all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according to
the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s") and other administrative fees or similar charges allowed by
applicable law with respect to the Receivables, collected (from whatever
source) on the Receivables, plus any reimbursement pursuant to Section 17.02.
SECTION 13.09. Servicer's Certificate. Not later than 11:00 am (New
York time) on each Determination Date, the Servicer shall deliver to the
Trustee, the Rating Agencies and the Seller, a Servicer's Certificate
containing all information necessary to make the distributions on the related
Distribution Date pursuant to Section 14.06 (including, if required,
withdrawals from any Reserve Account, withdrawals from or deposits to the
Payahead Account and Precomputed Advances by the Servicer pursuant to Section
14.04) for the related Collection Period. Receivables to be purchased by the
Servicer or to be repurchased by the Seller shall be identified by the Servicer
by account number with respect to such Receivable (as specified in Schedule A).
SECTION 13.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustee, on or before April 30 of each
year, an Officers' Certificate, dated as of December 31 of the preceding year,
stating that (A) a review of the
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activities of the Servicer during the preceding 12-month period (or such
shorter period as shall have elapsed since the Closing Date) and of its
performance hereunder and under the Agreement has been made under such
officers' supervision and (B) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations hereunder and under
the Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall send a copy of
such certificate and the report referred to in Section 13.11 to the Rating
Agencies. A copy of such certificate and the report referred to in Section
13.11 may be obtained by any Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than 5 Business Days thereafter, written notice in an Officers'
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under Section 18.01, clause (a) or (b).
SECTION 13.11. Annual Independent Certified Public Accountant's
Report. The Servicer shall cause a firm of independent certified public
accountants, who may also render other services to the Servicer, the Seller or
their Affiliates, to deliver to the Trustee on or before April 30 of each year
beginning April 30, 199__, a report addressed to the Board of Directors of the
Servicer to the effect that such firm has examined the financial statements of
CFC and issued its report thereon and that such examination (1) was made in
accordance with generally accepted auditing standards and accordingly included
such tests of the accounting records and such other auditing procedures as such
firm considered necessary in the circumstances; (2) included tests relating to
automotive loans serviced for others in accordance with the requirements of the
Uniform Single Audit Program for Mortgage Bankers (the "Program"), to the
extent the procedures in such Program are applicable to the servicing
obligations set forth herein; and (3) except as described in the report,
disclosed no exceptions or errors in the records relating to automobile and
light truck loans serviced for others that, in the firm's opinion, paragraph
four of such Program requires such firm to report.
The Report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 13.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivable Files in such cases where the Certificateholder shall
be required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the offices of the Servicer.
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Nothing in this Section shall affect the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section.
SECTION 13.13. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders.
SECTION 13.14. Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided that the Rating Agency Condition shall have been
satisfied in connection therewith; and, provided, further, that the Servicer
shall remain obligated and shall be liable to the Trustee and the
Certificateholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The fees and expenses of the
subservicer shall be as agreed between the Servicer and its subservicer from
time to time, and none of the Trust, the Trustee or the Certificateholders
shall have any responsibility therefor.
ARTICLE XIV
Distributions; Reserve Account;
Statements to Certificateholders
SECTION 14.01. Establishment of Trust Accounts. (a)(i) The
Servicer, for the benefit of the Certificateholders, shall establish
and maintain in the name of the Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders. Investment earnings on funds in the Collection
Account shall be paid to the Servicer.
(ii) The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the
Trustee an Eligible Deposit Account (the "Pre-Funding Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(iii) The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the
Trustee a non-interest bearing account (the
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"Distribution Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the
Certificateholders.
(b) Funds on deposit in the Collection Account and the Pre-Funding
Account shall be invested by the Trustee in Eligible Investments (which shall
not include any Eligible Investment Receivables) selected in writing by the
Servicer or an investment manager selected by the Servicer, which investment
manager shall have agreed to comply with the terms of these Standard Terms and
Conditions of Agreement and the Agreement as they relate to investing such
funds; provided, however, that it is understood and agreed that the Trustee
shall not be liable for any loss arising from such investment in Eligible
Investments. All such Eligible Investments shall be held by the Trustee for
the benefit of the Servicer, and on each Distribution Date all interest and
other investment income (net of losses and investment expenses) on funds on
deposit therein shall be paid to the Servicer. Other than as permitted by the
Rating Agencies, funds on deposit in the Collection Account and the Pre-Payment
Account shall be invested in Eligible Investments that will mature (A) not
later than the Business Day immediately preceding the next Distribution Date or
(B) on such next Distribution Date if either (x) such investment is held in the
trust department of the institution with which the Collection Account or the
Pre-Funding Account, as applicable, is then maintained and is invested in a
time deposit of (the Trustee) rated at least A-1 by Standard & Poor's and P-1
by Moody's (such account being maintained within the trust department of (the
Trustee)) or (y) the Trustee (so long as the short-term unsecured debt
obligations of the Trustee are either (1) rated at least P-1 by Moody's and A-1
by Standard & Poor's on the date such investment is made or (2) guaranteed by
an entity whose short-term unsecured debt obligations are rated at least P-1 by
Moody's and A-1 by Standard & Poor's on the date such investment is made) has
agreed to advance funds on such Distribution Date to the Distribution Account
in the amount payable on such investment on such Distribution Date pending
receipt thereof to the extent necessary to make distributions on such
Distribution Date. The guarantee referred to in clause (y) of the preceding
sentence shall be subject to the Rating Agency Condition. For the purpose of
the foregoing, unless the Trustee affirmatively agrees in writing to make such
advance with respect to such investment prior to the time an investment is
made, it shall not be deemed to have agreed to make such advance. Funds
deposited in the Collection Account upon the maturity of any Eligible
Investments on the day immediately preceding a Distribution Date are not
required to be invested overnight. If, at any time, either the Collection
Account or the Pre-Funding Account ceases to be an Eligible Deposit Account,
the Trustee (or the Servicer on its behalf) shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Collection Account and/or Pre-Funding
Account, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new account.
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(c) (i) The Servicer shall establish and maintain with the
Trustee an Eligible Deposit Account (the "Payahead Account"). The
Payahead Account shall not be property of the Trust.
(ii) The Servicer shall on or prior to each Distribution
Date (and prior to deposits to the Distribution Account) transfer from
the Collection Account to the Payahead Account all Payaheads as
described in Section 14.03 received by the Servicer during the
Collection Period. Notwithstanding the foregoing and the first
sentence of Section 14.02, for so long as the Servicer is permitted to
make monthly remittances to the Collection Account pursuant to Section
14.02, Payaheads need not be remitted to and deposited in the Payahead
Account but instead may be remitted to and held by the Servicer. So
long as such condition is met, the Servicer shall not be required to
segregate or otherwise hold separate any Payaheads remitted to the
Servicer as aforesaid but shall be required to remit Payaheads to the
Collection Account in accordance with Section 14.06(a).
SECTION 14.02. Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or
on behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables and not including Fixed Value Payments) and all Liquidation
Proceeds, both as collected during the Collection Period. Notwithstanding the
foregoing, for so long as (i) CCC remains the Servicer, (ii) no Event of
Default shall have occurred and be continuing and (iii)(x) CCC is a
wholly-owned subsidiary of CFC and CFC maintains a short-term rating of at
least A-1 by Standard & Poor's and P-1 by Moody's (and for five Business Days
following a reduction in either such rating) or (y) prior to ceasing daily
remittances, the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Servicer shall remit such collections with
respect to the preceding calendar month to the Collection Account on the
Determination Date immediately preceding the related Distribution Date. For
purposes of this Article XIV the phrase "payments by or on behalf of Obligors"
shall mean payments made with respect to the Receivables by Persons other than
the Servicer or the Seller.
SECTION 14.03. Application of Collections. All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 14.04(a) and, in the case
of Simple Interest Receivables, to reduce Outstanding Simple Interest
Advances to the extent described in Section 14.04(b). Next, any
excess shall be applied, in the case of Precomputed Receivables, to
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the Scheduled Payment and, in the case of Simple Interest Receivables,
to interest and principal in accordance with the Simple Interest
Method. With respect to Precomputed Receivables, any remaining excess
shall be added to the Payahead Balance, and shall be applied to prepay
the Precomputed Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Receivable
in full. Otherwise, any such remaining excess payments shall
constitute a Payahead and shall increase the Payahead Balance.
SECTION 14.04. Advances. (a) As of the close of business on the
last day of each Collection Period, if the payments by or on behalf of the
Obligor on a Precomputed Receivable (other than a Purchased Receivable) shall
be less than the Scheduled Payment, the Payahead Balance shall be applied by
the Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount a "Precomputed Advance"), to the extent that the Servicer, at its
sole discretion, shall determine that the Precomputed Advance shall be
recoverable from the Obligor, the Purchase Amount, Liquidation Proceeds or
proceeds of any other Precomputed Receivables. With respect to each
Precomputed Receivable, the Precomputed Advance shall increase Outstanding
Precomputed Advances. Outstanding Precomputed Advances shall be reduced by
subsequent payments by or on behalf of the Obligor, collections of Liquidation
Proceeds in respect of Precomputed Receivables, or payments of the Purchase
Amount in respect of Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust, and Outstanding Precomputed Advances with
respect to such Precomputed Receivable shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to such negative number shall be paid to the Servicer and the amount of
Outstanding Simple Interest Advances shall be reduced by such amount. In
addition, in the event that a Simple Interest Receivable becomes a Liquidated
Receivable, Liquidation Proceeds with respect to such Simple Interest
Receivable attributable to accrued and unpaid interest
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thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The
Servicer shall not make any advance with respect to principal of Simple
Interest Receivables or in respect of Eligible Investment Receivables.
SECTION 14.05. Additional Deposits. The Servicer shall deposit in
the Collection Account the aggregate Advances pursuant to Section 14.04. To
the extent that the Servicer fails to make a Simple Interest Advance pursuant
to Section 14.04(b) on the date required, the Trustee shall withdraw such
amount (or, if determinable, such portion of such amount as does not represent
advances for delinquent interest) from the Reserve Account and deposit such
amount in the Collection Account. The Servicer and the Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amount
with respect to Purchased Receivables, and the Servicer shall deposit therein
all amounts to be paid under Section 20.02. The Servicer shall deposit the
aggregate Purchase Amount with respect to Purchased Receivables when such
obligations are due, unless the Servicer shall not be required to make daily
deposits pursuant to Section 14.02.
SECTION 14.06. Distributions. (a) On each Distribution Date, the
Trustee shall cause to be transferred:
(i) From the Payahead Account, or from the Servicer in the
event that the second and third sentences of Section 14.01(c)(ii) are
applicable, to the Collection Account, in immediately available funds,
the aggregate previous Payaheads to be applied to Scheduled Payments
for the related Collection Period on, or as prepayments in full of,
Precomputed Receivables or prepayments for the related Collection
Period, pursuant to Sections 14.03 and 14.04, in the amounts set forth
in the Servicer's Certificate delivered on the related Determination
Date. A single, net transfer may be made.
(ii) From the Collection Account to the Distribution
Account, in immediately available funds, the entire amount then on
deposit in the Collection Account; provided, however, that in the
event that the Servicer is required to make deposits to the Collection
Account on a daily basis pursuant to Section 14.02, the amount of the
funds transferred from the Collection Account to the Distribution
Account will include only those funds that were deposited in the
Collection Account for the Collection Period related to such
Distribution Date.
(b) On or prior to each Determination Date, the Servicer shall
calculate the Total Distribution Amount, the Interest Distribution Amount, the
Principal Distribution Amount, the Class A Distributable Amount, and the Class
B Distributable Amount, and, based on the Total Distribution Amount and the
other amounts to be distributed on the related Distribution Date, determine the
amount distributable to Holders of each class of Certificates.
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(c) On each Distribution Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 14.09) shall distribute amounts on deposit in the
Distribution Account and, if applicable, the Reserve Account, in the manner and
priority set forth below:
(i) to the Servicer, from the Interest Distribution
Amount, the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
(ii) to the Class A Certificateholders:
(A) from the Class A Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has
been reduced by Servicing Fee payments), the sum of the Class
A Interest Distributable Amount and the Class A Interest
Carryover Shortfall as of the close of the preceding
Distribution Date;
(B) from the Class A Percentage of the Principal
Distribution Amount (other than the portion thereof
attributable to Realized Losses), the sum of the Class A
Principal Distributable Amount and the Class A Principal
Carryover Shortfall as of the close of the preceding
Distribution Date;
(iii) to the Class B Certificateholders:
(A) from the Class B Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has
been reduced by Servicing Fee payments), the sum of the Class
B Interest Distributable Amount and the Class B Interest
Carryover Shortfall as of the close of the preceding
Distribution Date; and
(B) from the Class B Percentage of the Principal
Distribution Amount, the sum of the Class B Principal
Distributable Amount and the Class B Principal Carryover
Shortfall as of the close of the preceding Distribution Date.
(d) The rights of the Class B Certificateholders to receive
distributions in respect of the Class B Certificates shall be and hereby are
subordinated to the rights of the Class A Certificateholders to receive
distributions in respect of the Class A Certificates and the rights of the
Servicer to receive the Servicing Fee (and any accrued and unpaid Servicing
Fees from prior Collection Periods) in the event of delinquency or defaults on
the Receivables. In addition, the Class A Certificateholders and the Class B
Certificateholders shall have the respective rights to receive funds from the
Reserve Account in the order of priority set forth below. Such subordination
and withdrawals from the Reserve
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Account shall be effected as follows, and all payments shall be effected by
applying funds in the following order:
(i) If the Class A Percentage of the Interest
Distribution Amount (as such Interest Distribution Amount has been
reduced by Servicing Fee payments) is less than the sum of the Class A
Interest Distributable Amount and any Class A Interest Carryover
Shortfall from the preceding Distribution Date, the Class A
Certificateholders shall be entitled to receive distributions in
respect of such deficiency first, from the Class B Percentage of the
Interest Distribution Amount; second, if such amounts are
insufficient, from amounts on deposit in the Reserve Account; and
third, if such amounts are insufficient, from the Class B Percentage
of the Principal Distribution Amount (other than the portion thereof
attributable to Realized Losses).
(ii) If the Class A Percentage of the Principal
Distribution Amount (other than the portion thereof attributable to
Realized Losses) is less than the sum of the Class A Principal
Distributable Amount and the Class A Principal Carryover Shortfall
from the preceding Distribution Date, the Class A Certificateholders
shall be entitled to receive distributions in respect of such
deficiency first, from the Class B Percentage of the Principal
Distribution Amount (other than the portion thereof attributable to
Realized Losses); second, if such amounts are insufficient, from
amounts on deposit in the Reserve Account; and third, if such amounts
are insufficient, from the Class B Percentage of the Interest
Distribution Amount.
(iii) If the Class B Percentage of the Interest
Distribution Amount, less the portion thereof, if any, distributed to
the Class A Certificateholders pursuant to clause (i) above, is less
than the Class B Interest Distributable Amount, the Class B
Certificateholders shall be entitled to receive such deficiency from
amounts on deposit in the Reserve Account (after giving effect to any
withdrawals therefrom pursuant to clauses (i) and (ii) above.
(iv) If the Class B Percentage of the Principal
Distribution Amount (other than the portion thereof attributable to
Realized Losses), less the portion thereof, if any, distributed to the
Class A Certificateholders pursuant to clause (ii) above, is less than
the Class B Principal Distributable Amount, the Class B
Certificateholders shall be entitled to receive such deficiency from
amounts on deposit in the Reserve Account (after giving effect to any
withdrawals therefrom pursuant to clauses (i), (ii) and (iii) above).
(e) On each Distribution Date, the Trustee shall distribute any
amounts remaining in the Distribution Account after making the distributions
described in Sections 14.06(c) and (d) above in the following amounts and in
the following order of priority: (i) into
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the Reserve Account until the amount on deposit therein equals the Specified
Reserve Account Balance and (ii) to the Seller.
(f) Subject to Section 20.01 respecting the final payment upon
retirement of each Certificate, the Servicer shall on each Distribution Date
instruct the Trustee to distribute to each Certificateholder of record on the
preceding Record Date either by wire transfer in immediately available funds to
the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Servicer appropriate instructions prior to such Distribution Date and such
Holder's Certificates of either Class in the aggregate evidence a denomination
of not less than $1,000,000, or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, the amounts to be distributed to such Certificateholder pursuant to
such Holder's Certificates.
SECTION 14.07. Reserve Account. (a) In order to effectuate the
subordination provided for herein and to assure that sufficient amounts to make
required distributions to Certificateholders will be available, the Servicer
shall establish and maintain an Eligible Deposit Account (the "Reserve
Account"), bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Certificateholders. The
Reserve Account will include the money and other property deposited and held
therein pursuant to Section 14.06(e), 14.08(a) and this Section.
On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Reserve Account Initial Deposit into the Reserve Account. The
Reserve Account and the Reserve Account Property shall not be part of the
Trust, but instead will be held by the Trustee, as collateral agent, for the
benefit of the Holders of the Certificates. The Seller hereby acknowledges
that the Reserve Account Initial Deposit (and any investment earnings thereon)
is owned directly by it, and the Seller hereby agrees to treat the same as its
assets (and earnings) for federal income tax and all other purposes.
(b) In order to give effect to the subordination provided for
herein and to assure the availability of the amounts maintained in the Reserve
Account, the Seller hereby sells, conveys and transfers to the Trustee, as
collateral agent, and its successors and assigns, the Reserve Account Initial
Deposit and all proceeds thereof and hereby pledges to the Trustee as
collateral agent, and its successors and assigns, all other amounts deposited
in or credited to the Reserve Account from time to time under the Agreement,
all Eligible Investments made with amounts on deposit therein, all earnings and
distributions thereon and proceeds thereof (other than proceeds constituting
net investment earnings attributable to the Reserve Account Property) subject,
however, to the limitations set forth below, and solely for the purpose of
securing and providing for payment of the Class A Distributable
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Amount and the Class B Distributable Amount in accordance with Section 14.06
and this Section (all the foregoing, subject to the limitations set forth
below, the "Reserve Account Property"), to have and to hold all the aforesaid
property, rights and privileges unto the Trustee, its successors and assigns,
in trust for the uses and purposes, and subject to the terms and provisions,
set forth in this Section. The Trustee hereby acknowledges such transfer and
accepts the trusts hereunder and shall hold and distribute the Reserve Account
Property in accordance with the terms and provisions of this Section.
(c) Consistent with the limited purposes for which such trust is
granted, the amounts on deposit in the Reserve Account on each Distribution
Date shall be available for distribution as provided in Section 14.06, in
accordance with and subject to the following: if the amount on deposit in the
Reserve Account (after giving effect to all deposits thereto and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance, the Trustee shall release and distribute all such amounts
(which distribution may include Eligible Investment Receivables) to the Seller.
Upon any such distribution to the Seller, the Certificateholders will have no
further rights in, or claims to, such amounts.
(d) Funds on deposit in the Reserve Account shall be invested by
the Trustee, as collateral agent, in Eligible Investments selected in writing
by the Seller or an investment manager selected by the Servicer, which
investment manager shall have agreed to comply with the terms of these Standard
Terms and Conditions of Agreement and the Agreement as they relate to investing
such funds; provided, however, that it is understood and agreed that the
Trustee shall not be liable for any loss arising from such investment in
Eligible Investments. Other than as permitted by the Rating Agencies, funds on
deposit in the Reserve Account shall be invested in Eligible Investments that
will mature (A) not later than the Business Day immediately preceding the next
Distribution Date or (B) on such next Distribution Date if either (x) such
investment is held in the trust department of the institution with which the
Reserve Account is then maintained and is invested in a time deposit of (the
Trustee) rated at least A-1 by Standard & Poor's and P-1 by Moody's (such
account being maintained within the trust department of (the Trustee)) or (y)
the Trustee (so long as the short-term unsecured debt obligations of the
Trustee are either (1) rated at least P-1 by Moody's and A-1 by Standard &
Poor's on the date such investment is made or (2) guaranteed by an entity whose
short-term unsecured debt obligations are rated at least P-1 by Moody's and A-1
by Standard & Poor's on the date such investment is made) has agreed to advance
funds on such Distribution Date to the Distribution Account in the amount
payable on such investment on such Distribution Date pending receipt thereof to
the extent necessary to make distributions on such Distribution Date. The
guarantee referred to in clause (y) of the preceding sentence shall be subject
to the Rating Agency Condition. For the purpose of the foregoing, unless the
Trustee affirmatively agrees in writing to
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make such advance with respect to such investment prior to the time an
investment is made, it shall not be deemed to have agreed to make such advance.
Funds deposited in the Reserve Account upon the maturity of any Eligible
Investments on the day immediately preceding a Distribution Date are not
required to be invested overnight. If, at any time, the Reserve Account ceases
to be an Eligible Deposit Account, the Trustee as collateral agent (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Reserve Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new account.
Investment earnings attributable to the Reserve Account Property shall
not be available to satisfy the subordination provisions of the Agreement and
shall not otherwise be subject to any claims or rights of the
Certificateholders or the Servicer. All such investments shall be made in the
name of the Trustee or its nominee, as collateral agent, and all income and
gain realized thereon shall be solely for the benefit of the Seller and shall
be payable by the Trustee to the Seller on each Distribution Date. Realized
losses, if any, on investments of the Reserve Account Property shall be charged
first against undistributed investment earnings attributable to the Reserve
Account Property and then against the Reserve Account Property.
(e) With respect to the Reserve Account Property, the Seller, on
behalf of itself, its successors and assigns, and the Trustee agree that:
(i) Any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Trustee, as
collateral agent, at an Eligible Institution. Each such deposit
account shall be subject to the exclusive custody and control of the
Trustee, and the Trustee shall have sole signature authority with
respect thereto.
(ii) Any Reserve Account Property that constitutes
Physical Property shall be delivered to the Trustee, as collateral
agent, in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition, solely
by the Trustee, as collateral agent, or a financial intermediary (as
such term is defined in Section 8- 313(4) of the UCC) acting solely
for the Trustee, as collateral agent.
(iii) Any Reserve Account Property that is a book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall be maintained by the
Trustee, as collateral agent, pending maturity or disposition, through
continued book-entry registration of such Reserve Account Property as
described in such paragraph.
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(iv) Any Reserve Account Property that is an
"uncertificated security" under Article 8 of the UCC and that is not
governed by clause (C) above shall be delivered to the Trustee, as
collateral agent, in accordance with paragraph (c) of the definition
of "Delivery" and shall be maintained by the Trustee, as collateral
agent, pending maturity or disposition, through continued registration
of the Trustee's (or its custodian's or it nominee's) ownership of
such security, in its capacity as collateral agent.
Effective upon Delivery of any Reserve Account Property in the form of
Physical Property, book-entry securities or uncertificated securities, the
Trustee shall be deemed to have purchased such Reserve Account Property for
value, in good faith and without notice of any adverse claim thereto.
(f) Each of the Seller and the Servicer agrees to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments
(including, without limitation, any UCC financing statements or the Agreement)
as may be determined to be necessary in an Opinion of Counsel to the Seller
delivered to the Trustee in order to perfect the interests created by this
Section and otherwise fully to effectuate the purposes, terms and conditions of
this Section. The Seller shall:
(i) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates, and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect or
to maintain the perfection of the Trustee's security interest; and
(ii) file the necessary financing statements or amendments
thereto within five days, and promptly notify the Trustee of any such
filing, after the occurrence of any of the following: (1) any change
in its corporate name or any trade name; (2) any change in the
location of its chief executive office or principal place of business;
and (3) any merger or consolidation or other change in its identity or
corporate structure and promptly notify the Trustee of any such
filings.
(g) The Trustee shall not enter into any subordination or
intercreditor agreement with respect to the Reserve Account Property.
(h) Following the payment in full of the Certificate Balance and
of all other amounts owing or to be distributed under the Agreement to
Certificateholders and the termination of the Trust, any amount remaining on
deposit in the Reserve Account shall be distributed to the Seller and any
Eligible Investment Receivables in the Reserve Account shall be transferred to
the Seller.
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SECTION 14.08. Pre-Funding Account. (a) On the Closing Date, the
Trustee will deposit the amount, if any, specified in the Agreement in the
Pre-Funding Account on behalf of the Seller from the net proceeds of the sale
of the Certificates. On each Subsequent Transfer Date, the Servicer shall
instruct the Trustee to withdraw from the Pre-Funding Account an amount equal
to (i) the Principal Balance of the Subsequent Receivables transferred to the
Trust on such Subsequent Transfer Date less the Reserve Account Initial Deposit
for such Subsequent Transfer Date, and to distribute such amount to or upon the
order of the Seller upon satisfaction of the conditions set forth in the
Agreement with respect to such transfer, and (ii) the Reserve Account Initial
Deposit for such Subsequent Transfer Date and, on behalf of the Seller, to
deposit such amount in the Reserve Account. If Subsequent Receivables are
transferred to the Trust on the Closing Date, the Closing Date shall also be a
Subsequent Transfer Date for the purposes of this Section.
(b) If (x) the Pre-Funded Amount has not been reduced to zero on
the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) or (y) the Pre-Funded Amount has been
reduced to $_______ or less on any Determination Date, in either case after
giving effect to any reductions in the Pre-Funded Amount on such Distribution
Date or Determination Date pursuant to paragraph (a) above, the Servicer shall
instruct the Trustee to withdraw from the Pre-Funding Account, in the case of
(x), on such Distribution Date or, in the case of (y), on the Distribution Date
immediately succeeding such Determination Date, the Pre-Funded Amount and
deposit such amount in the Distribution Account for payment as principal of the
Certificates up to the Certificate Balance. In addition, if the Pre-Funded
Amount is greater than $_________, the Seller will deposit into the
Distribution Account an amount equal to the sum of the Class A Prepayment
Premium and the Class B Prepayment Premium.
SECTION 14.09. Statements to Certificateholders. On each
Distribution Date, the Servicer shall provide to the Trustee for the Trustee to
forward to each Certificateholder of record as of the most recent Record Date,
a statement substantially in the form of Exhibit E setting forth at least the
following information as to each Class of Certificates to the extent
applicable:
(i) the amount of such distribution allocable to
principal of each class of Certificates;
(ii) the amount of such distribution allocable to interest
of each class of Certificates;
(iii) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
(iv) the Class A Certificate Balance and Class B
Certificate Balance and the Class A Pool Factor and Class B
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Pool Factor after giving effect to all payments reported under clause
(i) above on such date;
(v) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period or Collection Periods,
as the case may be;
(vi) the amount of the Class A Principal Carryover
Shortfall and Class A Interest Carryover Shortfall and Class B
Principal Carryover Shortfall and Class B Interest Carryover
Shortfall, as applicable, if any, on such Distribution Date and the
change in the Class A Principal Carryover Shortfall and Class A
Interest Carryover Shortfall and Class B Principal Carryover Shortfall
and Class B Interest Carryover Shortfall, as applicable, from the
preceding Distribution Date;
(vii) the amount of aggregate Realized Losses, if any, for
the second preceding Collection Period;
(viii) the aggregate Purchase Amounts for Receivables, if
any, that were repurchased in such period;
(ix) the amount otherwise distributable to the Class B
Certificateholders that is distributed to Class A Certificateholders
on such Distribution Date;
(x) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits and withdrawals
made on such Distribution Date;
(xi) the aggregate Payahead Balance and the change in such
balance from the preceding Distribution Date;
(xii) for Distribution Dates during the Funding Period (if
any), the remaining Pre-Funded Amount; and
(xiii) for the first Distribution Date that is on or
immediately following the end of the Funding Period (if any), the
amount of any remaining Pre-Funded Amount that has not been used to
fund the purchase of Subsequent Receivables and is passed through as
payments of principal of the Certificates.
Each amount set forth pursuant to subclauses (i), (ii), (v) or (vi) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Class A or Class B Certificate, as applicable.
SECTION 14.10. Tax Returns. The Trustee shall deliver to each
Holder of a Certificate, as may be required by the Code and applicable Treasury
Regulations, such information as may be required to enable each Holder to
prepare its federal and state income tax returns.
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SECTION 14.11. Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collections daily, the Servicer will
be permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to each Collection Period net
of distributions to be made to the Servicer with respect to such Collection
Period. The Servicer, however, will account to the Trustee and to the
Certificateholders as if all deposits, distributions and transfers were made
individually.
SECTION 14.12. Transfer of the Class B Certificates. Unless the
Class B Certificates are registered under the Securities Act of 1933, as
amended, pursuant to the Agreement or otherwise, in the event any Holder of a
Class B Certificate shall wish to transfer such Certificate, the Seller shall
provide to such Holder and any prospective transferee designated by such Holder
information regarding the Class B Certificates and the Receivables and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Class B Certificate
without registration thereof under the Securities Act of 1933, as amended,
pursuant to the exemption from registration provided by Rule 144A.
ARTICLE XV
The Certificates
SECTION 15.01. The Certificates. Unless otherwise specified in the
Agreement, the Certificates shall be issued in fully registered form in minimum
denominations of $1,000. The Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Trustee.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefit of the Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
A transferee of a Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 15.03.
SECTION 15.02. Authentication of Certificates. The Trustee shall
cause the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Seller, signed by its chairman of
the board, its president, any vice president, secretary, or assistant
treasurer, without further corporate action by the Seller, in authorized
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denominations, pursuant to the Agreement. No Certificate shall entitle its
Holder to any benefit under the Agreement or shall be valid for any purpose
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A or Exhibit B, as appropriate,
executed by the Trustee by manual signature. Such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication.
SECTION 15.03. Registration of Transfer and Exchange of
Certificates. The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 15.08, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. Unless otherwise specified
in the Agreement, the Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Trustee shall execute, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee. At the option of a Holder, Certificates
may be exchanged for other Certificates of authorized denominations of a like
aggregate amount upon surrender at the Corporate Trust Office of the
Certificates to be exchanged.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer and exchange shall be
cancelled and subsequently disposed of by the Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 15.04. Limitations on Transfer of the Class B Certificates.
(a) Unless otherwise set forth in the Agreement, the Class B Certificates
shall not have been and will not be registered under the Securities Act and
will not be listed on any exchange. No transfer of a Class B Certificate shall
be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under said Act and such state
securities laws. In the event that a transfer is to be made in reliance upon
an exemption from the Securities Act and state securities laws, in order to
assure
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compliance with the Securities Act and such laws, the Holder desiring to effect
such transfer and such Holder's prospective transferee shall each certify to
the Trustee in writing the facts surrounding the transfer in substantially the
forms set forth in Exhibit F (the "Transferor Certificate") and either Exhibit
G (the "Investment Letter") or Exhibit H (the "Rule 144A Letter"). Except in
the case of a transfer as to which the proposed transferee has provided a Rule
144A Letter, there shall also be delivered to the Trustee an opinion of counsel
that such transfer may be made pursuant to an exemption from the Securities Act
and state securities laws, which opinion of counsel shall not be an expense of
the Trust or Trustee; provided that such opinion of counsel in respect of the
applicable state securities laws may be a memorandum of law rather than an
opinion if such counsel is not licensed in the applicable jurisdiction. The
Seller shall provide to any Holder of a Class B Certificate and any prospective
transferee designated by any such Holder, information regarding the Class B
Certificates and the Receivables and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Class B Certificates without registration thereof
under the Securities Act pursuant to the registration exemption provided by
Rule 144A. Each Holder of a Class B Certificate desiring to effect such a
transfer shall, and does hereby agree to, indemnify the Trust, the Trustee and
the Seller against any liability that may result if the transfer is not so
exempt or is not made in accordance with federal and state securities laws.
(b) Unless otherwise specified in the Agreement, no transfer of a
Class B Certificate shall be made unless the Trustee shall have received a
representation from the transferee of such Class B Certificate, acceptable to
and in form and substance satisfactory to the Trustee, to the effect that such
transferee is not an employee benefit plan, trust or account (each a "Benefit
Plan") subject to the fiduciary responsibility provisions of ERISA or Section
4975 of the Code or a Person acting on behalf of any such Benefit Plan or using
assets of a Benefit Plan to acquire Class B Certificates. For purposes of the
preceding sentence, such representation shall be deemed to have been made to
the Trustee by the transferee's (including an initial acquiror's) acceptance of
a Class B Certificate. The Trustee shall be under no liability to any Person
for any registration of transfer of any Class B Certificate that is in fact not
permitted by this Section 15.04 or for making any payments due on such Class B
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of the Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Unless otherwise specified in the Agreement, the Trustee shall
cause each Class B Certificate to contain a legend stating that transfer of the
Class B Certificates is subject to certain restrictions and referring
prospective purchasers of the Class B
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Certificates to this Section 15.04 with respect to such restrictions.
SECTION 15.05. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then in
the absence of notice that such Certificate has been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute, and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section, the Trustee and the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 15.06. Persons Deemed Owners. Prior to due presentation of
a Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 14.06 and for all other purposes whatsoever,
and neither the Trustee nor the Certificate Registrar shall be bound by any
notice to the contrary.
SECTION 15.07. Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the Servicer,
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list, in such form as the Servicer may reasonably
require, of the names and addresses of the Certificateholders as of the most
recent Record Date. If three or more Certificateholders, or one or more
Holders of (Class A) Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under the Agreement or under the Certificates and
such application shall be accompanied by a copy of the communication that such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt for such application, afford such applicants access
during normal business hours to the current list of Certificateholders. Each
Holder, by receiving and holding a Certificate, shall be deemed to have agreed
to hold neither the Servicer nor the Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
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SECTION 15.08. Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustee in respect of the Certificates and the Agreement may be served.
The Trustee initially designates the Corporate Trust Office as specified in the
Agreement as its office for such purposes. The Trustee shall give prompt
written notice to the Servicer and to Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
SECTION 15.09. Book-Entry Certificates. The Class A Certificates
and, if so specified in the Agreement, the Class B Certificates may be issued
in the form of one or more typewritten Certificates representing Book-Entry
Certificates, to be delivered by, or on behalf of, the Seller to the initial
Clearing Agency, which, unless otherwise specified in the Agreement, shall be
The Depository Trust Company. In such case, the Certificates delivered to the
Depository Trust Company shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Certificate Owner will receive a definitive certificate representing
such Certificate Owner's interest in the Certificates, except as provided in
Section 15.11. Unless and until definitive, fully registered Certificates (the
"Definitive Certificates") have been issued to such Certificate Owners pursuant
to Section 15.11:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Seller, the Servicer, the Certificate Registrar
and the Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on such Certificates) as the
sole Holder of such Certificates and shall have no obligation to the
related Certificate Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control;
(iv) the rights of such Certificate Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Certificate
Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 15.11, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on such Certificates to such Clearing Agency
Participants; and
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(v) whenever the Agreement requires or permits actions to
be taken based upon instructions or directions of Holders of
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Certificate Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in such Certificates and has
delivered such instructions to the Trustee.
SECTION 15.10. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 15.11, the Trustee and the Servicer shall give all
such notices and communications specified herein to be given to Certificate
Owners to the Clearing Agency.
SECTION 15.11. Definitive Certificates. If (i) the Servicer advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement and the
Trustee or the Seller is unable to locate a qualified successor, (ii) the
Seller at its option advises the Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency or (iii) after the occurrence
of an Event of Default, Certificate Owners representing beneficial interests
aggregating not less than a majority of the aggregate outstanding principal
amount of the Book-Entry Certificates advise the Trustee and the Clearing
Agency in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Certificate Owners,
then the Clearing Agency shall notify all Certificate Owners and the Trustee of
the occurrence of such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of
the typewritten Certificates representing the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions, the Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. None of the Seller, the Certificate
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder. The Definitive Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Trustee, as evidenced by its execution thereof.
SECTION 15.12. Temporary Certificates. In the event that the
Agreement provides that either class of Certificates is not to be issued in
book-entry form pursuant to Section 15.09, pending the preparation of
definitive Certificates of such class,
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the Trustee, on behalf of the Trust, may execute, authenticate and deliver,
temporary Certificates of such class that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Certificates in lieu
of which they are issued. If temporary Certificates are issued, the Seller
will cause definitive Certificates to be prepared without unreasonable delay.
After the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the office or agency to be maintained as provided in
Section 15.08, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Trustee shall execute,
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates in authorized denominations. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under the Agreement as definitive Certificates.
ARTICLE XVI
The Seller
SECTION 16.01. Representations of Seller. The Seller makes the
following representations on which the Trustee shall be deemed to have relied
in accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
the Agreement and as of the Closing Date, in the case of Initial Receivables,
if any, and as of the applicable Subsequent Transfer Date, in the case of
Subsequent Receivables, if any, and shall survive the sale of the Receivables
to the Trustee.
(i) Organization and Good Standing. The Seller is duly
organized and validly existing as a corporation in good standing under
the laws of the State of Michigan, with power and authority to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at
all relevant times, and has, the corporate power, authority and legal
right to acquire and own the Standard Receivables and the Fixed Value
Receivables.
(ii) Due Qualification. The Seller is duly qualified to
do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(iii) Power and Authority. The Seller has the corporate
power and authority to execute and deliver the Agreement and the
Agency Agreement and to carry out their respective terms; the Seller
has full power and authority to sell and assign the property to be
sold and assigned to and deposited with (a) the
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Trustee as part of the Trust or (b) the Agent for the benefit of the
Trust and the Seller, and the Seller shall have duly authorized such
sale and assignment to the Trustee or the Agent, as applicable, by all
necessary corporate action; and the execution, delivery and
performance of the Agreement, the Agency Agreement and of each
Subsequent Transfer Assignment or Eligible Investment Transfer
Assignment, as applicable, shall have been duly authorized by the
Seller by all necessary corporate action.
(iv) Binding Obligation. The Agreement, the Agency
Agreement, each Subsequent Transfer Assignment and Eligible Investment
Transfer Assignment, when executed and delivered by the Seller, shall
constitute legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms.
(v) No Violation. The consummation of the transactions
contemplated by the Agreement and the Agency Agreement and the
fulfillment of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a
party or by which it is bound; or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the Agreement or the Agency Agreement); or violate any law or, to the
best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(vi) No Proceedings. To the Seller's best knowledge,
there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or
its properties: (i) asserting the invalidity of the Agreement, the
Agency Agreement or the Certificates; (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by the Agreement or the Agency Agreement;
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, the Agreement, the Agency
Agreement or the Certificates, or (iv) that might adversely affect the
federal income tax attributes of the Certificates.
SECTION 16.02. Corporate Existence. During the term of the
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of
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the jurisdiction of its incorporation and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of the
Agreement, the Agency Agreement and each other instrument or agreement
necessary or appropriate to the proper administration of the Agreement, the
Agency Agreement and the transactions contemplated hereby and thereby.
SECTION 16.03. Liabilities of Seller; Indemnities. The Seller shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under the Agreement.
(i) The Seller shall indemnify, defend and hold harmless
the Trustee and the Trust from and against any taxes that may at any
time be asserted against the Trustee or the Trust with respect to the
transactions contemplated in the Agreement, including any sales, gross
receipts, general corporation, tangible personal property, privilege,
or license taxes (but, in the case of the Trust, not including any
taxes asserted with respect to, and as the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the
Certificates, or asserted with respect to ownership of the Receivables
or Eligible Investment Receivables, or federal or other income taxes
arising out of the distributions on the Certificates) and costs and
expenses in defending against the same.
(ii) The Seller shall indemnify, defend and hold harmless
the Trustee and the Certificateholders from and against any loss,
liability or expense incurred by reason of (a) the Seller's willful
misfeasance, bad faith or negligence in the performance of its duties
under the Agreement, or by reason of reckless disregard of its
obligations and duties under the Agreement, and (b) the Seller's or
Trust's violation of federal or state securities laws in connection
with the offering and sale of the Certificates.
(iii) The Seller shall indemnify, defend and hold harmless
the Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and in the Agreement
contained, except to the extent that such cost, expense, loss, claim,
damage or liabilities shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Trustee.
Indemnification under this Section 16.03 shall survive the resignation
or removal of the Trustee and the termination of the Agreement and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Seller shall have made any indemnity payments to the Trustee pursuant to
this Section and the Trustee thereafter shall collect any of such amounts from
others,
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the Trustee shall promptly repay such amounts to the Seller, without interest.
SECTION 16.04. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under the Agreement, shall be the successor to the Seller
hereunder without the execution or filing of any document or any further act by
any of the parties to the Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 12.01 shall have been breached and no Event of Default, and
no event which, after notice or lapse of time, or both, would become an Event
of Default shall have happened and be continuing, (ii) the Seller shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement
of assumption comply with this Section and that all conditions precedent, if
any, provided for in the Agreement relating to such transaction have been
complied with, (iii) the Rating Agency Requirement shall have been satisfied
with respect to such transaction and (iv) the Seller shall have delivered to
the Trustee an Opinion of Counsel stating that, in the opinion of such Counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables and reciting the details
of such filings or (B) no such action shall be necessary to preserve and
protect such interest. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 16.05. Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under the Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 16.06. Seller May Own Certificates. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Seller or an Affiliate thereof, except as otherwise provided herein.
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SECTION 16.07. No Transfer of Excess Amounts. The Seller hereby
covenants that, except as otherwise provided in the Agreement, it will not
transfer, pledge or assign to any Person any part of its right to receive any
amounts in excess of the Reserve Account Specified Amount pursuant to Section
14.07(c) and (h) unless it has first delivered to the Trustee and each Rating
Agency an Opinion of Counsel in form and substance satisfactory to the Trustee
stating that such transfer will not (i) adversely affect the status of the
Trust as a grantor trust pursuant to subpart E, part I of subchapter J of the
Code or (ii) cause the Reserve Account to be taxable as a corporation under the
Code. The Seller shall give written notice to each Rating Agency of any
proposed transfer, pledge or assignment to any Person of all or any part of its
right to receive such excess amounts.
ARTICLE XVII
The Servicer
SECTION 17.01. Representations of Servicer. The Servicer makes the
following representations on which the Trustee shall be deemed to have relied
in accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
the Agreement and as of the Closing Date, in the case of the Initial
Receivables, if any, and as of the applicable Subsequent Transfer Date, in the
case of the Subsequent Receivables or Eligible Investment Receivables, if any,
and shall survive the sale of the Receivables to the Trustee.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under the laws
of the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the corporate power, authority and legal right to acquire, own, sell and
service the Standard Receivables and the Fixed Value Receivables and to hold
the Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing of
the Standard Receivables and the Fixed Value Receivables as required by the
Agreement and the Agency Agreement, respectively) shall require such
qualifications.
(c) Power and Authority. The Servicer has the power and
authority to execute and deliver the Agreement and the Agency Agreement and to
carry out their respective terms; and the execution, delivery and performance
of the Agreement and the Agency
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Agreement have been duly authorized by the Servicer by all necessary corporate
action.
(d) Binding Obligation. The Agreement and the Agency Agreement
constitute the legal, valid and binding obligations of the Servicer enforceable
in accordance with their respective terms.
(e) No Violation. The consummation of the transactions
contemplated by the Agreement and the Agency Agreement and the fulfillment of
the terms hereof and thereof shall not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or bylaws of the
Servicer, or any indenture, agreement or other instrument to which the Servicer
is a party or by which it is bound; or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than the Agreement or the
Agency Agreement); or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of any
court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Servicer or its
properties.
(f) No Proceedings. To the Servicer's best knowledge, there are
no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of the Agreement, the Agency Agreement or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by the Agreement and the Agency Agreement,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by the Servicer of its obligations under, or the
validity or enforceability of, the Agreement, the Agency Agreement or the
Certificates, or (iv) relating to the Servicer and which might adversely affect
the federal income tax attributes of the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable shall be shown on
the Receivable Files as the subject of a bankruptcy proceeding.
SECTION 17.02. Indemnities of Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under the Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Trustee, the Trust, the Certificateholders and the Seller from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership or
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operation by the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Seller, the Trust and the Certificateholders from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its duties under the Agreement
or by reason of reckless disregard of its obligations and duties under the
Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of CCC (or any successor thereto pursuant to Section
17.03) as Servicer pursuant to Section 18.01, or a resignation by such Servicer
pursuant to the Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Trustee) pursuant
to Section 18.02.
Indemnification under this Section shall survive the resignation or
removal of the Trustee or the termination of the Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and
the recipient thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
SECTION 17.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Chrysler
Corporation, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder shall be the successor to the Servicer
under the Agreement without further act on the part of any of the parties to
the Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Event of Default and no event which, after notice or lapse
of time, or both, would become an Event of Default shall have happened and be
continuing, (ii) the Servicer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in the Agreement relating to
such transaction have been complied with, (iii) the Rating Agency Condition
shall have been satisfied with respect to such transaction and (iv) the
Servicer shall have delivered to the Trustee an Opinion of Counsel stating
that, in the opinion of such
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counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Standard Receivables
and the Agent in the Fixed Value Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 17.04. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement, for any action
taken or for refraining from the taking of any action pursuant to the Agreement
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under the Agreement. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising under the Agreement.
Except as provided in the Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
the Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of the Agreement and
the rights and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
ARTICLE XVIII
Default
SECTION 18.01. Events of Default. If any one of the following
events ("Events of Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Trustee for
deposit to the Collection Account or the Distribution Account any proceeds or
payment required to be so delivered under the terms of the Certificates and the
Agreement that shall continue unremedied for a period of three Business Days
after written notice of such failure is received by the Servicer from the
Trustee or after discovery of such failure by an officer of the Servicer; or
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(b) Failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in the
Certificates or in the Agreement, which failure shall (a) materially and
adversely affect the rights of Certificateholders and (b) continue unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the Servicer or
the Seller (as the case may be) by the Trustee or (2) to the Servicer or the
Seller (as the case may be) and to the Trustee by the Holders of (Class A)
Certificates evidencing not less than 25% of the (Class A) Certificate Balance;
or
(c) The occurrence of an Insolvency Event with respect to the
Servicer or the Seller;
then, and in each and every case, so long as the Event of Default shall not
have been remedied, either the Trustee or the Holders of (Class A) Certificates
evidencing not less than 25% of the (Class A) Certificate Balance, by notice
then given in writing to the Servicer (and to the Trustee if given by
Certificateholders) may terminate all of the rights and obligations (other than
the obligations set forth in Section 17.02) of the Servicer under the
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under the Agreement, whether with respect
to the Certificates or the Receivables or otherwise, shall, without further
action, pass to and be vested in the Trustee or such successor Servicer as may
be appointed under Section 18.02; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under the Agreement,
including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to any Receivable. All
reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Receivable Files to the successor Servicer and
amending the Agreement to reflect such succession as Servicer pursuant to this
Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of an Event of Default, the Trustee shall give notice thereof to
the Rating Agencies.
SECTION 18.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 18.01 or the Servicer's
resignation in accordance with the terms of
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the Agreement, the predecessor Servicer shall continue to perform its functions
as Servicer under the Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 45 days from the delivery to the
Trustee of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of the Agreement and (y) the date upon
which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of the Servicer's termination hereunder, the Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment by
a written assumption in form acceptable to the Trustee. In the event that a
successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section, the
Trustee without further action shall automatically be appointed the successor
Servicer and shall be entitled to the Servicing Fee. Notwithstanding the
above, the Trustee shall, if it shall be legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established
institution having a net worth of not less than $100,000,000 and whose regular
business shall include the servicing of automotive receivables as the successor
to the Servicer under the Agreement.
(b) Upon appointment, the successor Servicer (including the
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all of the
rights granted to the predecessor Servicer by the terms and provisions of the
Agreement.
(c) The Servicer may not resign unless it is prohibited from
serving as such by law.
SECTION 18.03. Repayment of Advances. If the Servicer shall change,
the predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 14.03 and 14.04 with respect to all
Advances made by the predecessor Servicer.
SECTION 18.04. Notification to Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders and to the Rating Agencies.
SECTION 18.05. Waiver of Past Defaults. The Holders of (Class A)
Certificates evidencing not less than a majority of the (Class A) Certificate
Balance may, on behalf of all Holders of Certificates, waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default
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in making any required deposits to or payments from the Trust Accounts in
accordance with the Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of the Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
ARTICLE XIX
The Trustee
SECTION 19.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by the Agreement and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs; provided, however,
that if the Trustee shall assume the duties of the Servicer pursuant to Section
18.02, the Trustee in performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to automobile
receivables that it services for itself or others.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in the Agreement and no
implied covenants or obligations shall be read into the Agreement
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of the Agreement; provided, however, that the Trustee shall examine
the certificates and opinions to determine whether or not they conform
to the requirements of the Agreement.
(c) The Trustee shall take and maintain custody of the Schedule of
Receivables included as an exhibit to the Agreement and shall retain all
Servicer's Certificates identifying Receivables that become Purchased
Receivables and Liquidated Receivables.
(d) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken in good faith in accordance with the
Agreement or at the direction of the Holders of (Class A) Certificates
evidencing not less than 25% of the (Class A) Certificate Balance relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under the Agreement;
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(e) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of clause
(d) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trustee Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to the Agreement.
(f) No provision of the Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 19.02. Certain Matters Affecting Trustee. Except as
otherwise provided in Section 19.01:
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in
any such document.
(b) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters or relating to the
Agreement, the Agency Agreement or the Certificates shall be full and
complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it under the Agreement or the
Agency Agreement in good faith and in accordance with such advice or
opinion of such counsel.
(c) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by the Agreement or the
Agency Agreement, or to institute, conduct or defend any litigation
under the Agreement or the Agency Agreement at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of the Agreement or the Agency Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that
may be incurred therein or thereby.
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(d) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith which it believes to be
authorized or within its rights or powers conferred upon it by the
Agreement; provided, that such conduct does not constitute willful
misconduct, bad faith or negligence on the part of the Trustee.
(e) The Trustee may execute any of the trusts or powers
or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian, and the Trustee shall not be
responsible for any misconduct or negligence of any such agent,
attorney or custodian appointed with due care by it hereunder.
SECTION 19.03. Trustee Not Liable for Certificates or Receivables.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee shall make
no representations as to the validity or sufficiency of the Agreement or of the
Certificates (other than the certificate of authentication on the
Certificates), or of any Receivable or Eligible Investment Receivable or
related document. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Receivable or Eligible Investment Receivable, or the perfection and
priority of any security interest created by any Receivable or Eligible
Investment Receivable in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the efficacy of the Trust or
its ability to generate the payments to be distributed to Certificateholders
under the Agreement, including, without limitation: the existence, condition
and ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable or Eligible
Investment Receivable or any computer or other record thereof; the validity of
the assignment of any Receivable or Eligible Investment Receivable to the Trust
or of any intervening assignment; the completeness of any Receivable or
Eligible Investment Receivable; the performance or enforcement of any
Receivable or Eligible Investment Receivable; the compliance by the Seller or
the Servicer with any warranty or representation made under the Agreement or in
any related document and the accuracy of any such warranty or representation or
any action of the Servicer taken in the name of the Trustee.
SECTION 19.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates and may deal with the Seller and the Servicer in banking
transactions with the same rights as it would have if it were not Trustee.
SECTION 19.05. Trustee's Fees and Expenses. The Servicer shall pay
to the Trustee, and the Trustee shall be entitled to receive, reasonable
compensation as shall have been separately
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agreed upon before the date of the Agreement between the Seller and the Trustee
(which shall not be limited by any provision of law regarding the compensation
of a trustee of an express trust) for all services rendered by it in the
execution of the trusts created by the Agreement and in the exercise and
performance of any of the Trustee's powers and duties under the Agreement and
the Agency Agreement. The Trustee shall be entitled to be reimbursed by the
Seller for its reasonable expenses under the Agreement and the Agency
Agreement, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Trustee may employ in
connection with the exercise and performance of its rights and duties under the
Agreement and the Agency Agreement.
SECTION 19.06. Eligibility Requirements for Trustee. The Trustee
shall at all times be a corporation having an office in the same state as the
location of the Corporate Trust Office; organized and doing business under the
laws of such state or the United States of America; authorized under such laws
to exercise corporate trust powers; having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) a rating of at least Baa3
by Moody's. If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 19.07.
SECTION 19.07. Resignation or Removal of Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 19.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Servicer may remove
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the Trustee. If the Servicer shall remove the Trustee under the authority of
the immediately preceding sentence, the Servicer shall promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Trustee so removed and one copy
to the successor Trustee, and shall pay all fees owed to the outgoing Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 19.08 and payment of all fees and expenses owed to the
outgoing Trustee. The Servicer shall provide notice of such resignation or
removal of the Trustee to each of the Rating Agencies.
SECTION 19.08. Successor Trustee. Any successor Trustee appointed
pursuant to Section 19.07 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such
appointment under the Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under the
Agreement, with like effect as if originally named as Trustee. The predecessor
Trustee shall upon payment of its fees and expenses deliver to the successor
Trustee all documents and statements and monies held by it under the Agreement;
and the Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 19.06.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section, the Servicer shall mail notice thereof to all Certificateholders and
to the Rating Agencies. If the Servicer shall fail to mail such notice within
10 days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 19.09. Merger or Consolidation of Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 19.06, without the execution
or filing of any instrument or any further act on the part of any of the
parties hereto, anything herein to the contrary
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notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Rating Agencies
SECTION 19.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
or any part thereof and, subject to the other provisions of this Section, such
powers, duties, obligations, rights, and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee under the Agreement shall be required to meet the terms of
eligibility as a successor Trustee pursuant to Section 19.06 and no notice of
the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 19.08.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred
or imposed upon any such separate trustee or co- trustee shall be
conferred upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed, the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) No trustee under the Agreement shall be personally
liable by reason of any act or omission of any other trustee under the
Agreement; and
(iii) The Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate
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trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to the
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of the Agreement, specifically including every provision of
the Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Each such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of the Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor co-trustee or separate trustee.
SECTION 19.11. Representations and Warranties of Trustee. The
Trustee shall make the following representations and warranties on which the
Seller and Certificateholders shall be deemed to rely:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation.
(ii) The Trustee has full corporate power, authority and
legal right to execute and deliver, and to perform its obligations
under, the Agreement and the Agency Agreement, and shall have taken
all necessary action to authorize the execution and delivery of, and
the performance of its obligations under, the Agreement and the Agency
Agreement.
(iii) The Agreement and the Agency Agreement shall have
been duly executed and delivered by the Trustee.
SECTION 19.12. No Bankruptcy Petition. The Trustee, by entering
into the Agreement, and each Certificateholder, by accepting a Certificate,
hereby covenant and agree that they will not at any time institute against, or
join any other Person in instituting against, the Seller or the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other similar proceedings under any federal or state bankruptcy or similar
law in connection with the Certificates or the Agreement.
SECTION 19.13. Trustee's Certificate. On or as soon as practicable
after each Record Date as of which Receivables shall be
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assigned to the Seller or the Servicer pursuant to Section 19.14, the Trustee
shall execute a Trustee's Certificate (in the form of Exhibit M-1 or Exhibit
M-2, as applicable), based on the information contained in the Servicer's
Certificate for the related Collection Period, amounts deposited to the
Collection Account and notices received pursuant to the Agreement, identifying
the Receivables repurchased by the Seller pursuant to Section 12.03 or
purchased by the Servicer pursuant to Section 13.07 or Section 20.02 during
such Collection Period, and shall deliver such Trustee's Certificate,
accompanied by a copy of the Servicer's Certificate for such Collection Period,
to the Seller or the Servicer, as applicable. The Trustee's Certificate
submitted with respect to such Distribution Date shall operate, as of such
Distribution Date, as an assignment, without recourse, representation or
warranty, to the Seller or the Servicer, as applicable, of all the Trustee's
right, title and interest in and to any such Repurchased Receivable and to the
other property conveyed to the Trust with respect thereto, and all security and
documents relating thereto, such assignment being an assignment outright and
not for security.
SECTION 19.14. Trustee's Assignment of Repurchased Receivables.
With respect to all Standard Receivables repurchased by the Seller pursuant to
Section 12.03 or purchased by the Servicer pursuant to Section 13.07 or Section
20.02, the Trustee shall by a Trustee's Certificate (in the form of Exhibit M-1
or Exhibit M-2, as applicable) assign, without recourse, representation or
warranty, to the Seller or the Servicer, as applicable, all the Trustee's
right, title and interest in and to any such Standard Receivable and the other
property conveyed to the Trust with respect thereto, and all security and
documents relating thereto, such assignment being an assignment outright and
not for security.
ARTICLE XX
Termination
SECTION 20.01. Termination of the Trust. (a) The respective
obligations and responsibilities of the Seller, the Servicer and the Trustee
created hereby and the Trust created by the Agreement shall terminate (i) upon
the payment to Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust and (ii) at the time provided in Section 20.02; provided, however,
that in no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James, living on the date of the Agreement. The Servicer shall promptly
notify the Trustee of any prospective termination pursuant to this Section.
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(b) Except as provided in Section 20.01(a), neither the Seller nor
any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation of the Certificates, shall be given by the Trustee by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the specified Distribution Date stating
(A) the Distribution Date upon which final payment of the Certificates shall be
made upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (B) the amount of such final payment and (C) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified. The Trustee shall
give such notice to the Certificate Registrar (if other than the Trustee) at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 14.06.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after such second notice all of the Certificates shall not have
been surrendered for cancellation, the Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to the Agreement. Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Trustee to the Seller.
SECTION 20.02. Optional Purchase of All Receivables. On the last
day of any Collection Period as of which the Pool Balance shall be less than or
equal to 10% of the Original Pool Balance, the Servicer shall have the option
to purchase the corpus of the Trust; provided, however, that the Servicer may
not effect any such purchase if at such time the rating of CFC's long-term debt
obligations is less than Baa3 by Moody's, unless the Trustee shall have
received an Opinion of Counsel to the effect that such purchase would not
constitute a fraudulent conveyance. To exercise such option, the Servicer
shall deposit an amount into the Collection Account pursuant to Section 14.05
equal to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any other property held by the Trust,
such value to be determined by an appraiser mutually agreed upon by the
Servicer and the Trustee. The Servicer thereafter shall succeed to all
interests in and to the Trust.
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ARTICLE XXI
Miscellaneous Provisions
SECTION 21.01. Amendment. The Agreement may be amended by the
Seller, the Servicer and the Trustee, without the consent of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in the Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any provision in the Agreement or of
modifying in any manner the rights of the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder.
The Agreement may also be amended from time to time by the Seller, the
Servicer and the Trustee with the consent of the Holders of Class A
Certificates and Class B Certificates (which consent shall be conclusive and
binding on such Holders and on all future Holders of such Certificates and of
any Certificates issued upon the transfer therefor or in exchange thereof or in
lieu thereof, whether or not notation of such consent is made upon the
Certificates), each voting as a class, evidencing not less than a majority of
the Class A Certificate Balance and Class B Certificate Balance, respectively,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Agreement, or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made on any Certificate or (b)
reduce the aforesaid percentage of the Class A Certificate Balance and Class B
Certificate Balance required to consent to any such amendment without the
consent of the Holders of all Certificates then outstanding.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of
evidencing the authorization of any action by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to the Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of
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Counsel stating that the execution of such amendment is authorized or permitted
by the Agreement and the Opinion of Counsel referred to in Section 21.02(i)(1).
The Trustee may, but shall not be obligated to, enter into any such amendment
that affects the Trustee's own rights, duties or immunities under the Agreement
or otherwise.
SECTION 21.02. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Certificateholders and the Trustee in the Standard Receivables and the Agent in
the Fixed Value Receivables and in the proceeds thereof. The Seller shall
deliver (or cause to be delivered) to the Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Trustee at least five days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of the Seller and the Servicer shall have an obligation
to give the Trustee at least 60 days' prior written notice of any relocation of
its principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement, and shall promptly file any such amendment or new
financing statement. The Servicer shall at all times maintain its principal
executive office and each office from which it shall service Receivables within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Standard Receivable and each Fixed Value Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Receivable, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Receivable and the amounts from time to
time deposited in the Distribution Account and Payahead Account in respect of
such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under the Agreement of the Standard Receivables to
the Trustee and of the Fixed Value Receivables to the Agent, the Servicer's
master computer records (including any back-up archives) that refer to a
Standard Receivable or a Fixed
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Value Receivable shall indicate clearly the interest of the Trust or Agent, as
the case may be, in such Standard Receivable or Fixed Value Receivable, and
that such Standard Receivable or Fixed Value Receivable is owned by the Trustee
or the Agent, as the case may be. Indication of the Trustee's or Agent's
ownership of a Standard Receivable or Fixed Value Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, such
Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to, any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or print-outs (including any restored
from back-up archives) that, if they shall refer in any manner whatsoever to
any Standard Receivable or Fixed Value Receivable, shall indicate clearly that
such Standard Receivable or such Fixed Value Receivable has been sold and is
owned by the Trustee or the Agent, as the case may be.
(g) The Servicer shall permit the Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee,
within five Business Days, a list of all Receivables (by contract number and
name of Obligor) then held as part of the Trust, together with a reconciliation
of such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) promptly after the execution and delivery of the
Agreement and, if required pursuant to Section 21.01, of each
amendment hereto and on certain Distribution Dates as required by
Sections 2.02(b)(2)(iv)(B) and 12.02(b)(x)(B) of the Agreement, an
Opinion of Counsel stating that, in the opinion of such Counsel,
either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning more than three
months after the initial Cutoff Date, an Opinion of Counsel, dated as
of a date during such 90-day period, stating that, in the opinion of
such counsel, either (A) all financing
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statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (l) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities
Exchange Act of 1934 within the time periods specified in such sections.
SECTION 21.03. Separate Counterparts. The Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 21.04. Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
the Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties to the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 21.01 or 18.05) or in any manner otherwise control the
operation and management of the Trust or the obligations of the parties to the
Agreement; nor shall any provision in the Agreement or contained in the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
the Agreement, unless: (i) such Holder previously shall have given to the
Trustee written notice of a continuing Event of Default; (ii) the Holders of
Certificates evidencing not less than 25% of the Certificate Balance shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee under the Agreement and shall have
offered to the Trustee such reasonable indemnity as it may
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require against the costs, expenses and liabilities to be incurred therein or
thereby; (iii) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; and (iv) during such 60-day period no request
or waiver inconsistent with such written request shall have been given to the
Trustee by Holders representing a majority of the Certificate Balance. It is
understood and intended that no one or more Holders of Certificates shall have
any right in any manner whatever by virtue of, or by availing of, any
provisions of the Agreement to affect, disturb or prejudice the rights of any
other Holders of Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under the
Agreement, except in the manner provided in the Agreement.
SECTION 21.05. Governing Law. THE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 21.06. Notices. All demands, notices and communications
upon or to the Seller, the Servicer, the Trustee or the Rating Agencies under
the Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Seller, to Chrysler Financial Corporation,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Secretary,
((810) 948-3060); (b) in the case of the Servicer, to Chrysler Credit
Corporation, 27777 Franklin Road, Southfield, Michigan 48034, Attention of
Secretary ((810) 948-3060); (c) in the case of the Trustee, at the Corporate
Trust Office; (d) in the case of Moody's, to Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007; (e) in
the case of Standard & Poor's, to Standard & Poor's Ratings Group, 25 Broadway
- - 15th Floor, New York, New York 10004, Attention: Asset Backed Surveillance
Department; (f) in the case of Duff and Phelps, to Duff & Phelps Credit Rating
Company, 55 East Monroe Street, 35th Floor, Chicago, Illinois 60603, Attention:
Structured Finance; and (g) in the case of Fitch, to Fitch Investors Service,
Inc., One State Street Plaza, New York, New York 10004, Attention: Structured
Surveillance Department. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in the Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice.
SECTION 21.07. Severability of Provisions. Any provision of the
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of the
Agreement, and any such prohibition
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or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 21.08. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 16.04 and 17.03 and as
provided in the provisions of the Agreement concerning the resignation of the
Servicer, the Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Trustee and the Holders of
Certificates evidencing not less than 66% of the Certificate Balance.
SECTION 21.09. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever.
SECTION 21.10. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Servicer, the
Trustee and the Certificateholders, and nothing in this Agreement, whether
express or implied, shall be construed to give any other Person any legal or
equitable right, remedy or claim in respect of the Trust or under or in respect
of the Agreement or any covenants, conditions or provisions contained herein.
SECTION 21.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 21.12. Nonpetition Covenants. (a) Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller shall not,
prior to the date that is one year and one day after the termination of the
Agreement with respect to the Trust, acquiesce to, petition or otherwise invoke
or cause the Trust to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Trust under any
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of the Trust or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Trust.
(b) Notwithstanding any prior termination of the Agreement, the
Servicer shall not, prior to the date that is one year and one day after the
termination of the Agreement with respect to the Seller, acquiesce to, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Seller or
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any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Seller.
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EXHIBIT A
FORM OF CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS A CERTIFICATE
WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS B CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
PREMIER AUTO TRUST 199_-_
____% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and the
Amortizing Payments on the Fixed Value Receivables (each, as defined herein)
secured by new and used automobiles and light duty trucks.
(This Class A Certificate does not represent an interest in or obligation of
Chrysler Financial Corporation, Chrysler Credit Corporation or any of their
respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT _________________________________________ is the
registered owner of _______________________________________ DOLLARS
nonassessable, fully-paid, fractional undivided interest in Premier Auto Trust
199_-_ (the "Trust") formed pursuant to the Pooling and Servicing Agreement
(the "Agreement") dated as of _________________, among Chrysler Financial
Corporation, a Michigan corporation, as seller (the "Seller"), Chrysler Credit
Corporation, a Delaware corporation, as servicer (the "Servicer") and
______________________, a ________________________________ banking association,
as trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement.
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This Certificate is one of a duly authorized series of Certificates,
designated as the _____% Asset Backed Certificates, Class A (herein called the
"Class A Certificates"), all issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Seller, the Servicer, the Trustee and Holders of
the Certificates. The Class A Certificates are subject to all terms of the
Agreement.
The property of the Trust includes a pool of retail installment sale
contracts for new and used automobiles and light duty trucks and the Amortizing
Payments on the Fixed Value Receivables (collectively, the "Receivables"), all
monies due under such Receivables on or after the related Cutoff Date, in the
case of Precomputed Receivables, or received on or after the related Cutoff
Date, in the case of Simple Interest Receivables, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and all proceeds of the
foregoing. The term "Fixed Value Receivables" shall mean retail sale contracts
secured by new automobiles or light duty trucks with a series of fixed level
payment monthly installments (the "Amortizing Payments") and a final fixed
value payment that is greater than each Amortizing Payment.
Under the Agreement, there will be distributed on the ______ day of
each month or, if such ______ day is not a Business Day, the next Business Day
(each, a "Distribution Date"), commencing on ______________________, to the
Person in whose name this Class A Certificate is registered at the close of
business on the first day of the month in which such Distribution Date occurs
(the "Record Date"), such Certificateholder's fractional undivided interest in
the amount to be distributed to Class A Certificateholders on such Distribution
Date.
It is the intent of the Seller, the Trustee and the Certificateholders
that, for purposes of federal income, state and local income and single
business tax and any other income taxes, the Trust will be treated as a grantor
trust and the Certificates will be treated as interests in a grantor trust.
The Seller, the Servicer, the Trustee and the Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as interests in a
grantor trust.
Distributions on this Class A Certificate will be made as provided in
the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A Certificate or the making of any
notation hereon, except that with respect to Class A Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such
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<PAGE> 107
nominee. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class A Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class A Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class A Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
Date: PREMIER AUTO TRUST 199 __-__
By: ______________________________,
not in its individual capacity
but solely as Trustee
By: ______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
Date:
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<PAGE> 108
__________________________________
as Trustee
By: ______________________________
Authorized Signatory
A-4
<PAGE> 109
(REVERSE OF CLASS A CERTIFICATE)
The Class A Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliates of any of
them, and no recourse may be had against such parties or their assets except as
expressly set forth or contemplated herein or in the Agreement. In addition,
this Class A Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Agreement. A copy of the
Agreement may be examined by any Certificateholder upon written request during
normal business hours at the principal office of the Seller and at such other
places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee and the rights of the Certificateholders
at any time by the Seller, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance. Any such consent by the Holder of this Class A Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Class A Certificate issued upon the transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
is made upon this Class A Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Class A Certificate is registerable in
the Certificate Register upon surrender of this Class A Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, The City of
New York, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Class A Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated transferee.
The initial Certificate Registrar appointed under the Agreement is
________________________________.
Except as provided in the Agreement, the Class A Certificates are
issuable only as registered certificates without coupons in a minimum
denomination of $________. As provided in the Agreement and subject to certain
limitations therein set forth, Class A Certificates are exchangeable for new
Class A Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No
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<PAGE> 110
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and none of the
Trustee, the Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held by the Trust. The Servicer of the Receivables
may at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Certificates; however, such right of
purchase is exercisable only as of the last day of any Collection Period as of
which the Pool Balance is less than or equal to 10% of the Original Pool
Balance.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Class A Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________ to transfer said Class
A Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_______________________
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Class A Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-7
<PAGE> 112
EXHIBIT B
FORM OF CLASS B CERTIFICATE
THIS CLASS B CERTIFICATE IS SUBORDINATE TO THE PRIOR RIGHTS OF THE CLASS A
CERTIFICATES IN ACCORDANCE WITH THE POOLING AND SERVICING AGREEMENT REFERRED TO
BELOW.
[THIS CLASS B CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF THIS CLASS B
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN THE
AGREEMENT UNDER WHICH THIS CLASS B CERTIFICATE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE TRUSTEE OF
AN INVESTMENT LETTER IN WHICH THE TRANSFEREE SHALL MAKE CERTAIN
REPRESENTATIONS.]
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
OR ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") OR ANY
PERSON INVESTING THE ASSETS OF A PLAN EXCEPT AS PROVIDED IN THE AGREEMENT
REFERRED TO HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS B CERTIFICATE
WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS B CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
PREMIER AUTO TRUST 199_-_
____% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and the
Amortizing Payments on the Fixed Value Receivables (each, as defined herein)
secured by new and used automobiles and light duty trucks.
(This Class B Certificate does not represent an interest in or obligation of
Chrysler Financial Corporation, Chrysler Credit Corporation or any of their
respective affiliates, except to the extent described below.)
B-1
<PAGE> 113
THIS CERTIFIES THAT ____________________________________ is the
registered owner of ____________________________ DOLLARS nonassessable,
fully-paid, fractional undivided interest in Premier Auto Trust 199_-_ (the
"Trust") formed pursuant to a Pooling and Servicing Agreement (the "Agreement")
dated as of _________________, among Chrysler Financial Corporation, a Michigan
corporation, as seller (the "Seller"), Chrysler Credit Corporation, a Delaware
corporation, as servicer (the "Servicer") and _____________, a _______________
banking association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement.
This Certificate is one of a duly authorized series of Certificates,
designated as the ____% Asset Backed Certificates, Class B (herein called the
"Class B Certificates") all, issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Seller, the Servicer, the Trustee and HolderS of
the Certificates. The Class B Certificates are subject to all terms of the
Agreement.
The property of the Trust includes a pool of retail installment sale
contracts for new and used automobiles and light duty trucks and the Amortizing
Payments on the Fixed Value Receivables (collectively, the "Receivables"), all
monies due under such Receivables on or after ___________________, in the case
of Precomputed Receivables, or received on or after __________________, in the
case of Simple Interest Receivables, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and all proceeds of the foregoing. The
term "Fixed Value Receivables" shall mean retail sale contracts secured by new
automobiles or light duty trucks with a series of fixed level payment monthly
installments (the "Amortizing Payments") and a final fixed value payment that
is greater than each Amortizing Payment.
Under the Agreement, there will be distributed on the ________ day of
each month or, if such _______ day is not a Business Day, the next Business Day
(each, a "Distribution Date"), commencing on ______________________, to the
Person in whose name this Class B Certificate is registered at the close of
business on the first day of the month in which such Distribution Date occurs
(the "Record Date"), subject to the prior rights of the Class A
Certificateholders, such Certificateholder's fractional undivided interest in
the amount to be distributed to Class B Certificateholders on such Distribution
Date.
It is the intent of the Seller, the Servicer, the Trustee and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated
as a grantor trust and the
B-2
<PAGE> 114
Certificates will be treated as interests in a grantor trust. The Seller, the
Servicer, the Trustee and the Certificateholders, by acceptance of a
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as interests in a grantor
trust.
Distributions on this Class B Certificate will be made as provided in
the Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making of any
notation hereon, except that with respect to Class B Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Class B Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency maintained for
that purpose by the Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class B Certificate shall not entitle the Holder hereof to any benefit under
the Agreement or be valid for any purpose.
B-3
<PAGE> 115
THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
PREMIER AUTO TRUST 199_-_
by: ______________________________,
not in its individual capacity
but solely as Trustee
Date: by: _______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Trust Agreement.
Date: __________________________________,
as Trustee
by: _______________________________
Authorized Signatory
B-4
<PAGE> 116
(REVERSE OF CLASS B CERTIFICATE)
The Class B Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliates of any of
them, and no recourse may be had against such parties or their assets except as
expressly set forth or contemplated herein or in the Agreement. In addition,
this Class B Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Agreement. A copy of the
Agreement may be examined by any Certificateholder upon written request during
normal business hours at the principal office of the Seller and at such other
places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee
with the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance. Any such consent by the Holder of this
Class B Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Class B Certificate and of any Class B Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent is made upon this Class B Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
[No transfer of this Class B Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act and
any applicable state securities laws or is made in accordance with said Act and
laws. In the event that the Holder hereof desires to make such a transfer, the
Holder and such Holder's transferee will be required to comply with certain
procedures set forth in the Agreement, including the delivery of certain
certificates and investment letters. The Holder hereof, by acceptance of this
Certificate, does hereby agree to indemnify the Trustee, the Seller, the
Servicer and the Certificate Registrar against any liability that may result if
any such transfer is not so exempt or is not made in accordance with federal
and state laws. In connection with any such transfer, the Trustee will also
require (i) a representation letter, in the form described in the Agreement,
stating that the transferee is not a Plan and is not acting on behalf of a Plan
or using the assets of a Plan to effect such purchase or (ii) if such
transferee is a Plan, an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depository with respect to
certain matters described in the Agreement.]
B-5
<PAGE> 117
Except as provided in the Agreement, the Class B Certificates are
issuable only as registered certificates without coupons in a minimum
denominations of $________. As provided in the Agreement and subject to
certain limitations therein set forth, Class B Certificates are exchangeable
for new Class B Certificates of authorized denominations evidencing the same
aggregate denomination, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and none of the
Trustee, the Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property by the Trust. The Servicer of the Receivables may
at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Class B Certificates; however, such right
of purchase is exercisable only as of the last day of any Collection Period as
of which the Pool Balance is less than or equal to 10% of the Original Pool
Balance.
B-6
<PAGE> 118
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Class B Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing __________________________ to transfer said
Class B Certificate on the books of the Certificate Registrar, with full power
of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_______________________
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Class B Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
B-7
<PAGE> 119
EXHIBIT C
(FORM OF DEPOSITORY AGREEMENT)
Letter of Representations
(To be Completed by Issuer and Trustee)
_____________________________________________________________
(Name of Issuer)
_____________________________________________________________
(Name of Trustee)
___________________
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ____________________________________________________________
___________________________________________________________________
___________________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee
will act as trustee with respect to the Securities pursuant to a trust
indenture dated __, 199_ (the "Document"). _________________________________
(the "Underwriter") is distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
I. Prior to closing on the Securities on __________________,
199_, there shall be deposited with DTC one Security certificate registered in
the name of DTC's nominee, Cede & Co., for each stated maturity of the
Securities in the face amounts set forth on Schedule A hereto, the total of
which
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<PAGE> 120
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $150 million, one
certificate will be issued with respect to each $150 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each $150 million certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
II. In the event of any solicitation of consents from or voting
by holders of the Securities, Issuer or Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
III. In the event of a full or partial redemption, Issuer or
Trustee shall send a notice to DTC specifying: (a) the amount of the redemption
or refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party
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<PAGE> 121
sending the notice does not receive a telecopy receipt from DTC confirming that
the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
IV. In the event of an invitation to tender the Securities,
notice by Issuer or Trustee to Security holders specifying the terms of the
tender and the Publication Date of such notice shall be sent to DTC by a secure
means in the manner set forth in the preceding Paragraph. Notices to DTC
pursuant to this Paragraph and notices of other corporate actions (including
mandatory tenders, exchanges, and capital changes) by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
V. All notices and payment advices sent to DTC shall contain
the CUSIP number of the Securities.
VI. Trustee shall send DTC written notice with respect to the
dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor and Trustee contact's name and
telephone number, shall be sent by telecopy to DTC's Dividend Department at
(212) 709-1723, or if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
VII. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND
CROSS OUT THE OTHER:) (The interest accrual period is record date to record
date.) (The interest accrual period is payment date to payment date.)
VIII. Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by
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<PAGE> 122
Cede & Co., as nominee of DTC, or its registered assigns in same-day funds on
each payment date (or the equivalent in accordance with existing arrangements
between Issuer or Trustee and DTC). Such payments shall be made payable to the
order of Cede & Co. Absent any other existing arrangements, such payments
shall be addressed as follows:
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square; 24th Floor
New York, NY 10004-2695
IX. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND
CROSS OUT THE OTHER:)
Securities Eligible for DTC's Same-Day Funds Settlement ("SDFS")
System. Other principal payments (redemption payments) shall be made in
same-day funds by Trustee in the manner set forth in the SDFS Paying Agent
Operating Procedures, a copy of which previously has been furnished to Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement ("NDFS")
System. Other principal payments (redemption payments) shall be made in
next-day funds by Trustee to Cede & Co., as nominee of DTC, or its registered
assigns, on each payment date. Such payments shall be made payable to the
order of Cede & Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
X. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
XI. In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
C-4
<PAGE> 123
XII. In the event that Issuer determines that beneficial owners
of Securities shall be able to obtain certificated Securities, Issuer or
Trustee shall notify DTC of the availability of certificates. In such event,
Issuer or Trustee shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
XIII. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
XIV. Issuer: (a) understands that DTC has no obligation to, and
will not, communicate to its Participants or to any person having an interest
in the Securities any information contained in the Security certificate(s); and
(b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions of
the Security certificates by virtue of submission of such certificate(s) to
DTC.
XV. Nothing herein shall be deemed to require Trustee to
advance funds on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as defined
in this Letter of Representations), ____________________________________
Trustee as well as Issuer must sign (Issuer)
this Letter. If there is no Trustee,
in signing this Letter Issuer itself
undertakes to perform all of the By: ________________________________
obligations set forth herein. (Authorized Officer's Signature)
B. Schedule B contains statements that
DTC believes accurately describe DTC, ____________________________________
the method of effecting book-entry (Trustee)
transfers of securities distributed
through DTC, and certain related matters. By: ________________________________
(Authorized Officer's Signature)
CHRYSLER CREDIT CORPORATION
(Administrator)
By: ________________________________
(Authorized Officer's Signature)
C-5
<PAGE> 124
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ___________________________
cc: Underwriter
Underwriter's Counsel
C-6
<PAGE> 125
SCHEDULE A
(Describe Issue)
<TABLE>
<CAPTION>
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
<S> <C> <C> <C>
</TABLE>
C-7
<PAGE> 126
EXHIBIT D
FORM OF ACCOUNTANTS' LETTER
(Date)
Board of Directors
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
(Trustee)
(Trustee Address)
Ladies and Gentlemen:
This letter is delivered exclusively for your information with respect
to and in connection with the sale of certain motor vehicle retail installment
sale contracts by Chrysler Financial Corporation ("CFC") to Premier Auto Trust
199___-___ (the "Trust"), pursuant to Section 3.02(c) of the Pooling and
Servicing Agreement dated as of __________________, 194___ (the "Pooling and
Servicing Agreement") among the ___________________, as trustee, CFC and
Chrysler Credit Corporation ("CCC"), as servicer. Capitalized terms used
herein and not otherwise defined have the meaning ascribed thereto in the
Pooling and Servicing Agreement or the Prospectus Supplement dated
____________________ to the Prospectus dated _______________________
(collectively, the "Prospectus") relating to the offering of the Premier Auto
Trust 199___-___ [describe securities]. In connection therewith, we are
independent certified public accountants with respect to CFC and consolidated
subsidiaries, within the meaning of the Securities Act of 1933, as amended, and
all applicable published rules and regulations thereunder and we have performed
certain agreed-upon procedures, as specified in Items 1. through 3. below:
1. We have compared the following amounts and/or
percentages contained in the Prospectus Supplement to analyses prepared by CFC,
and found them to be in agreement.
<TABLE>
<CAPTION>
Page Description
---- -----------
<S> <C>
</TABLE>
D-1
<PAGE> 127
2. We have compared the following amounts and/or
percentages contained in the Prospectus Supplement to analyses prepared by
Chrysler Corporation ("Chrysler"), and found them to be in agreement.
<TABLE>
<CAPTION>
Page Description
---- -----------
<S> <C>
</TABLE>
3. The foregoing procedures do not constitute an audit
conducted in accordance with generally accepted auditing standards. Therefore,
we are unable to and do not express any opinion on any of the procedures
performed on individual balances or accounts or summaries of selected
transactions specifically set forth in this letter. Also, these procedures
would not necessarily reveal matters of significance with respect to the
findings described herein. Accordingly, we make no representations regarding
the sufficiency of the foregoing procedures for your purposes.
4. It should be understood that we make no representations
regarding questions of legal interpretation or regarding the sufficiency for
your purposes of the procedures enumerated in the preceding paragraphs; also,
such procedures would not necessarily reveal any material misstatement of the
amounts or percentages listed above. Further, we have addressed ourselves
solely to the foregoing data as set forth in the Note Underwriting Agreement
and the Certificate Underwriting Agreement, both dated ______________________
(collectively, the "Agreements"), pursuant to which the underwriters initially
purchased the Notes and Certificates, the Pooling and Servicing Agreement and
the Prospectus, and make no representations regarding the adequacy of
disclosure or whether any material facts have been omitted.
5. These procedures should not be taken to supplant any
additional inquiries or procedures that you would undertake in your
consideration of the proposed transaction.
6. In reaching the findings above, we have assumed that no
information has come to your attention which, if disclosed to us, could have
materially affected our findings.
7. This letter is solely for the information of the
addressees and to assist the underwriters in conducting and documenting their
investigation of the affairs of CFC in connection with the offering of the
securities covered by the Prospectus, and is not to be used, circulated, quoted
or otherwise referred to for any other purpose including but not limited to the
purchase or sale of the securities, nor is it to be referred to in whole or in
part
D-2
<PAGE> 128
in the Registration Statement or any other document, except that reference may
be made to it in the Agreements or in any list of closing documents pertaining
to the offering of the securities covered by the Prospectus.
8. We have no responsibility to update this letter for
events and circumstances occurring after each applicable Cutoff Date.
Yours truly,
D-3
<PAGE> 129
EXHIBIT E
FORM OF SERVICER'S CERTIFICATE
PREMIER AUTO RECEIVABLES TRUST 199__-__
___% Asset Backed Certificates, Class A
___% Asset Backed Certificates, Class B
Distribution Date:
Collection Period:
Under the Pooling and Servicing Agreement dated as of
_____________ by and among Chrysler Financial Corporation, as Seller, Chrysler
Credit Corporation, as Servicer, and __________________________, as Trustee,
the Servicer is required to prepare certain information each month regarding
current distributions to Certificateholders and the performance of the Trust
during the previous month. The information that is required to be prepared
with respect to the Distribution Date and Collection Period listed above is set
forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Class A Certificate or Class B
Certificate, as appropriate, and certain other information is presented based
upon the aggregate amounts for the Trust as a whole.
A. Information Regarding the Current Monthly Distribution.
<TABLE>
<S> <C> <C>
1. Class A Certificates.
(a) The aggregate amount of the distribution
to Class A Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of interest . . . . . . . . . . . . . . . . . . . . $
----------
(c) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of principal . . . . . . . . . . . . . . . . . . . $
----------
(d) The amount of the distribution set forth in
paragraph A.1.(a) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . $
----------
(e) The amount of the distribution set forth in
paragraph A.1.(b) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . $
----------
(f) The amount of the distribution set forth in
paragraph A.1.(c) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . $
----------
</TABLE>
E-1
<PAGE> 130
<TABLE>
<S> <C> <C>
2. Class B Certificates.
(a) The aggregate amount of the distribution
to Class B Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The amount of the distribution set forth in
paragraph A.2(a) above in respect of interest . . . . . . . . . . . . . . . . . . . . $
----------
(c) The amount of the distribution set forth in
paragraph A.2(a) above in respect of principal . . . . . . . . . . . . . . . . . . . . $
----------
(d) The amount of the distribution set forth in
paragraph A.2(a) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . . $
----------
(e) The amount of the distribution set forth in
paragraph A.2(b) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . . $
----------
(f) The amount of the distribution set forth in
paragraph A.2(c) above per $1,000 interest . . . . . . . . . . . . . . . . . . . . . . $
----------
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Certificate Balances.
(a) The Pool Balance close of business on the last
day of the preceding Collection Period . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The Class A Certificate Balance as of the
close of business on the last day of the
preceding Collection Period, after giving
effect to payments allocated to principal
set forth in Paragraph A.1(c) above . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(c) The Class B Certificate Balance as of the
close of business of the last day of the
preceding Collection Period, after giving
effect to payments allocated to principal
set forth in paragraph A.2(c) above . . . . . . . . . . . . . . . . . . . . . . . . .
----------
(d) The Class A Pool Factor and the
Class B Pool Factor as of the close
of business on the last day of the
preceding Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
2. Servicing Fee and Advances.
(a) The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The amount of such Servicing Fee per
$1,000 interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
</TABLE>
E-2
<PAGE> 131
<TABLE>
<S> <C> <C>
(c) The amount of any unpaid Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(d) The change in the amount of any unpaid
Servicing Fee from the previous
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(e) Aggregate Advances on such
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
3. Payment Shortfalls.
(a) The amount of the Class A Interest Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.1(b) above . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The amount of the Class A Principal Carryover
Shortfall after giving effect to the payment
set forth in paragraph A.1(c) above . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(c) The amount of the Class B Interest Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.2(b) above . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(d) The amount of the Class B Principal Carryover
Shortfall after giving effect to the payments
set forth in paragraph A.2(c) above . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(e) The amount otherwise distributable to
Class B Certificateholders that is distributed
to Class A Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
4. Payahead Account.
(a) The aggregate Payahead Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The change in the Payahead Balance from
the previous Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
5. Reserve Account.
(a) The Reserve Account balance after
giving effect to distributions made on
such Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
(b) The change in the Reserve Account
on such Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
</TABLE>
E-3
<PAGE> 132
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
(DATE)
(Seller)
(Seller Address)
(Trustee)
(Trustee Address)
Re: Premier Auto Trust 199__-__
Asset Backed Certificates, Class B
Ladies and Gentlemen:
In connection with our disposition of the above-referenced ______%
Asset Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being transferred by us in a
transaction that is exempt from the registration requirements of the Act and
(b) we have not offered or sold any Certificates to, or solicited offers to buy
any Certificates from, any person, or otherwise approached or negotiated with
any person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
(NAME OF TRANSFEROR)
By: ______________________________
Authorized Officer
F-1
<PAGE> 133
EXHIBIT G
FORM OF INVESTMENT LETTER
(DATE)
(Seller)
(Seller Address)
(Trustee)
(Trustee Address)
Re: Premier Auto Trust 199__-__
Asset Backed Certificates, Class B
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset
Backed Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Certificates, (c) we have had the
opportunity to ask questions of and receive answers from the seller concerning
the purchase of the Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan or trust account that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
section 4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of any such Plan or using the assets of any such Plan to
acquire Class B Certificates, (e) we are acquiring the Certificates for
investment for our own account and not with a view to any distribution of such
Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below), (f)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action that would result in a
violation of Section 5 of the Act or any state securities laws and (g) we will
not sell, transfer or otherwise dispose of any Certificates unless (1) such
sale, transfer or other disposition is made pursuant to an effective
registration statement under the Act and in compliance with any relevant state
securities laws or is exempt from such registration requirements and, if
requested, we will at our expense provide an
G-1
<PAGE> 134
opinion of counsel satisfactory to the addressees of this certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Note has executed and
delivered to you a certificate to substantially the same effect as this
certificate and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement dated
as of __________________, among Chrysler Financial Corporation, Chrysler Credit
Corporation and ______________________.
Very truly yours,
(NAME OF TRANSFEREE)
By: ____________________________________
Authorized Officer
G-2
<PAGE> 135
EXHIBIT H
FORM OF RULE 144A LETTER
(DATE)
(Seller)
(Seller Address)
(Trustee)
(Trustee Address)
Re: Premier Auto Trust 199__-__
Asset Backed Certificates, Class B
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced _____%
Asset Backed Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Certificates, (c) we have had the
opportunity to ask questions of and receive answers from the seller concerning
the purchase of the Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan, trust or account that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
section 4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of any such Plan or using the assets of any such Plan to
acquire Class B Certificates, (e) we have not, nor has anyone acting on our
behalf, offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action that
would constitute a distribution of the Certificates under the Act or that would
render the disposition of the Certificates a violation of Section 5 of the Act
or any state securities laws or require registration pursuant thereto, and we
will not act, or authorize any person to act, in such manner with
H-1
<PAGE> 136
respect to the Certificates, and (f) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act. We are aware that the sale
to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
understand that such Certificates may be resold, pledged or transferred only
(i) to a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A or (ii) pursuant to another exemption from
registration under the Act.
Very truly yours,
(NAME OF TRANSFEREE)
By: ______________________________
Authorized Officer
H-2
<PAGE> 137
EXHIBIT J
SUBSEQUENT TRANSFER ASSIGNMENT NO. ___
For value received, in accordance with and subject to the Pooling and
Servicing Agreement dated as of ___________, 199_ (the "Agreement"), among
Chrysler Financial Corporation, a Michigan corporation (the "Seller"), Chrysler
Credit Corporation, a Delaware corporation (the "Servicer"), and
_________________, a ______________ (the "Trustee"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Trustee, for the benefit
of the Certificateholders, without recourse (except as expressly provided in
the Agreement), all right, title and interest of the Seller in and to (i) the
Subsequent Receivables, having an aggregate Principal Balance equal to $
, set forth on Schedule A hereto (which shall supplement Schedule A to the
Agreement) and all monies due thereon on or after the date hereof (the
"Subsequent Cutoff Date"), in the case of Precomputed Receivables, and all
monies received thereon on and after the Subsequent Cutoff Date, in the case of
Simple Interest Receivables; (ii) the security interests in the Financed
Vehicles granted by the Obligors pursuant to such Subsequent Receivable and any
other interest of the Seller in such Financed Vehicles; (iii) any proceeds with
respect to such Subsequent Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed Vehicles or
Obligors; (iv) any proceeds with respect to such Subsequent Receivables from
recourse to Dealers thereon with respect to which the Servicer has determined
in accordance with its customary servicing procedures that eventual payment in
full is unlikely; (v) any Financed Vehicle that shall have secured any such
Subsequent Receivable and that shall have been acquired by or on behalf of the
Seller, the Servicer or the Trust; and (vi) the proceeds of any and all of the
foregoing. The foregoing sale does not constitute and is not intended to
result in any assumption by the Trust of any obligation of the Seller to the
Obligors, insurers or any other person in connection with the Standard
Receivables, Fixed Value Receivables, Receivable Files, any insurance policies
or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Agreement
(including the Officers' Certificate of the Seller accompanying this
Assignment, in the form of Annex A hereto) and is to be governed in all
respects by the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of , 199_.
J-1
<PAGE> 138
CHRYSLER FINANCIAL CORPORATION
By: ______________________________
Name:
Title:
J-2
<PAGE> 139
SCHEDULE A TO
Subsequent Transfer Assignment
Schedule of Subsequent Receivables
J-3
<PAGE> 140
ANNEX A TO
Subsequent Transfer Assignment
CHRYSLER FINANCIAL CORPORATION
OFFICERS' CERTIFICATE
The undersigned, _______________ and ________________, the duly
qualified and elected ______________ and ________________ of Chrysler Financial
Corporation (the "Seller"), in connection with the conveyance of Subsequent
Receivables to Premier Auto Trust 199__-__ (the "Trust") pursuant to Section
3.02(b) of the Pooling and Servicing Agreement dated as of ______________,
199__, (the "Agreement"), among the Seller, ____________________, as trustee,
and Chrysler Credit Corporation, as servicer, and Subsequent Transfer
Assignment No. ___ dated as of the date hereof from the Seller, hereby certify
that:
(a) ______% of the Principal Balances of the Receivables in the
Trust on the date hereof (including the Subsequent Receivables
conveyed to the Trust on the date hereof) represent vehicles financed
at CCC's used vehicle rate.
(b) The weighted average APR of the Receivables in the Trust on
the date hereof (including the Subsequent Receivables conveyed to the
Trust on the date hereof) is _____%.
(c) The weighted average remaining term of the Subsequent
Receivables in the Trust on the date hereof (including the Subsequent
Receivables conveyed to the Trust on the date hereof) is ____________
months.
(d) All other conditions precedent set forth in Section
3.02(b)(1) of the Agreement relating to the conveyance of Subsequent
Receivables to the Trust have been satisfied.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ____ day of
_____________, 199_.
_____________________________________
Name:
Title:
J-4
<PAGE> 141
________________________________________
Name:
Title:
J-5
<PAGE> 142
EXHIBIT K
ELIGIBLE INVESTMENT TRANSFER ASSIGNMENT NO. ____
For value received, in accordance with and subject to the Pooling and
Servicing Agreement dated as of __________________, 199__ (the "Agreement"),
among Chrysler Financial Corporation, a Michigan corporation (the "Seller"),
Chrysler Credit Corporation, a Delaware corporation (the "Servicer"), and
______________, as trustee, the Seller does hereby sell, assign, transfer and
otherwise convey unto the Issuer, without recourse (except as expressly
provided in the Agreement), all right, title and interest of the Seller in and
to (i) the Eligible Investment Receivables, having an aggregate Principal
Balance equal to $_________________, set forth on Schedule A hereto (which
shall supplement Schedule C to the Agreement) and all monies due thereon on or
after the date hereof (the "Subsequent Cutoff Date"), in the case of
Precomputed Receivables, and all monies received thereon on and after the
Subsequent Cutoff Date, in the case of Simple Interest Receivables; (ii) the
security interests in the Financed Vehicles granted by the Obligors pursuant to
such Eligible Investment Receivables and any other interest of the Seller in
such Financed Vehicles, (iii) any proceeds with respect to such Eligible
Investment Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors; (iv) any
proceeds with respect to such Eligible Investment Receivables from recourse to
Dealers thereon with respect to which the Servicer has determined in accordance
with its customary servicing procedures that eventual payment in full is
unlikely, (v) any Financed Vehicle that shall have secured any such Eligible
Investment Receivable and that shall have been acquired by or on behalf of the
Seller, the Servicer or the Trust, and (vi) the proceeds of any and all of the
foregoing. The foregoing sale does not constitute and is not intended to
result in any assumption by the Trust of any obligation of the Seller to the
Obligors, insurers or any other person in connection with the Eligible
Investment Standard Receivables, Eligible Investment Fixed Value Receivables,
Receivable File, any insurance policies or any agreement or instrument relating
to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Agreement
(including the Officers' Certificate of the Seller accompanying this
Assignment, in the form of Annex A hereto) and is to be governed in all
respects by the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of __________________, 199_.
K-1
<PAGE> 143
CHRYSLER FINANCIAL CORPORATION
By: ______________________________
Name:
Title:
K-2
<PAGE> 144
SCHEDULE A TO
Eligible Investment Transfer Assignment
Schedule of Eligible Investment Receivables
K-3
<PAGE> 145
ANNEX A TO
Eligible Investment Transfer Assignment
CHRYSLER FINANCIAL CORPORATION
OFFICER'S CERTIFICATE
The undersigned _________________________ and
__________________________, the duly qualified and elected
______________________________ and ___________________________ of Chrysler
Financial Corporation (the "Seller'), in connection with the conveyance of
Eligible Investment Receivables to Premier Auto Trust 199__-__ (the "Trust")
pursuant to Section 12.03 of the Pooling and Servicing Agreement dated as of
___________________, 199___ (the "Agreement"), among the Seller,
______________________, as trustee, and Chrysler Credit Corporation, as
servicer, and Eligible Investment Transfer Assignment No. ___, dated as of the
date hereof from the Seller, hereby certify that:
(a) ____% of the Principal Balances of the Eligible Investment
Receivables in the Reserve Account on the date hereof (including the
Eligible Investment Receivables conveyed to the Reserve Account on the
date hereof) represent vehicles financed at CCC's used vehicle rate.
(b) All other conditions precedent set forth in Section 12.03
of the Agreement relating to the conveyance of Eligible Investment
Receivables to the Reserve Account have been satisfied.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ____ day of
__________, 199_.
________________________________________
Name:
Title:
________________________________________
Name:
Title:
K-4
<PAGE> 146
EXHIBIT L
================================================================================
AGENCY AGREEMENT
Chrysler Financial Corporation,
and
(____________________________________)
as Trustee of
Premier Auto Trust 199_-_
and
Chrysler Credit Corporation,
Servicer
and
(___________________________________)
Agent
Dated as of __________, 19__
================================================================================
L-1
<PAGE> 147
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-5
ARTICLE II
SECTION 2.01. Appointment and Obligations of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-5
ARTICLE III
SECTION 3.01. Conveyance of Initial Fixed Value Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-6
SECTION 3.02. Conveyance of Subsequent Fixed Value Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . L-6
SECTION 3.03. Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-10
ARTICLE IV
SECTION 4.01. Custody of Fixed Value Receivable Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-10
SECTION 4.02. Duties of Servicer as Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-10
SECTION 4.03. Instructions; Authority to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-11
SECTION 4.04. Custodian's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-11
SECTION 4.05. Effective Period and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-11
ARTICLE V
SECTION 5.01. Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-12
SECTION 5.02. Representations and Warranties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-12
SECTION 5.03. Indemnities of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-12
ARTICLE VI
SECTION 6.01. Allocation of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-13
ARTICLE VII
SECTION 7.01. Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-13
SECTION 7.02. Agent's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-14
SECTION 7.03. Agent's Assignment of Purchased Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-14
SECTION 7.04. Certain Matters Affecting Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-15
SECTION 7.05. Agent Not Liable for Fixed Value Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-15
SECTION 7.06. Agent May Own Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-16
SECTION 7.07. Agent's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-16
SECTION 7.08. Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-17
SECTION 7.09. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-17
SECTION 7.10. Merger or Consolidation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-17
SECTION 7.11. Representations and Warranties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-18
SECTION 7.12. No Bankruptcy Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-18
ARTICLE VIII
</TABLE>
L-2
<PAGE> 148
<TABLE>
<S> <C> <C>
SECTION 8.01. Chrysler Credit Corporation Not to Resign as Servicer . . . . . . . . . . . . . . . . . . . . . . . L-18
ARTICLE IX
SECTION 9.01. Liability of Seller; Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-19
ARTICLE X
SECTION 10.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-19
SECTION 10.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-19
SECTION 10.03. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-20
SECTION 10.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-20
SECTION 10.05. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-20
Schedule A Schedule of Fixed Value Receivables
Schedule B Location of Fixed Value Receivable Files
Exhibit L-1 Form of Agent's Certificate - Assignment of Purchased Receivables to Seller
Exhibit L-2 Form of Agent's Certificate - Assignment of Purchased Receivables to Servicer
</TABLE>
L-3
<PAGE> 149
This Agency Agreement, dated as of _____________________ , by and
among Premier Auto Trust 199___-___ (the "Trust"), Chrysler Finance
Corporation, a Michigan corporation ("CFC"), Chrysler Credit Corporation, as
Servicer (the "Servicer"), and ______________________, a _________________
banking corporation, as agent on behalf of the Trust and CFC (the "Agent"),
WITNESSETH THAT, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE XVI
SECTION 1.01. Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to them in the
Pooling and Servicing Agreement (including the Standard Terms and Conditions of
Agreement incorporated by reference therein), dated as of _____________________
(the "Pooling and Servicing Agreement"), by and among CFC, the Servicer and ___
_______________________, as Trustee. Whenever used herein, the following words
and phrases shall have the following meanings:
"Agent Officer" means the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive committee of the
board of directors, the president, any vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Agent customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Agent's Certificate" means a certificate completed and executed by an
Agent Officer on behalf of the Agent pursuant to Section 7.02, substantially in
the form of Exhibit L-1, in the case of an assignment to the Seller, and
Exhibit L-2, in the case of an assignment to the Servicer.
"Fixed Value Receivable Files" means the documents specified in
Section 4.01.
ARTICLE XVII
SECTION 2.01. Appointment and Obligations of the Agent. (a) The
Trust and CFC hereby appoint _______________________, and ___________________
hereby accepts such appointment, as the Agent for the purposes of (a) holding
the right, title and interest of the Trust and CFC in the Fixed Value
Receivables listed in
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Schedule A hereto and the security interests in the Financed Vehicles granted
by Obligors pursuant to such Fixed Value Receivables and (b) holding the right
to receive the Amortizing Payments on behalf of the Trust and the right to
receive the Fixed Value Payments on behalf of CFC, including any proceeds from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors.
(b) Except as expressly provided herein, the Agent shall accept only
the instructions of the Trustee concerning the Fixed Value Receivables, which
instructions may include, but are not limited to, releasing any interest in
such Fixed Value Receivables.
(c) The Agent is acting solely as agent of the Trust and CFC and
shall furnish only those services that are expressly described herein or any
other ministerial service or action that is reasonably requested by the Trustee
in order to accomplish those purposes pursuant to this Agreement.
ARTICLE XVIII
SECTION 3.01. Conveyance of Initial Fixed Value Receivables. In
consideration of the Trustee's delivery to or upon the order of the Seller of
Certificates in an aggregate principal amount equal to the initial aggregate
principal amount of the Fixed Value Receivables, the Seller does hereby sell,
transfer, assign and otherwise convey to the Agent for the benefit of the Trust
and CFC, without recourse, all right, title and interest of the Seller in and
to:
(a) the Fixed Value Receivables listed on Schedule A hereto
(as such Schedule shall be supplemented on each Subsequent Transfer
Date on which Subsequent Fixed Value Receivables are conveyed to the
Agent) and all monies due thereon on or after the related Cutoff Date
in the case of Precomputed Receivables and all monies received
thereon, on and after the related Cutoff Date in the case of Simple
Interest Receivables;
(b) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Fixed Value Receivables;
(c) any proceeds from claims on any physical damage, credit
life or disability insurance policies covering Financed Vehicles or
Obligors with respect to the Fixed Value Receivables;
(d) any proceeds from recourse to Dealers on Fixed Value
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual
payment in full is unlikely; and
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(e) the proceeds of any and all of the foregoing.
SECTION 3.02. Conveyance of Subsequent Fixed Value Receivables. (a)
Subject to the conditions set forth in paragraph (b) below, in consideration of
the Trustee's delivery on the related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 14.08(a) of the Pooling
and Servicing Agreement, the Seller does hereby sell, transfer, assign, set
over and otherwise convey to the Agent, for the benefit of the Trust and CFC,
without recourse (subject to the obligations set forth herein), all right,
title and interest of the Seller in and to:
(i) the Subsequent Fixed Value Receivables listed on
Schedule A to the related Subsequent Transfer Assignment, and all
moneys due thereon on or after the related Subsequent Cutoff Date in
the case of Precomputed Receivables, and all moneys received thereon
on and after the related Subsequent Cutoff Date in the case of Simple
Interest Receivables;
(ii) the security interests in the Financed Vehicles granted
by Obligors pursuant to such Subsequent Fixed Value Receivables and
any other interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent Fixed
Value Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(iv) any proceeds from recourse to Dealers with respect to
Subsequent Fixed Value Receivables in respect of which the Servicer
has determined in accordance with its customary servicing procedures
that eventual payment in full is unlikely;
(v) any Financed Vehicle that shall have secured any such
Subsequent Fixed Value Receivable and shall have been acquired by or
on behalf of the Seller, the Servicer or the Trust; and
(vi) the proceeds of any and all of the foregoing.
(b) (i) The Seller shall transfer to the Agent, for the benefit
of the Trust and CFC, the Subsequent Fixed Value Receivables and the
other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions
precedent on or prior to the related Subsequent Transfer Date:
(A) the Seller shall have delivered to the
Trustee and the Agent a duly executed Subsequent Transfer
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Assignment, which shall include supplements to Schedule A hereto
listing the Subsequent Fixed Value Receivables;
(B) the Seller shall have deposited in the
Collection Account, to the extent set forth in Section 14.02 of
the Pooling and Servicing Agreement, all collections in respect
of the Subsequent Fixed Value Receivables;
(C) as of each Subsequent Transfer Date, (A) the
Seller shall not be insolvent and shall not become insolvent as
a result of the transfer of Subsequent Receivables on such
Subsequent Transfer Date, (B) the Seller shall not intend to
incur or believe that it shall incur debts that would be beyond
its ability to pay as such debts mature, (C) such transfer shall
not have been made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Seller shall not
constitute unreasonably small capital to carry out its business
as conducted;
(D) the applicable Reserve Account Initial
Deposit with respect to the Subsequent Fixed Value Receivables
transferred to the Agent on such Subsequent Transfer Date shall
have been made in the amount set forth in Section 14.08(a) of
the Pooling and Servicing Agreement;
(E) the Funding Period shall not have terminated;
(F) the Receivables, including any Subsequent
Standard Receivables to be conveyed to the Trust and any
Subsequent Fixed Value Receivables to be conveyed to the Agent
on such Subsequent Transfer Date, shall, collectively, meet the
following criteria (based on the characteristics of the Initial
Receivables on the Initial Cutoff Date and the Subsequent
Receivables on the related Subsequent Cutoff Dates): (A) not
more than ___% of the aggregate Principal Balances of the
Receivables transferred to the Trustee and/or the Agent, as
applicable, shall represent vehicles financed at CCC's used
vehicle rates; and (B) the weighted average APR of the
Receivables transferred to the Trustee and/or the Agent, as
applicable, shall not be less than ___%, unless, with the prior
consent of the Rating Agencies, CFC increases the Reserve
Account Initial Deposit by the Additional Amount solely relating
thereto; and the weighted average remaining term of the
Receivables transferred to the Trustee and/or the Agent, as
applicable, including the Subsequent Receivables to be conveyed
to the Trustee and/or the Agent, as applicable, on such
Subsequent Transfer Date, shall not be greater than __ months;
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(G) each of the representations and warranties
made by the Seller pursuant to Section 12.01 of the Pooling and
Servicing Agreement shall be true and correct with respect to
the Subsequent Fixed Value Receivables as of the related
Subsequent Transfer Date, and the Seller shall have performed
all obligations to be performed by it hereunder and under the
Pooling and Servicing Agreement on or prior to such Subsequent
Transfer Date;
(H) the Seller shall, at its own expense, on or
prior to the Subsequent Transfer Date indicate in its computer
files that the Subsequent Fixed Value Receivables identified in
the Subsequent Transfer Assignment have been sold to the Agent
pursuant to this Agreement and the Subsequent Transfer
Assignment;
(I) the Seller shall have taken any action
required to maintain the first perfected ownership interest of
the Trustee in the Trust property and of the Agent in the Fixed
Value Receivables;
(J) no selection procedures believed by the
Seller to be adverse to the interests of the Certificateholders
shall have been utilized in selecting any Subsequent Standard
Receivables or Subsequent Fixed Value Receivables;
(K) the conveyance of any such Subsequent
Standard Receivables to the Trust and Subsequent Fixed Value
Receivables to the Agent shall not result in a material adverse
tax consequence to the Trust, the Agent or the
Certificateholders; and
(L) the Seller shall have delivered to the
Trustee, in the case of Subsequent Fixed Value Receivables, or
to the Trustee and the Agent, in the case of Subsequent Fixed
Value Receivables, an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this
paragraph (b)(1).
(ii) In addition, any such conveyance of Subsequent Fixed
Value Receivables made on one or more Subsequent Transfer Dates
occurring during any Collection Period also will be subject to the
satisfaction, on or before the ____ day of the month following the end
of such Collection Period (or if such ____ day is not a Business Day,
then on the next succeeding Business Day), of the following conditions
subsequent:
(A) the Seller shall have delivered to the Agent
and the Rating Agencies a statement listing the aggregate
Principal Balance of the Subsequent Fixed Value Receivables so
transferred and any other information
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reasonably requested by any of the foregoing with respect to
such Subsequent Fixed Value Receivables;
(B) each of the Rating Agencies shall have
notified the Seller in writing that, following the transfer of
all of the Subsequent Standard Receivables to the Trustee and
the Standard Fixed Value Receivables to the Agent during the
related Collection period, the (Class A) Certificates continue
to be treated in the highest investment rating category by each
such Rating Agency;
(C) the Seller shall have delivered (A) to the
Rating Agencies an Opinion of Counsel with respect to the
transfer during the related Collection Period of Subsequent
Standard Receivables to the Trust and Subsequent Fixed Value
Receivables to the Agent, substantially in the form of the
Opinion of Counsel delivered to the Rating Agencies on the
Closing Date and (B) to the Agent an Opinion of Counsel covering
the matters described in Section 21.02(i)(1) of the Pooling and
Servicing Agreement;
(D) the Seller shall have delivered to the Agent
a letter of a firm of independent certified public accountants
confirming that the conditions set forth in Section
3.02(b)(1)(vi) were satisfied with respect to the Subsequent
Receivables, including the Subsequent Fixed Value Receivables,
conveyed on each Subsequent Transfer Date during the related
Collection Period, covering substantially the same matters with
respect to such Subsequent Receivables as are set forth on
Exhibit D to the Fixed Value Terms and Conditions of Agreement,
and, if any of such Subsequent Receivables are OMSC Receivables,
setting forth the aggregate Principal Balance thereof; and
(E) the Seller shall have delivered to the Agent
an Officers' Certificate confirming the satisfaction of each
condition specified in this paragraph (b)(2).
The Seller covenants that in the event any of the foregoing conditions
subsequent are not satisfied with respect to any Subsequent Fixed Value
Receivable on the date required as specified above, the Seller will immediately
repurchase such Subsequent Fixed Value Receivable from the Agent at a price
equal to the Purchase Amount thereof, in the manner specified in Section 14.05
of the Pooling and Servicing Agreement.
(c) The Seller covenants to transfer to the Trustee and/or the Agent
pursuant to paragraphs (a) and (b) above Subsequent Standard Receivables and
Standard Fixed Value Receivables, as applicable, having an aggregate Principal
Balance equal to $___________. In the event that the Seller shall fail to
deliver and sell to the
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Trustee or the Agent any or all of such Subsequent Receivables by the date on
which the Funding Period ends and the Pre-Funded Amount is greater than $____
on such date, the Seller shall be obligated to deposit an amount equal to the
Prepayment Premium into the Certificate Distribution Account on the
Distribution Date on which the Funding Period ends (or, if the Funding Period
does not end on a Distribution Date, on the first Distribution Date following
the end of the Funding Period); provided, however, that the foregoing shall be
the sole remedy of the Trustee, the Agent or the Certificateholders with
respect to a failure of the Seller to comply with this covenant.
SECTION 3.03. Representations and Warranties of Seller. The Seller
does hereby represent and warrant to the Agent that each of the Contracts
listed on Schedule A hereto, as such Schedule A shall be supplemented on any
Subsequent Transfer Date on which Subsequent Fixed Value Receivables are
transferred to the Agent, is a Fixed Value Receivable, and the Agent relies on
such representation and warranty in accepting the Fixed Value Receivables.
ARTICLE XIX
SECTION 4.01. Custody of Fixed Value Receivable Files. To assure
uniform quality in servicing the Receivables and to reduce administrative
costs, the Agent, upon the execution and delivery of this Agreement, hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Agent as custodian of the following
documents or instruments, which are hereby, or will hereby be, constructively
delivered to the Agent as of the Closing Date (in the case of Initial Fixed
Value Receivables) and the applicable Subsequent Transfer Date (in the case of
Subsequent Fixed Value Receivables) with respect to each Fixed Value
Receivable:
(a) the fully executed original of the Fixed Value
Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents
that the Servicer or the Seller shall keep on file, in accordance with
its customary procedures, evidencing the security interest of the
Seller in the Financed Vehicle; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Fixed Value Receivable, an Obligor or a
Financed Vehicle.
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SECTION 4.02. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Fixed Value Receivable Files on behalf of the Agent
for the use and benefit of the Trust and CFC, and shall maintain such accurate
and complete accounts, records and computer systems pertaining to each Fixed
Value Receivable File as shall enable the Agent to comply with this Agreement.
In performing its duties as custodian, the Servicer shall act with reasonable
care, using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic audits of the Fixed Value
Receivable Files held by it under this Agreement and of the related accounts,
records and computer systems, in such a manner as shall enable the Agent to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Agent any failure on its part to hold the Fixed Value
Receivable Files and maintain its accounts, records and computer systems as
herein provided and shall promptly take appropriate action to remedy any such
failure. Nothing herein shall be deemed to require an initial review or any
periodic review by the Agent of the Fixed Value Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Fixed Value Receivable File at one of its offices specified in
Schedule B to this Agreement, or at such other office as shall be specified to
the Agent by written notice not later than 90 days after any change in
location. The Servicer shall make available to the Agent or its duly
authorized representatives, attorneys or auditors a list of locations of the
Fixed Value Receivable Files and the related accounts, records and computer
systems maintained by the Servicer at such times as the Agent shall instruct.
(c) Release of Documents. Upon instruction from the Agent, the
Servicer shall release any Fixed Value Receivable File to the Agent, the
Agent's agent or the Agent's designee, as the case may be, at such place or
places as the Agent may designate, as soon as practicable.
SECTION 4.03. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Fixed Value
Receivable Files upon its receipt of written instructions signed by an Agent
Officer.
SECTION 4.04. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Agent for any and all liabilities, obligations, losses,
compensatory damages, payments, costs, or expenses of any kind whatsoever that
may be imposed on, incurred by or asserted against the Agent as the result of
any improper act or omission in any way relating to the maintenance and custody
by the Servicer as custodian of the Fixed Value Receivable Files;
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provided, however, that the Servicer shall not be liable for any portion of any
such amount resulting from the willful misfeasance, bad faith or negligence of
the Agent.
SECTION 4.05. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect until terminated pursuant to this
Section 4.05. If Chrysler Credit Corporation shall resign as Servicer in
accordance with the provisions of this Agreement or if all of the rights and
obligations of the Servicer shall have been terminated under Section 18.01 of
the Pooling and Servicing Agreement, the appointment of the Servicer as
custodian shall be terminated by the Trustee, in the same manner as the Trustee
acting on instruction of Holders of Certificates may terminate the rights and
obligations of the Servicer under Section 18.01 of the Pooling and Servicing
Agreement. The Agent, at the direction of the Trustee, may terminate the
Servicer's appointment as custodian, with cause at any time upon written
notification to the Servicer, and without cause upon 30 days' prior written
notification to the Servicer. As soon as practicable after any termination of
such appointment, the Servicer shall deliver the Fixed Value Receivable Files
to the Agent or the Agent's agent at such place or places as the Agent may
reasonably designate.
ARTICLE XX
SECTION 5.01. Duties of Servicer. (a) With respect to the Fixed
Value Receivables and on behalf of the Agent, the Trust and CFC, the Servicer
shall perform its functions in accordance with Article XIII of the Pooling and
Servicing Agreement, which this Agreement does hereby incorporate by reference.
(b) The Servicer, on behalf of the Agent, shall also accept the
return of Financed Vehicles by Obligors on or after the date when the Fixed
Value Payments are due under the related Contracts. The Servicer shall inspect
such returned Financed Vehicles and shall make a determination with respect to
any additional charges to the related Obligors related to usage of or wear and
tear on such Financed Vehicles. Any such additional amounts collected by the
Servicer shall be allocated hereunder to CFC.
SECTION 5.02. Representations and Warranties of Servicer. The
Servicer represents and warrants to the Agent that the representations and
warranties in Section 17.01 of the Pooling and Servicing Agreement are true and
correct as of the date of the execution and delivery of this Agreement and are
herein incorporated by reference.
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SECTION 5.03. Indemnities of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(i) The Servicer shall defend, indemnify and hold harmless
the Agent 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.
(ii) The Servicer shall indemnify, defend and hold harmless
the Agent 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 the Agent through, the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its duties hereunder
or by reason of reckless disregard of its obligations and duties
hereunder.
For purposes of this Section, in the event of the termination of the
rights and obligations of Chrysler Credit Corporation (or any successor thereto
pursuant to Section 17.03 of the Pooling and Servicing Agreement) as Servicer
pursuant to Section 18.01 of the Pooling and Servicing Agreement, or a
resignation by such Servicer pursuant to this Agreement, such Servicer shall be
deemed to be the Servicer pending appointment of a successor Servicer (other
than the Trustee) pursuant to Section 18.02 of the Pooling and Servicing
Agreement.
Indemnification under this Section 5.03 shall survive the termination
of this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the recipient thereafter collects any of such
amounts from others, the recipient shall promptly repay such amounts to the
Servicer, without interest.
ARTICLE XXI
SECTION 6.01. Allocation of Collections. The Agent hereby directs
the Servicer to allocate payments received on the Fixed Value Receivables
between the Trust and CFC. With respect to each Fixed Value Receivable the
Servicer shall allocate and distribute to the Trust, for application in
accordance with Section 14.02 of the Pooling and Servicing Agreement, the
amount equal to the Amortizing Payments, and the Servicer shall allocate and
distribute to CFC the amount, if any, received with respect to the Fixed Value
Payment. With respect to each Fixed Value Receivable, amounts collected
thereunder shall be applied in accordance with the terms of the related
Contract, first to the Amortizing Payments until
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such amount shall be paid in full and then to the Fixed Value Payment.
ARTICLE XXII
SECTION 7.01. Duties of Agent. (a) The Agent shall undertake to
perform such duties as are specifically set forth in this Agreement.
(b) (i) The duties and obligations of the Agent shall be
determined solely by the express provisions of this Agreement, the Agent shall
not be liable except for the performance of such duties and obligations as
shall be specifically set forth in this Agreement; (ii) no implied covenants or
obligations shall be read into this Agreement against the Agent; and (iii) in
the absence of bad faith on the part of the Agent, the Agent may conclusively
rely on the truth of the statements and the correctness of the opinions
expressed upon any certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement.
(c) The Agent shall take and maintain custody of the Schedule of
Fixed Value Receivables included as an exhibit to this Agreement and shall
retain all Servicer's Certificates identifying Fixed Value Receivables that
become Purchased Receivables and Liquidated Receivables.
(d) The Agent shall not be liable with respect to any action taken,
suffered or omitted to be taken in good faith in accordance with this Agreement
or at the direction of the Trustee relating to the time, method and place of
conducting any proceeding for any remedy available to the Agent, or exercising
any trust or power conferred upon the Agent under this Agreement.
(e) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act (other than errors in judgment), or its own bad faith, except that the
Agent shall not be liable for any error of judgment made in good faith by an
Agent Officer, unless it shall be proved that the Agent was negligent in
ascertaining the pertinent facts.
(f) Without limiting the generality of this Section or Section 7.04,
the Agent shall have no duty (a) to see to any recording, filing or depositing
of this Agreement or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest in the Fixed
Value Receivables or the related Financed Vehicles, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof; (b) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any
such insurance; (c) to see to the payment or discharge
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of any tax, assessment or other governmental charge or any Lien or encumbrance
of any kind owing with respect to, assessed or levied against, the agency
established herein; (d) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Agent pursuant to this Agreement
believed by the Agent to be genuine and to have been signed or presented by the
proper party or parties; or (e) to inspect the Financed Vehicles at any time or
ascertain or inquire as to the performance or observance of any of the Seller's
or the Servicer's representations, warranties or covenants or the Servicer's
duties and obligations as Servicer and as custodian of the Fixed Value
Receivable Files under this Agreement and the Pooling and Servicing Agreement.
(g) The Agent shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Agent to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under this Agreement.
SECTION 7.02. Agent's Certificate. On or as soon as practicable
after each Distribution Date on which Fixed Value Receivables shall be assigned
to the Seller or the Servicer, as applicable, pursuant to Section 7.03(b),
based on the information contained in a Servicer's Certificate identifying the
Fixed Value Receivables either repurchased during a Collection Period by the
Seller pursuant to Section 12.03 of the Pooling and Servicing Agreement or
purchased by the Servicer pursuant to Section 7.03(a) or Section 20.02 of the
Pooling and Servicing Agreement, and confirming the payment of any Purchase
Amount or Additional Amount due with respect to such repurchased or purchased
Fixed Value Receivable, the Agent shall execute an Agent's Certificate (in the
form of Exhibit L-1 or L-2, as applicable) and shall deliver such Agent's
Certificate, accompanied by a copy of the related Servicer's Certificate to the
Seller or the Servicer, as the case may be. The Agent's Certificate submitted
with respect to such Distribution Date shall operate, as of such Distribution
Date, as an assignment, without recourse, representation or warranty, to the
Seller or the Servicer, as the case may be, of all the Agent's right, title and
interest in and to such Purchased Receivable and all security and documents
relating thereto, such assignment being an assignment outright and not for
security.
SECTION 7.03. Agent's Assignment of Purchased Receivables. (a)
Upon the discovery of any breach pursuant to Section 13.02, 13.05 or 13.06 of
the Pooling and Servicing Agreement, unless such breach shall have been cured
by the last day of the second
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Collection Period following such discovery (or, at the Servicer's election, the
last day of the first following Collection Period), the Servicer shall purchase
any Fixed Value Receivable materially and adversely affected by such breach.
In consideration of the purchase of the Fixed Value Receivable, the Servicer
shall remit the Purchase Amount in the manner specified in Section 14.05 of the
Pooling and Servicing Agreement and shall remit to CFC an amount equal to the
Fixed Value Payment. The sole remedy of the Trustee, the Agent, the Trust, the
Certificateholders, or CFC with respect to a breach pursuant to Section 13.02,
13.05 or 13.06 of the Pooling and Servicing Agreement shall be to require the
Servicer to repurchase Fixed Value Receivables pursuant to Section 13.07 of the
Pooling and Servicing Agreement and this Section 7.03(a).
(b) With respect to all Fixed Value Receivables repurchased by the
Seller pursuant to Section 12.03 of the Pooling and Servicing Agreement or
purchased by the Servicer pursuant to Section 7.03(a) hereof or Section 20.02
of the Pooling and Servicing Agreement, the Agent shall, by an Agent's
Certificate (in the form of Exhibit L-1 or L-2, as applicable), assign, without
recourse, representation or warranty, to the Seller or to the Servicer, as
applicable, all the Agent's right, title and interest in and to such
Receivables and all security and documents relating thereto.
SECTION 7.04. Certain Matters Affecting Agent. Except as otherwise
provided in Section 7.01:
(i) The Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
Servicer's Certificate, certificate of auditors, or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond, or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties.
(ii) The Agent may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it under this
Agreement in good faith and in accordance with such Opinion of
Counsel.
(iii) The Agent shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under or in relation to
this Agreement at the request, order or direction of the Trust
pursuant to the provisions of this Agreement, unless the Trust shall
have offered to the Agent reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or
thereby.
(iv) The Agent shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to
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be authorized or within the discretion, rights or powers conferred
upon it by this Agreement.
(v) Subsequent to the sale of the Fixed Value Receivables
by the Seller to the Agent, the Agent shall have no duty of
independent inquiry, except as may be required by Section 7.01, and
the Agent may rely upon the representations and warranties and
covenants of the Seller and the Servicer contained in this Agreement
with respect to the Fixed Value Receivables and the Fixed Value
Receivable Files.
SECTION 7.05. Agent Not Liable for Fixed Value Receivables. The
recitals contained herein shall be taken as the statements of the Seller or the
Servicer, as the case may be, and the Agent assumes no responsibility for the
correctness thereof. The Agent shall make no representations as to the
validity or sufficiency of this Agreement or of any Fixed Value Receivable or
related document. The Agent shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any security interest in any Financed Vehicle or any Fixed Value Receivable, or
the perfection and priority of such a security interest or the maintenance of
any such perfection and priority, or for or with respect to the efficacy of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under the Pooling and Servicing Agreement, including,
without limitation: the existence, condition, location and ownership of any
Financed Vehicle; the review of any Fixed Value Receivable File; the existence
and enforceability of any physical damage insurance; the existence and contents
of any Fixed Value Receivable or any Fixed Value Receivable File or any related
computer or other record with respect thereto; the validity of the assignment
of any Fixed Value Receivable to the Agent or of any intervening assignment;
the completeness of any Fixed Value Receivable or any Fixed Value Receivable
File; the performance or enforcement of any Fixed Value Receivable; the
compliance by the Seller or the Servicer with any warranty or representation
made under this Agreement or in any related document and the accuracy of any
such warranty or representation prior to the Agent's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof; any investment
of monies by the Servicer or any loss resulting therefrom (it being understood
that the Agent shall remain responsible for any property that it may hold); the
acts or omissions of the Seller, the Servicer or any Obligor; an action of the
Servicer taken in the name of the Agent; or any action by the Agent taken at
the instruction of the Servicer; provided, however, that the foregoing shall
not relieve the Agent of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Agent to
perform its duties under this Agreement or based on the Agent's negligence or
willful misconduct, no recourse shall be had for any claim based on any
provision of this Agreement, the Certificates or any Receivable or assignment
thereof against the Agent in its individual capacity;
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the Agent shall have no personal obligation, liability or duty whatsoever to
any Certificateholder or any other Person with respect to any such claim; and
any such claim shall be asserted solely against the Trust or CFC or any
indemnitor who shall furnish indemnity as provided in this Agreement. The
Agent shall not be accountable for the use or application by the Seller of any
of the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Servicer in respect of the Receivables.
SECTION 7.06. Agent May Own Certificates. The Agent in its
individual or any other capacity may become the owner or pledgee of
Certificates and may deal with the Seller and the Servicer in banking
transactions with the same rights as it would have if it were not Agent.
SECTION 7.07. Agent's Fees and Expenses. The Servicer shall pay to
the Agent, and the Agent shall be entitled to, reasonable compensation for all
services rendered by it in the execution of the obligations created by this
Agreement and in the exercise and performance of any of the Agent's powers and
duties under this Agreement, as specified in a letter dated the date hereof
between the Agent and the Servicer, and the Servicer shall pay or reimburse the
Agent upon its request for all reasonable expenses, disbursements and advances
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) incurred or made by
the Agent in accordance with any provisions of this Agreement, except any such
expense, disbursement or advance as may be attributable to its willful
misfeasance, negligence or bad faith, and Chrysler Credit Corporation shall
indemnify the Agent for, and hold it harmless against, any loss, liability or
expense incurred without willful misfeasance, negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the agency, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties under this Agreement. Any expenses, disbursements or advances
required to be reimbursed to the Agent pursuant to the preceding sentence but
not paid by the Servicer shall be paid out of amounts otherwise allocable to
CFC with respect to the Fixed Value Payments. The provisions of this Section
7.07 shall survive the termination of this Agreement.
SECTION 7.08. Resignation or Removal of Agent. The Agent may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Trust, CFC and the Servicer. Upon receiving such notice
of resignation, the Trustee shall promptly appoint a successor Agent by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Agent and one copy to the successor Agent. If no successor Agent
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of
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resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
If at any time the Agent shall fail to resign after written request
therefor by the Trust, or if at any time the Agent shall be legally unable to
act, or shall be adjudged bankrupt or insolvent, or a receiver of the Agent or
of its property shall be appointed, or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Trust may remove the
Agent. If the Trust shall remove the Agent under the authority of the
immediately preceding sentence, the Trust shall promptly appoint a successor
Agent by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Agent so removed and one copy to the successor
Agent, and shall pay all fees owed to the outgoing Agent.
Any resignation or removal of the Agent and appointment of a successor
Agent pursuant to any of the provisions of this Section 7.08 shall not become
effective until acceptance of appointment by the successor Agent pursuant to
Section 7.09 and payment of all fees and expenses owed to the outgoing Agent.
The Trust shall provide notice of such resignation or removal of the Agent to
CFC and each of the Rating Agencies.
SECTION 7.09. Successor Agent. Any successor Agent appointed
pursuant to Section 7.08 shall execute, acknowledge and deliver to the Trust
and to its predecessor Agent an instrument accepting such appointment under
this Agreement, and thereupon the resignation or removal of the predecessor
Agent shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under the Agreement, with like effect
as if originally named as Agent. The predecessor Agent shall upon payment of
its fees and expenses deliver to the successor Agent all documents, statements
and monies held by it under this Agreement; and the Trust and the predecessor
Agent shall execute and deliver such instruments and do such other things as
may reasonably be required to fully and certainly vest and confirm in the
successor Agent all such rights, powers, duties, and obligations.
SECTION 7.10. Merger or Consolidation of Agent. Any corporation into
which the Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Agent, shall be the successor of the Agent hereunder, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. The Agent
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shall mail notice of any such merger or consolidation to each of Moody's and
Standard & Poor's.
SECTION 7.11. Representations and Warranties of Agent. The Agent
shall make the following representations and warranties on which CFC and the
Trust shall rely:
(i) The Agent is a banking corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) The Agent has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this
Agreement, and shall have taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(iii) This Agreement has been duly executed and delivered by
the Agent.
SECTION 7.12. No Bankruptcy Petition. The Agent covenants and agrees
that prior to the date that is one year and one day after the date on which all
of all securities issued by the Trust have been paid in full, it will not
institute against, or join any other Person in instituting against, the Seller
or the Trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or any other proceedings under any federal or state
bankruptcy or similar law.
ARTICLE XXIII
SECTION 8.01. Chrysler Credit Corporation Not to Resign as Servicer.
Subject to the provisions of Section 17.03 of the Pooling and Servicing
Agreement, Chrysler Credit Corporation shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties hereunder shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of Chrysler Credit Corporation shall be communicated to the
Agent at the earliest practicable time (and, if such communication is not in
writing, shall be confirmed in writing at the earliest practicable time) and
any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Agent concurrently with or promptly after such notice.
No such resignation shall become effective until the Agent or a successor
Servicer shall have assumed the responsibilities and obligations of Chrysler
Credit Corporation in accordance with Section 18.02 of the Pooling and
Servicing Agreement. The Servicer shall at all times be the same entity as the
Servicer under the Pooling and Servicing Agreement in accordance with the
relevant provisions thereof.
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ARTICLE XXIV
SECTION 9.01. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement.
(i) The Seller shall indemnify, defend and hold harmless
the Agent from and against any taxes that may at any time be asserted
against the Agent with respect to, and as of the date of, the sale of
the Fixed Value Receivables to the Agent, including any sales, gross
receipts, general corporation, tangible personal property, privilege,
or license taxes (but not including any taxes asserted with respect to
ownership of the Fixed Value Receivables or federal or other income
taxes arising out of the transactions contemplated by the Agreement)
and costs and expenses in defending against the same.
(ii) The Seller shall indemnify, defend and hold harmless
the Agent from and against any loss, liability or expense incurred by
reason of the Seller's willful misfeasance, bad faith or negligence in
the performance of its duties under the Agreement, or by reason of
reckless disregard of its obligations and duties under the Agreement.
Indemnification under this Section 9.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Seller shall have made any indemnity payments to the Agent pursuant to
this Section and the Agent thereafter shall collect any such amounts from
others, the Agent shall repay such amounts to the Seller, without interest.
ARTICLE XXV
SECTION 10.01. Termination. This Agreement shall terminate upon the
termination of the Trust pursuant to the provisions of the Pooling and
Servicing Agreement.
SECTION 10.02. Amendment. This Agreement may be amended by the Agent,
CFC, the Trust and the Servicer, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Certificateholder.
This Agreement may also be amended from time to time by the Agent,
CFC, the Trust and the Servicer with the consent of the Holders of Class A
Certificates and Class B Certificates (which
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consent of any Holder of a Certificate given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Certificate and of any
Certificate issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Certificate)
each voting as a class evidencing not less than 51% of the Class A Certificate
Balance and Class B Certificate Balance, respectively, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Fixed Value Receivables, (b) reduce the
aforesaid percentage of the Class A Certificate Balance and Class B Certificate
Balance required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding or (c) result in a downgrade or
withdrawal of the then current rating of the Certificates by any of the Rating
Agencies initially rating the Certificates.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
The Agent may, but shall not be obligated to, enter into any such
amendment that affects the Agent's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.03. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Notices. All demands, notices, and communications upon
or to the Agent, CFC, the Servicer, the Trustee, Moody's or Standard & Poor's
under the Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been duly
given upon receipt (a) in the case of the Agent, to the following address:
_____________________________________________, (b) in
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the case of CFC, to the following address: Chrysler Financial Corporation,
Attention: Secretary, 27777 Franklin Road, Southfield, Michigan 48034
(810-948-3060), (c) in the case of the Servicer, to Chrysler Credit
Corporation, Attention: Secretary, 27777 Franklin Road, Southfield, Michigan
48034 (810-948-3060), (d) in the case of the Trustee at the Corporate Trust
Office, (e) in the case of Moody's, to Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (f) in the
case of Standard & Poor's, to Standard & Poor's Corporation, 25 Broadway - 20th
Floor, New York, New York 10004, Attention: Asset Backed Surveillance
Department. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in the Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice.
SECTION 10.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of the Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of the Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
IN WITNESS WHEREOF, CFC, the Servicer, the Agent and the Trustee on
behalf of the Trust have caused this Agency Agreement to be duly executed by
their respective officers as of the day and year first above written.
_________________________________,
as
Trustee of Premier Auto
Trust 199_-_
By: ______________________________
Name:
Title:
CHRYSLER FINANCIAL CORPORATION
By: ______________________________
Name:
Title:
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<PAGE> 169
CHRYSLER CREDIT CORPORATION, as
Servicer
By: ______________________________
Name:
Title:
_________________________________,
as Agent
By: ______________________________
Name:
Title:
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Schedule A
Schedule of Fixed Value Receivables
(To be delivered to the Trustee and the Agent at Closing and
Supplemented on each Subsequent Transfer Date on which
Subsequent Fixed Value Receivables are conveyed to the Agent)
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Schedule B
Location of Fixed Value Receivable Files
Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034-8288
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<PAGE> 172
EXHIBIT L-1
Form of Agent's Certificate
pursuant to Section 7.03(b)
of the Agency Agreement
_________________________________, as agent (the "Agent") on behalf of
Chrysler Financial Corporation ("CFC") and Premier Auto Trust 199_-_ (the
"Trust"), pursuant to the Agency Agreement (the "Agency Agreement") dated as of
__________ __, ____ among CFC, the Trust, the Agent and Chrysler Credit
Corporation, as Servicer (the "Servicer"), does hereby sell, transfer, assign
and otherwise convey to CFC, without recourse, representation or warranty, all
of the Agent's right, title and interest in and to all of the Fixed Value
Receivables (as defined in the Agency Agreement) identified in the attached
Servicer's Certificate as "Purchased Receivables," which are to be purchased by
CFC pursuant to Section 12.03 of the Pooling and Servicing Agreement dated as
of __________ __, ____ among CFC, the Servicer and
_________________________________, as Trustee, and all security and documents
relating thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ___,
199_.
_________________________
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EXHIBIT L-2
Form of Agent's Certificate
pursuant to Section 7.03(b)
of the Agency Agreement
_________________________________, as agent (the "Agent") on behalf of
Chrysler Financial Corporation ("CFC") and Premier Auto Trust 199_-_ (the
"Trust"), pursuant to the Agency Agreement (the "Agency Agreement") dated as of
__________ __, ____ among CFC, the Trust, the Agent and Chrysler Credit
Corporation, as Servicer (the "Servicer") does hereby sell, transfer, assign,
and otherwise convey to the Servicer, without recourse, representation or
warranty, all of the Agent's right, title and interest in and to all of the
Fixed Value Receivables (as defined in the Agency Agreement) identified in the
attached Servicer's Certificate as "Purchased Receivables," which are to be
purchased by the Servicer pursuant to Section 7.03(a) of the Agency Agreement
or Section 20.02 of the Pooling and Servicing Agreement dated as of __________
__, ____ among CFC, the Servicer and ___________________ ________, as Trustee,
and all security and documents relating thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ___,
199_.
_______________________________
By: ___________________________
Name:
Title:
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<PAGE> 174
EXHIBIT M-1
FORM OF TRUSTEE' CERTIFICATE - ASSIGNMENT TO SELLER
Trustee's Certificate
pursuant to Section 19.14 of the
Pooling and Servicing Agreement
__________________________________, as trustee (the "Trustee") of
Premier Auto Trust 199___-___, created pursuant to the Pooling and Servicing
Agreement, dated as of ____________________ (including the Standard terms and
Conditions of Agreement incorporated by reference therein, the "Pooling and
Servicing Agreement"), among Chrysler Financial Corporation (the "Seller"),
Chrysler Credit Corporation and the Trustee, does hereby sell, transfer, assign
and otherwise convey to the Seller, without recourse, representation or
warranty, all of the Trustee's right, title and interest in and to all of the
Receivables (as defined in the Pooling and Servicing Agreement) identified in
the attached Servicer's Certificate as "Purchased Receivables," which are to be
repurchased by the Seller pursuant to Section 12.03 of the Pooling and
Servicing Agreement, and all security and documents relating thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this _______ day of
______________________, 199___.
_________________________________________
M-1-1
<PAGE> 175
EXHIBIT M-2
FORM OF TRUSTEE' CERTIFICATE - ASSIGNMENT TO SERVICER
Trustee's Certificate
pursuant to Section 19.14 of the
Pooling and Servicing Agreement
__________________________________, as trustee (the "Trustee") of
Premier Auto Trust 199___-___, created pursuant to the Pooling and Servicing
Agreement, dated as of ____________________ (including the Standard terms and
Conditions of Agreement incorporated by reference therein, the "Pooling and
Servicing Agreement"), among Chrysler Financial Corporation, Chrysler Credit
Corporation (the "Servicer") and the Trustee, does hereby sell, transfer,
assign and otherwise convey to the Servicer, without recourse, representation
or warranty, all of the Trustee's right, title and interest in and to all of
the Receivables (as defined in the Pooling and Servicing Agreement) identified
in the attached Servicer's Certificate as "Purchased Receivables," which are to
be purchased by the Servicer pursuant to Section 13.07 or Section 20.02 of the
Pooling and Servicing Agreement, and all security and documents relating
thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this _______ day of
______________________, 199___.
_________________________________________
M-2-1
<PAGE> 1
Exhibit 5.1
October 5, 1994
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034
Gentlemen:
Re: Chrysler Financial Corporation
Registration Statement on Form S-3
to register Premier Auto Trusts
(the "Registration Statement")
I am Vice President and General Counsel of Chrysler Financial
Corporation, a Michigan corporation, as seller (the "Seller") and Chrysler
Credit Corporation, a Delaware corporation, as servicer (the "Servicer") in
connection with the above-captioned Registration Statement, filed by the Seller
with the Securities and Exchange Commission in connection with the registration
by the Seller of Asset Backed Notes (the "Notes") and Asset Backed Certificates
(the "Certificates") in an aggregate principal amount of $11,156,250,000. As
described in the Registration Statement, the Notes and/or the Certificates will
be issued from time to time in series, with each series to be issued by a trust
(each, a "Trust") to be formed by the Seller pursuant to a Trust Agreement
(each, a "Trust Agreement") among the Seller, a wholly-owned subsidiary of the
Seller, and an Owner Trustee or a Pooling and Servicing Agreement among the
Seller, the Servicer and a Trustee (each a "Pooling and Servicing Agreement").
With respect to each series, the Certificates will be issued pursuant to a
Trust Agreement or a Pooling and Servicing Agreement, the Notes will be issued
pursuant to an Indenture (each, an "Indenture") between the related Trust and
an Indenture Trustee. The Certificates and the Notes will be sold from time to
time pursuant to certain underwriting agreements (the "Underwriting
Agreements") between the Seller and various underwriters named therein.
I am admitted to the State Bar of Michigan and I express no opinion as
to the laws of any other jurisdiction except the laws of the United States of
America and the State of Michigan to the extent specifically referred to
herein.
<PAGE> 2
I have examined and relied upon the Registration Statement and, in
each case as filed with the Registration Statement, the form of Sale and
Servicing Agreement among a Trust, the Seller and the Servicer, the form of
Indenture (including the forms of Notes included as exhibits thereto), the form
of Trust Agreement or Pooling and Servicing Agreement (including the forms of
Certificates included as an exhibit thereto and, with respect to the Trust
Agreement, the form of Certificate of Trust to be filed pursuant to the
Delaware Business Trust Act) and the forms of Underwriting Agreements relating
to the Notes and the Certificates (collectively, the "Operative Documents").
In addition, I have examined and considered executed originals or counterparts,
or certified or other copies identified to my satisfaction as being true copies
of such certificates, instruments, documents and other corporate records of the
Seller and matters of fact and law as I deem necessary for the purposes of the
opinion expressed below. Capitalized terms not otherwise defined herein have
the meanings assigned to them in the Registration Statement.
In my examination I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, the conformity
to original documents of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such documents. As
to any facts material to the opinions expressed herein which were not
independently established or verified, I have relied upon statements and
representations of officers and other representatives of the Seller and others.
Based on and subject to the foregoing, I am of the opinion that, with
respect to the Notes and/or Certificates of any series, when (i) the
Registration Statement becomes effective pursuant to the provisions of the
Securities Act of 1933, as amended, (ii) the amount, price, interest rate and
other principal terms of such Notes and/or Certificates have been duly approved
by the Board of Directors of the Seller, (iii) the applicable Operative
Documents relating to such series have each been duly completed, executed and
delivered by the parties thereto substantially in the form filed as an exhibit
to the Registration Statement reflecting the terms established as described
above, (iv) with respect to each Trust formed pursuant to a Trust Agreement,
the Certificate of Trust for the related Trust has been duly executed by the
Owner Trustee and timely filed with the Secretary of State of the State of
Delaware, (v) with respect to each series that includes Notes, the related
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended, and (vi) such Notes and/or Certificates have been duly executed and
issued by the related Trust and authenticated by the Owner Trustee, the
Indenture Trustee or Trustee, as applicable, and sold by the Seller, all in
accordance with the terms and conditions of the related Operative Documents
- 2 -
<PAGE> 3
and in the manner described in the Registration Statement, such Notes and/or
Certificates will have been duly authorized by all necessary action of the
Trust and will have been legally issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ Allan L. Ronquillo
Allan L. Ronquillo
Vice President and
General Counsel
/mr
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<PAGE> 1
EXHIBIT 8.1
BROWN & WOOD
ONE WORLD TRADE CENTER
NEW YORK, N.Y. 10048-0557
October 5, 1994
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
RE: CHRYSLER FINANCIAL CORPORATION
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as special federal tax counsel to the trusts referred to
below in connection with the filing by Chrysler Financial Corporation, a
Michigan corporation (the "Registrant"), of a Registration Statement on Form S-3
(such registration statement, together with the exhibits and any amendments
thereto, the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act") for the registration under the Act of asset backed notes (the "Notes")
and asset backed certificates (the "Certificates") in an aggregate principal
amount of up to $ . As described in the Registration Statement,
the Notes and/or the Certificates will be issued from time to time in series,
with each series being issued by a trust (each, a "Trust") to be formed by the
Registrant pursuant to a Trust Agreement (each, a "Trust Agreement") among the
Registrant, a wholly-owned subsidiary of the Registrant (or a limited
partnership of which such subsidiary is the general partner) specified in the
related prospectus supplement and a trustee, or a Pooling and Servicing
Agreement (each, a "Pooling and Servicing Agreement") among the Registrant,
Chrysler Credit Corporation, as servicer, and a trustee. Each series may include
one or more classes of Notes, which will be issued pursuant to an Indenture
between the related Trust and an indenture trustee. Each series will include one
or more classes of Certificates, which will be issued pursuant to a Trust
Agreement or a Pooling and Servicing Agreement.
We have advised the Registrant with respect to certain federal income tax
consequences of the proposed issuance of the Notes and the Certificates. This
advice is summarized under the headings "Summary of Terms -- Tax Status" and
"Certain Federal Income Tax Consequences" in the Prospectus and "Summary of
Terms -- Tax Status" in the Prospectus Supplements, all a part of the
Registration Statement. Such description does not purport to discuss all
possible federal income tax ramifications of the proposed issuance, but with
respect to those federal income tax consequences that are discussed, in our
opinion, the description is accurate in all material respects.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to a reference to this firm (as special federal tax
counsel to the Trust) under the heading "Certain Federal Income Tax
Consequences" in the Prospectus forming a part of the Registration Statement,
without implying or admitting that we are "experts" within the meaning of the
Act or the rules and regulations of the Commission issued thereunder, with
respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
/s/ Brown & Wood
<PAGE> 1
Exhibit 8.2
October 5, 1994
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
Chrysler Credit Corporation
27777 Franklin Road
Southfield, Michigan 48034
Gentlemen:
Re: Chrysler Financial Corporation
Registration Statement on Form S-3
to register Premier Auto Trusts
(the "Registration Statement")
I am Vice President and General Counsel of Chrysler Financial
Corporation, a Michigan corporation, as seller (the "Seller") and Chrysler
Credit Corporation, a Delaware corporation, as servicer (the "Servicer") in
connection with the above-captioned Registration Statement, filed by the Seller
with the Securities and Exchange Commission in connection with the registration
by the Seller of Asset Backed Notes (the "Notes") and Asset Backed Certificates
(the "Certificates") in an aggregate principal amount of $11,156,250,000. As
described in the Registration Statement, the Notes and/or the Certificates will
be issued from time to time in series, with each series to be issued by a trust
(each, a "Trust") to be formed by the Seller pursuant to a Trust Agreement
(each, a "Trust Agreement") among the Seller, a wholly-owned subsidiary of the
Seller, and an Owner Trustee or a Pooling and Servicing Agreement (each a
"Pooling and Servicing Agreement") among the Seller, the Servicer and a
Trustee. With respect to each series, the Certificates will be issued pursuant
to a Trust Agreement or a Pooling and Servicing Agreement, the Notes will be
issued pursuant to an Indenture (each, an "Indenture") between the related
Trust and an Indenture Trustee. The Notes and/or Certificates will be sold
from time to time pursuant to certain underwriting agreements (the
"Underwriting Agreements") between the Seller and various underwriters named
therein.
I am admitted to the State Bar of Michigan and I express no opinion as
to the laws of any other jurisdiction except the laws of the United States of
America and the State of Michigan to the extent specifically referred to
herein.
<PAGE> 2
I hereby confirm that the statements set forth in the Prospectus
forming a part of the Registration Statement under the caption "Certain State
Tax Consequences with respect to Trusts for which a Partnership Election is
made" accurately describe the material Michigan tax consequences to
holders of the Certificates and the Notes.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the captions "Certain
State Tax Consequences" and "Legal Opinions" in the Prospectus included in the
Registration Statement.
Very truly yours,
/s/ Allan L. Ronquillo
Allan L. Ronquillo
Vice President and
General Counsel
/mr
- 2 -
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
of Chrysler Financial Corporation hereby severally constitutes and appoints
ROBERT A. LINK, BYRON C. BABBISH and STEVEN C. POLING, or any one or more of
them, to be his agents, proxies and attorneys-in-fact, to sign and execute in
his name, place and stead and on his behalf as a director of Chrysler Financial
Corporation, and to file with the Securities and Exchange Commission, the
Registration Statement of Chrysler Financial Corporation on Form S-3,
registering under the Securities Act of 1933, as amended, asset backed
securities having an aggregate initial public offering price of $11,156,250,000
and any and all further amendments (including post-effective amendments) to
such Registration Statement, and to file all exhibits thereto and other
documents in connection therewith, granting unto said attorneys-in-fact and
agents and each of them, full power and authority to do and perform each and
every act and thing required to be done that may be necessary or desirable,
hereby approving, ratifying and confirming all that the aforesaid agents,
proxies and attorneys-in-fact do, or that any one of them does or causes to be
done, on his behalf pursuant to this Power of Attorney.
<PAGE> 2
- 2 -
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of this 5th day of October, 1994.
<TABLE>
<S> <C>
/s/ W. S. Bishop /s/ R. A. Lutz
- --------------------------- ----------------------------
W. S. Bishop R. A. Lutz
/s/ D. M. Cantwell /s/ W. J. O'Brien III
- --------------------------- ----------------------------
D. M. Cantwell W. J. O'Brien III
/s/ T. P. Capo /s/ John P. Tierney
- --------------------------- ----------------------------
T. P. Capo John P. Tierney
/s/ R. J. Eaton /s/ G. C. Valade
- --------------------------- ----------------------------
R. J. Eaton G. C. Valade
/s/ Jeremiah E. Farrell
- ---------------------------
Jeremiah E. Farrell
</TABLE>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
_________
/________/
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(State of incorporation) (I.R.S. Employer
if not a national bank Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal executive offices) (Zip Code)
________________
PREMIER AUTO TRUST 1994-5
AND ANY OTHER PREMIER AUTO TRUST 199_-____ THAT ISSUES NOTES
UNDER THE RELATED PROSPECTUS SUPPLEMENT AND PROSPECTUS
(Exact name of obligor as specified in its charter)
DELAWARE APPLIED FOR
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
C/O CHEMICAL BANK DELAWARE
1201 MARKET STREET, 9th FLOOR 19801
WILMINGTON, DELAWARE
(Address of principal executive offices) (Zip Code)
ASSET BACKED NOTES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, N.Y.
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, N.Y.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS
Exhibit 1 -
Restated Organization Certificate of Bankers Trust Company dated
August 7, 1990 and Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated March 28, 1994 -
Incorporated herein by reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-79862.
Exhibit 2 -
Certificate of Authority to commence business - Incorporated herein by
reference to Exhibit 2 filed with Form T-1 Statement, Registration No.
33-21047.
Exhibit 3 -
Authorization of the trustee to exercise corporate trust powers -
Incorporated herein by reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
<PAGE> 3
Exhibit 4 -
Existing By-Laws of Bankers Trust Company, as amended on September 21,
1993 - Incorporated herein by reference to Exhibit 1 filed with Form
T-1 Statement, Registration No. 33-69986.
Exhibit 5 -
Not applicable
Exhibit 6 -
Consent of Bankers Trust Company required by Section 321(b) of the
Act - Incorporated herein by reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 22-18864.
Exhibit 7 -
Report of Condition of Bankers Trust Company dated as of
June 30, 1994 - Attached hereto as Exhibit 1.
Exhibit 8 -
Not applicable
Exhibit 9 -
Not applicable
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 31st day of August, 1994.
BANKERS TRUST COMPANY
By: /s/ Melissa Kaye
Melissa Kaye
Vice President
<PAGE> 5
EXHIBIT 1
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/94 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Page RC-1
City, State Zip: New York, NY 10006
FDIC Certificate No.: /0/0/6/2/3/
-----------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 (-
-------- ------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU
- --------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . . . . . . . . . . . . 0081 2,650,000 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0071 2,075,000 1.b.
2. Securities:
a. Hold-to-maturity securities (from Schedule RC-B, column A). . . . . . . . . . . . . . 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D). . . . . . . . . . . . . 1773 4,364,000 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0276 4,236,000 3.a.
b. Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . 0277 617,000 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) . RCFD 2122 16,068,000 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . RCFD 3123 1,264,000 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . . . . 2125 14,624,000 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3545 37,240,000 5.
6. Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . 2145 727,000 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . 2150 277,000 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule
RC-M) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2130 184,000 8.
9. Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . 2155 401,000 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . . . . 2143 10,000 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2160 9,251,000 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . . . . . . . . . . . . 2170 75,906,000 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
3
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/94 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Page RC-2
City, State Zip: New York, NY 10006
FDIC Certificate No.: /0/0/6/2/3/
-----------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU
- --------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCON 2200 7,980,000 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . RCON 6631 3,321,000 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCON 6636 4,656,000 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule
RC-E, part II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFN 2200 14,303,000 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . . . . . RCFN 6631 631,000 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCFN 6636 13,672,000 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 0278 6,620,000 14.a.
b. Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . RCFD 0279 839,000 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . RCON 2840 0 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3548 23,272,000 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . . . . . . . . . . . RCFD 2332 9,463,000 16.a.
b. With original maturity of more than one year . . . . . . . . . . . . . . . . . RCFD 2333 1,261,000 16.b.
17. Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . RCFD 2910 11,000 17.
18. Bank's liability on acceptance executed and outstanding . . . . . . . . . . . . . RCFD 2920 401,000 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3200 1,283,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . RCFD 2930 6,057,000 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . . . . . . . . RCFD 2948 72,690,000 21.
22. Limited-Life preferred stock and related surplus . . . . . . . . . . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . . . RCFD 3838 250,000 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 852,000 24.
25. Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . RCFD 3839 498,000 25.
26. a. Undivided profits and capital reserves. . . . . . . . . . . . . . . . . . . . . RCFD 3632 2,805,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities . . . . RCFD 8434 42,000 26.b.
27. Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . RCFD 3284 (331,000) 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . . . . . . . . . . . RCFD 3210 4,216,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items
21, 22, and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3300 75,906,000 29.
</TABLE>
<TABLE>
<S> <C> <C>
MEMORANDUM
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date during 1993 . . . . . . . . . RCFD 6724 N/A M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
4
<PAGE> 1
__________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _____
__________________________________________
THE FUJI BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-2794155
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
Two World Trade Center 10048
New York, New York (Zip Code)
(Address of principal
executive offices)
__________________________________________
PREMIER AUTO TRUST 1994-5 AND ANY OTHER
PREMIER AUTO TRUST 199_-____ THAT ISSUES NOTES
UNDER THE RELATED PROSPECTUS SUPPLEMENT AND PROSPECTUS
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Chemical Bank Delaware 19801
1201 North Market Street (Zip Code)
Wilmington, Delaware
(Address of principal executive offices)
__________________________________________
Asset Backed Notes
(Title of the Indenture Securities)
<PAGE> 2
__________________________________________________
Item 1. General Information
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District)
New York, New York
Federal Deposit Insurance Corporation,
Washington, D.C.
New York Banking Department, Albany, New York.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
Exhibit 1 - Copy of an Organization Certificate of the trustee as now
in effect.
Exhibit 2 - A copy of a certificate of authority of the trustee to
commence business.
Exhibit 3 - A copy of the authorization of the trustee exercise
corporate trust powers.
Exhibit 4 - Copy of existing By-Laws of the trustee.
Exhibit 5 - Not Applicable.
Exhibit 6 - The consent of the trustee required by Section 321(b) of
the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990.
Exhibit 7 - A copy of the latest Report of Condition of The Fuji Bank
and Trust Company as of the close of business on July 29,
1994.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
__________________________________________________
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
The Fuji Bank and Trust Company, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 1st day
of September 1994.
THE FUJI BANK AND TRUST COMPANY
/s/ Sharon Chase Moore
Sharon Chase Moore
Vice President
<PAGE> 4
EXHIBIT 1
ORGANIZATION CERTIFICATE
or
THE FUJI BANK AND TRUST COMPANY
We, the undersigned all being of full age, four of us being citizens of
the United States and three of us being residents of the State of New York,
having associated ourselves together for the purpose of forming Trust Company
under and pursuant to the Banking Law of the State of New York, do hereby
certify:
FIRST, That the name by which the corporation is to be known is The Fuji
Bank and Trust Company.
SECOND, That the place where its principal office is to be located is One
World Trade Center, Borough of Manhattan, City and State of New York.
THIRD, That the amount of its capital stock is to be Ten Million Dollars
($10,000,000) divided into 100,000 shares of the par value of $100 per share.
No holder of any such shares shall be entitled to any preemptive right within
the meaning of Section 6021 of the Banking Law.
<PAGE> 5
SEVENTH, The corporation is to exercise the powers conferred by Section 100 of
the Banking Law.
IN WITNESS WHEREOF, We have made, signed and acknowledged this certificate
in duplicate, this 11th day of June 1974.
/s/ A. Halsey Cook
/s/ Joseph A. Doyle
/s/ C. Bedford Johnson
/s/ Tanehiko Kamiura
/s/ Yasuji Mori
/s/ Yoshio Nakayama
/s/ Jiro Nozaki
/s/ Paul E. Wallendorf
State of New York )
) ss.:
County of New York )
On this 11th day of June 1974 personally appeared before me
A. Halsey Cook Yoshio Nakayama
Joseph A. Doyle Jiro Nozaki
C. Bedford Johnson Paul E. Wallendorf
Tanehiko Kamiura
Yasuji Mori
by me known to be the persons described in and who executed the foregoing
certificate and severally acknowledged that they executed the same.
___________________________________
(Attach County Clerk's ...)
<PAGE> 6
EXHIBIT 2
STATE OF NEW YORK
(SEAL)
Banking Department
Know all Men by these Presents, Whereas, the orgainzation certificate of THE
FUJI BANK AND TRUST COMPANY of New York, New York has heretofore been duly
approved and said THE FUJI BANK AND TRUST COMPANY, has complied with the
provisions of Chapter 2 of the Consolidated Laws,
Now Therefore, I, HARRY W. ALBRIGHT, JR., as Superintendent of Banks of
the State of New York, do hereby authorize the said THE FUJI BANK AND TRUST
COMPANY to transact the business of a trust company at One World Trade Center,
Borough of Manhattan, City of New York within this State.
In Witness Whereof, I have hereunto set my hand
(SEAL) and affixed the official seal of the Banking
Department at Albany, this 29th day of
November in the year of our Lord one thousand
nine hundred and seventy-four.
<PAGE> 7
EXHIBIT 3
STATE OF NEW YORK
(SEAL)
Banking Department
Know all Men by these Presents, Whereas, the orgainzation certificate of THE
FUJI BANK AND TRUST COMPANY of New York, New York has heretofore been duly
approved and said THE FUJI BANK AND TRUST COMPANY, has complied with the
provisions of Chapter 2 of the Consolidated Laws,
Now Therefore, I, HARRY W. ALBRIGHT, JR., as Superintendent of Banks of
the State of New York, do hereby authorize the said THE FUJI BANK AND TRUST
COMPANY to transact the business of a trust company at One World Trade Center,
Borough of Manhattan, City of New York within this State.
In Witness Whereof, I have hereunto set my hand
(SEAL) and affixed the official seal of the Banking
Department at Albany, this 29th day of
November in the year of our Lord one thousand
nine hundred and seventy-four.
<PAGE> 8
EXHIBIT 4
BY-LAWS
OF
THE FUJI BANK AND TRUST COMPANY
(LOGO)
EFFECTIVE NOVEMBER 20, 1974
AS AMENDED MAY 17, 1988,
MAY 14, 1990 AND MAY 17, 1994
<PAGE> 9
CONTENTS
ARTICLE
- -------
I Meetings of Stockholders
Section 1.01. Annual Meetings.
Section 1.02. Special Meetings.
Section 1.03. Place of Annual Meetings.
Section 1.04. Place of Special Meetings.
Section 1.05. Notice of Meetings.
Section 1.06. Waiver of Notice.
Section 1.07. Quorum and Adjournment.
Section 1.08. Vote of Stockholders.
Section 1.09. Proxies.
Section 1.10. Written Consents.
II Determination of Voting, Dividend and Other Rights
Section 2.01. Record Date Fixed by Board.
Section 2.02. Record Date in Other Cases.
III Directors
Section 3.01. Number, Qualifications and Term of Office.
Section 3.02. Election.
Section 3.03. Annual Meetings.
Section 3.04. Regular Meetings.
Section 3.05. Special Meetings.
Section 3.06. Place of Meetings.
Section 3.07. Notice of Meetings.
Section 3.08. Quorum and Manner of Acting.
Section 3.09. Directors' Fees.
Section 3.10. Removal of Directors.
Section 3.11. Resignations.
Section 3.12. Vacancies.
Section 3.13. Participation by Directors.
<PAGE> 10
ARTICLE
- -------
IV Committees
Section 4.01. Executive Committee.
Section 4.02. Examining Committee.
Section 4.03. Credit Committee.
Section 4.04. Trust Committee.
Section 4.05. Other Committees.
V Officers and Employees
Section 5.01. Officers.
Section 5.02. Bonds.
Section 5.03. The President.
Section 5.04. The Senior Executive Vice President
and the Executive Vice President.
Section 5.05. The Secretary.
Section 5.06. The Comptroller.
Section 5.07. The Auditor.
Section 5.08. Other Officers.
Section 5.09. Fiduciary Signatures.
Section 5.10. Other Signatures.
VI Indemnification
VII Seal
VIII Capital Stock
Section 8.01. Certificates.
Section 8.02. Transfers of Shares; Lost Certificates.
Section 8.03. Registered Stockholders.
IX Amendments
<PAGE> 11
BY-LAWS
OF THE
FUJI BANK AND TRUST COMPANY
__________________
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1.01. Annual Meetings. The annual meetings of stockholders shall
be held on such date and at such time in March of each year as may be fixed
from time to time by the Board of Directors for the election of directors and
the transaction of such other business as may properly come before the meeting.
SECTION 1.02. Special Meetings. A special meeting of the stockholders may
be called at any time and for any purpose or purposes by (i) the President,
(ii) the Board of Directors, (iii) the Secretary upon written request of the
holders of record of at least one-half of the outstanding shares, or (iv) the
holders of record of at least one-half of the outstanding shares. Every
request by stockholders to the Secretary referred to in clause (iii) above
shall state the purpose or purposes of the meeting. The stockholders calling a
meeting in accordance with clause (iv) above shall forward notice thereof to
the Secretary.
SECTION 1.03. Place of Annual Meetings. Annual meetings of the
stockholders shall be held at such place within the Borough of Manhattan, City
and State of New York, as may be fixed from time to time by the Board of
Directors and stated in the notice of the meeting or in a duly executed waiver
of notice thereof, or, if not so fixed, at the main office of the Company
within said Borough of Manhattan.
1
<PAGE> 12
SECTION 1.04. Place of Special Meetings. Special meetings of the
stockholders shall be held at such place within or without the State of New
York as may be fixed by the person or persons calling the meeting and stated in
the notice of the meeting or in a duly executed waiver of notice thereof, or if
not so fixed, at the main office of the Company within said Borough of
Manhattan.
SECTION 1.05. Notice of Meetings. Except when otherwise permitted by
statute, a written notice of the place, date and hour of each meeting, whether
annual or special, shall be given personally or by mail to each stockholder
entitled to vote thereat, not less than 10 nor more than 50 days prior to the
meeting. The notice of any special meeting shall also state the purpose or
purposes for which the meeting is called and that it is being issued by or at
the direction of the person or persons calling the meeting. If such notice is
mailed, it is given when deposited in the United States mail with postage
thereon prepaid, directed to the stockholder at his address as it appears on
the record of stockholders, or, if he shall have filed with the Secretary a
written request that notices to him be mailed to some other address, then
directed to him at such other address.
SECTION 1.06. Waiver of Notice. Notice of meeting need not be given to any
stockholder who submits a waiver of notice, signed in person or by proxy,
whether before or after the meeting. The attendance of any stockholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the place of notice of such meeting shall constitute a waiver of
notice by him.
SECTION 1.07. Quorum and Adjournment. At all meetings of stockholders,
except as otherwise provided by statute or the Organization Certificate, the
holders of a majority of the shares entitled to vote thereat, present in person
or by proxy, shall be requisite for and shall constitute a quorum for the
transaction of business. When a quorum is once present to organize a meeting,
it is not broken by the subsequent withdrawal of any stockholder.
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In the absence of a quorum, the stockholders present may adjourn the meeting
from time to time. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting originally called. No notice of any adjourned meeting need be given if
the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken. However, if, after the adjournment,
the Board of Directors shall fix a new record date for the adjourned meeting,
notice of the adjourned meeting shall be given to each stockholder of record on
the new record date entitled to notice as specified in these By-Laws.
SECTION 1.08. Vote of Stockholders. Each stockholder of record shall be
entitled at every meeting of stockholders to one vote for every share standing
in his name on the record of stockholders. Directors shall be elected as
hereafter provided and whenever any other corporate action is to be taken by
vote of the stockholders, it shall, except as otherwise required by statute or
by the Organization Certificate, be authorized by a majority of the votes cast
at a meeting of stockholders by the holders of shares entitled to vote thereon.
SECTION 1.09. Proxies. Every stockholder entitled to vote at a meeting of
stocholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy. Every proxy must be in
writing and signed by the stockholder or his attorney-in-fact. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the stockholder executing it, except as otherwise provided by law. No
director, officer, clerk, teller, or bookkeeper of the Company shall act as
proxy at a meeting of stockholders.
SECTION 1.10. Written Consents. Whenever by law stockholders are required
or permitted to take any action by vote, such action may be taken on written
consent without a meeting, setting forth the action so taken, signed in person
or by proxy by the holders of all outstanding shares entitled to vote thereon.
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ARTICLE II
DETERMINATION OF VOTING, DIVIDEND AND
OTHER RIGHTS
SECTION 2.01. Record Date Fixed by Board. For the purpose of determining
the stockholders entitled to notice or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to or dissent from any
proposal without a meeting, or for the purpose of determining stockholders
entitled to receive payment of any dividend or the allotment of any rights, or
for the purpose of any other action, the Board of Directors may fix, in
advance, a date as the record date for any such determination of stockholders.
Such date shall not be more than 50 nor less than 10 days before the date of
any such meeting, nor more than 50 days prior to any other action. Whenever a
determination of stockholders of record entitled to notice of or to vote at any
meeting of stockholders has been made, such determination shall apply to any
adjournment thereof unless the Board of Directors shall fix a new record date
for the adjourned meeting.
SECTION 2.02. Record Date in Other Cases. If no record date is otherwise
fixed in these By-Laws or by the Board of Directors pursuant to these By-Laws,
the record date for the determination of stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if no notice is given,
the day the meeting is held, and the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which
the resolution of the Board of Directors relating thereto is adopted.
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ARTICLE III
DIRECTORS
SECTION 3.01. Number, Qualification and Term of Office. The number of
directors, each of whom shall be qualified as required by law or by the
Organization Certificate, constituting the entire Board shall not be less than
the minimum number and not more than the maximum number prescribed in the
Organization Certificate. The number of directors shall be determined and the
number so determined may be changed within such minimum and maximum limitations
from time to time by the holders of record of a majority of the outstanding
shares. At each annual meeting of stocholders, each of the directors shall be
elected by the stockholders to hold office, unless sooner removed or
disqualified, until the next annual meeting of stockholders and until his
successor has been elected and qualifed.
SECTION 3.02. Election. At each meeting of the stockholders for the
election of directors, at which a quorum is present, the persons receiving a
plurality of the votes cast by the holders of shares entitled to vote in the
elections shall be elected as directors.
SECTION 3.03. Annual Meetings. Upon due qualification a newly elected
board of Directors shall meet once each year to organize, to designate one of
its members as chairman of the Board of Directors to preside at all meetings
thereof and of the stockholders and to elect officers. Unless such annual
meeting shall be held on the day fixed for the annual meeting of stockholders
and as soon as practicable after the time and at the place fixed for such
stockholder meeting, it may be held at such place, within or without the State
of New York, and at such time, which shall be within 15 days after the annual
meeting of stockholders, as shall be determined by the Board of Directors, the
President, or the stockholders. Any business may be transacted at such meeting
which could have been transacted at a regular meeting of the Board of
Directors. The annual meeting of the Board of Directors shall constitute the
regular meeting of the Board of Directors for the month in which it is held
unless a regular meeting of the Board of Directors has already been held in
that month.
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SECTION 3.04. Regular Meetings. Regular meetings of the Board of Directors
shall be held at least once in each month at such time as shall from time to
time be determined by the Board of Directors. In case the day so determined
shall be a legal holiday, such meeting shall be held on the next succeeding
day, not a legal holiday, at the same hour.
SECTION 3.05. Special Meetings. Speical meetings of the Board of Directors
shall be held whenever called by the Board of Directors or the President.
Unless limited by statute, the Organization Certificate, these By-Laws, or the
terms of the notice thereof, any and all business may be transacted at any
special meeting.
SECTION 3.06. Place of Meetings. Meetings of the Board of Directors,
regular or special, shall be held at any place within or without the State of
New York, as may from time to time be determined by the Board of Directors
unless, if a special meeting, the person or persons by whom the meeting has
been called have designated another place in the notice of the meeting, in
which case such meeting shall be held at the place so designated. Annual
meetings of the Board of Directors shall be held at the place specified in
Section 3.03 of these By-Laws.
SECTION 3.07. Notice of Meetings. Notice of any special meeting and of
any annual meeting which does not take place on the day fixed for the annual
meeting of stockholders and as soon as practicable after the time and at the
place fixed for such stockholder meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, not later than
the third day before the day on which the meeting is to be held, or shall be
sent to him at such place by telegraph, or be delivered personally or by
telephone, not later than the day before the day on which such meeting is to be
held. Such notice shall state the place, date and hour of the meeting. No
notice need be given of regular meetings and of annual meetings held on the day
fixed for the annual meeting of stockholders and as soon as practicable after
the time and at the place fixed for such stockholder meeting.
Notice of any meeting of the Board of Directors need not be given to any
director who submits a signed waiver of notice before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him.
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SECTION 3.08. Quorum and Manner of Acting. A majority of the directors in
office at the time of any regular, annual or special meeting of the Board of
Directors, but not less than five nor less than one-third of the entire Board,
must be present in person to constitute a quorum for the transaction of all
business. Except as otherwise provided by statute or the the time of the vote,
if a quorum is present at such time, shall be the act of the Board of
Directors. A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of the
adjourned meeting shall be given in accordance with Section 3.07 of these
By-Laws.
SECTION 3.09. Directors' Fees. In consideration of his serving in such
capacity, each director of the Company, other than directors who are officers
of the Company or of any company affiliated withit, shall be entitled to
receive an annual fee in such amount and payable in such installments as the
Board of Directors may from time to time determine. The Board of Directors
shall also have authority to determine, from time to time, the amount of
compensation which shall be paid to its members, other than those who are
officers of the Company or of any company affiliated with it, for attendance at
meetings of the Board of Directors or of any committee of the Board of
Directors, as well as to any directors rendering special services to the
Company.
SECTION 3.10. Removal of Directors. Any director may be removed with or
without cause by the stockholders.
SECTION 3.11. Resignations. Any director may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary of the
Company. Such resignation shall take effect at the time specified therein or,
if not so specified, upon receipt by the Board of Directors, the President or
the Secretary of the Company. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 3.12. Vacancies. All vacancies occurring in the Board of
Directors, including those occurring by reason of newly created directorships
resulting from an increase in the number of directors, shall be filled by
election by the stockholders. Any director elected to fill a vacancy shall hold
office for the unexpired term of his predecessor.
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SECTION 3.13. Participation by Directors. Any one or more members of the
Board of Directors or any committee thereof may participate in a meeting of
the Board of Directors or such committee by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at such meeting.
ARTICLE IV
COMMITTEES
SECTION 4.01. Executive Committee. The Board of Directors may, by
resolution adopted by a majority of the entire Board, designate from among its
members an Executive Committee consisting of at least five directors, one of
whom shall be designated by the Board of Directors as chairman of the Executive
Committee, and may designate one or more additional directors as alternate
members of the Executive Committee, who may replace any absent member or
members at any meeting thereof, all of such members to serve at the pleasure of
the Board of Directors. The Executive Committee may adopt its own rules of
procedure and shall hold special meetings upon the request of any member
thereof. No notice of any meetings of the Executive Committee shall be
required, and three members thereof shall constitute a quorum. All acts done
and powers conferred by the Executive Committee from time to time shall be
deemed to be, and may be certified as being, done or conferred under authority
of the Board of Directors, and shall be reported at the next regular meeting of
the Board of Directors. The Executive Committee shall have and may exercise all
powers of the Board of Directors that may be lawfully delegated, but shall not
have authority as to the following matters:
(1) the submission to stockholders of any action that needs stockholders'
authorization by law;
(2) the filling of vacancies in the Board of Directors or in any
committee of the Board of Directors;
(3) the fixing of compensation of the directors for serving on the Board
of Directors or on any committee of the Board of Directors;
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(4) the amendment or repeal of the By-Laws of the Company, or the
adoption of new By-Laws for the Company;
(5) the amendment or repeal of any resolution of the Board of Directors
which by its terms shall not be so amendable or repealable; and
(6) the taking of action is expressly required by any provision of law
to be taken at a meeting of the Board of Directors or by a specified
proportion of the directors.
SECTION 4.02. Examining Committee. The Board of Directors shall, at its
first meeting after these By-Laws are adopted and at each of its annual
meetings, by resolution adopted by a majority of the entire Board, designate
from among its members an Examining Committee consisting of at least three
directors who are not also officers of the Company, one of whom shall be
designated by the Board of Directors as the chairman of the Examining
Committee. The Examining Committee shall conduct the annual directors'
examination of the Company as required by the New York State Banking Law shall
review the reports of all examinations made of the Company by public
authorities and report thereon to the Board of Directors, and shall report to
the Board of Directors such other matters as it deems advisable with respect to
the Company and the conduct of its operations. In the performance of its
duties, the Examining Committee may employ or retain, from time to time, expert
assistance independent of the officers or personnel of the Company, to make
such studies of the Company's assets, liabilities and accounting and auditing
methods, systems and controls as the Examining Committee may request in order
to determine that the operations of the Company are being audited in such a
manner as to provide prudent and adequate protection. The Examining Committee
may direct the Auditor of the Company to make such investigations as it deems
necessary or advisable with respect to the Company and the conduct of its
operations. The Examining Committee shall adopt its own rules of procedure and
shall hold regular quarterly meetings, and at all other times shall meet on
call of the chairman of the Examining Committee.
SECTION 4.03. Credit Committee. The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate from among its members a
Credit Committee consisting of at least three
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directors, one of whom shall be designated by the Board of Directors as
chairman of the Credit Committee, and may designate one or more additional
directors as alternate members of the Credit Committee, who may replace any
absent member or members at any meeting thereof, all of such members to serve at
the pleasure of the Board of Directors. The Credit Committee may adopt its own
rules of procedure and shall hold special meetings upon the request of any
member thereof. No notice of any meetings of the Credit Committee shall be
required, and two members thereof shall constitute a quorum. All acts done and
powers conferred by the Credit Committee from time to time shall be deemed to be
and may be certified as being, done or conferred under authority of the Board of
Direcotrs, and shall be reported at the next regular meeting of the Board of
Directors. The Credit Committee shall have the authority to:
(1) Review credit applications, credit proposals, credit summaries,
and any related loan documents and determine, in accordance with
the Company's Credit Policy, whether the Company should make or
commit to make, an extension of credit or modify an extension of
credit, when the approval of the Board of Directors, Executive
Committee, or Credit Committee is required by the Company's Credit
Policy.
(2) take any or all actions and authorize any officer of the
Company to take any or all actions which may be necessary
or advisable regarding any extension of credit; and
(3) exercise all other powers and functions in the management
of the Company as may be provided by the Board of Directors
and as may be permitted by law.
SECTION 4.04. Trust Committee. The Board of Directors may, by
resolution adopted by a majority of the entire Board, designate
from among its members a Trust Committee consisting of at least
three directors, one of whom shall be designated by the Board of
Directors as chairman of the Trust Committee, and may designate one
or more additional directors as alternate members of the Trust
Committee, who may replace
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any absent member or members at any meeting thereof, all of such members to
serve at the pleasure of the Board of Directors. The Trust Committee may adopt
its own rules of procedure and shall hold special meetings upon the request of
any member thereof. No notice of any meetings of the Trust Committee shall be
required, and two members thereof shall constitute a quorum. All acts done and
powers conferred by the Trust Committee from time to time shall be deemed to
be, and may be certified as being, done or conferred under authority of the
Board of Directors, and shall be reported at the next regular meeting of the
Board of Directors. The Trust Committee shall have the authority to:
(1) determine, in accordance with the Company's Trust Principles, whether
the Company should accept or terminate a position as trustee,
executor, administrator, registrar, fiscal or transfer agent,
depository, guardian, receiver, committee, conservator, or any other
fiduciary capacity, which the Company is permitted to accept by law;
(2) take any or all actions and authorize any officer of the Company to
take any or all actions which may be necessary or advisable regarding
any fiduciary capacity; and
(3) exercise all other powers and functions in the management of the
Company as may be provided by the Board of Directors and as may be
permitted by law.
SECTION 4.05. Other Committees. The Board of Directors shall have the
power to appoint or provide for from time to time any such other committees
consisting of such directors, officers or other persons and having such powers
and functions in the management of the Company as may be provided by the Board
of Directors and as may be permitted by the law, and from time to time to
suspend or discontinue the powers and duties of such committees. If the members
of any such committee consist of directors, the resolution of the Board of
Directors designating such members shall be adopted by a majority of the entire
Board and such committee shall consist of three or more directors.
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ARTICLE V
OFFICERS AND EMPLOYEES
SECTION 5.01. Officers. The Board of Directors shall, at its first meeting
after these By-Laws are adopted and at each of its annual meetings, elect from
their number a President and shall elect a Senior Executive Vice President and
one or more Executive Vice Presidents, a Secretary and a Conptroller, and may
elect an Auditor, each of whom shall hold office until his successor is elected
and shall have qualified. Any officer elected by the Board of Directors may be
removed by the Board of Directors, or his authority suspended by it, with or
without cause. Any vacancy occurring in any office of any officer referred to
in this paragraph may be filled by the Board of Directors from time to time.
The President may appoint one or more Senior Vice Presidents, one or more
Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant
Treasurers, one or more Assistant Secretaries and such other officers (other
than officers referred to in the first paragraph of this Section) as he may
deem fit.
The compensation of officers elected by the Board of Directors pursuant to
these By-Laws shall be fixed by the Board of Directors. The compensation of
officers appointed by the President pursuant to these By-Laws shall be fixed by
the President.
All other agents and employees of the Company shall be appointed, their
duties prescribed and their compensation fixed by the President, or any
officer authorized to do so by him.
SECTION 5.02. Bonds. Any of the officers or employees of the Company may
be required to give such bond for the faithful performance of his duties as the
Board of Directors may determine.
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SECTION 5.03. The President. The President shall have general supervision
of the policies and operations of the Company on behalf of the Board of
Directors and shall be the Chief Executive Officer of the Company. He shall
manage and administer the Company's operations and perform all duties and
exercise all powers incident to the office of the President and shall perform
such further duties and exercise such further powers as may be assigned to him
from time to time by the Board of Directors. In the absence of the director
designated as chairman of the Board of Directors, the President shall preside
at meetings of the stockholders and at meetings of the Board of Directors. He
shall have the power to sign checks, orders, contracts, leases, notes, drafts
and other documents and instruments in connection with the business of the
Company, and together with the Secretary or an Assistant Secretary conveyances
of real estate and other documents and instruments to which the seal of the
Company is affixed. No person shall hold the offices of both President and
Secretary.
SECTION 5.04. The Senior Executive Vice President and the Executive Vice
President. The Senior Executive Vice President shall perform such duties and
exercise such powers as may be assigned to him from time to time by the Board
of Directors or the President. The Executive Vice President, or each of them,
shall participate in the supervision of the policies and operations of the
Company, and shall perform such further duties and exercise such further powers
as may be assigned to him from time to time by the Board of Directors or the
President. In the absence of the President, his duties shall be performed and
his powers shall be exercised by the Senior Executive Vice President or the
Executive Vice President or, if there be more than one Executive Vice
President, then by one of the Executive Vice Presidents as shall be designated
by the President or, failing such designation, by the Senior Executive Vice
President and the Executive Vice Presidents in the order in which the Senior
Executive Vice President and the Executive Vice Presidents were elected at the
most recent election of officers. The Senior Executive Vice President and
each Executive Vice President shall have the power to sign for the Company to
the extent authorized by the Board of Directors.
SECTION 5.05. The Secretary. The Secretary shall attend all meetings of
the Board of Directors and the stockholders and shall record the minutes of all
proceedings in a book to be kept for that purpose and
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shall, when requested, perform like duties for all committees of the Board of
Directors. He shall attend to the giving of notice of meetings of stockholders
and meetings of the Board of Directors and committees thereof if such notice is
required pursuant to these By-Laws or the rules of procedure of any such
committee, he shall have custody of the corporate seal and shall have authority
to affix the same to any instrument and to attest the same. He shall keep and
account for all books, documents, papers and records of the Company, except
those for which some other officer or agent improperly accountable. He shall
have authority to sign stock certificates, and shall generally perform such
duties and exercise such powers usually pertaining to the office of secretary of
a corporation. He shall perform such further duties and exercise such further
powers as may be assigned to him from time to time by the Board of Directors or
the President. In the absence of the Secretary, such person as shall be
designated by the President shall perform his duties and exercise his powers. No
person may hold the offices of both Secretary and President.
SECTION 5.06. The Comptroller. The Comptroller shall be the chief
accounting officer of the Company. He shall exercise general supervision over,
and be responsible for, the operation of all matters pertaining to the
accounting and bookkeeping of the Company. He shall render reports from time to
time relating to the general financial condition and internal operation of the
Company. He shall render such other reports as may be required and perform such
further duties and exercise such further powers as may be assigned to him from
time to time by the Board of Directors or the President. In the absence of the
Comptroller, such person as shall be designated by the President shall perform
his duties and exercise his powers.
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SECTION 5.07. The Auditor. The Auditor shall be the chief auditing officer
of the Company. He shall exercise general supervision over, and be responsible
for, the operation of all matters pertaining to the auditing of the Company. He
shall continuously examine the affairs of the Company and shall report to the
Board of Directors and the Examining Committee, and shall render from time to
time to the Board of Directors and the Examining Committee audit statements and
reports relating to the general financial condition and internal operation of
the Company as may be requested of him and such other statements and reports as
in his judgment are necessary in the performance of the duties incident to the
office of Auditor. He shall render such other reports as may be required and
perform such further duties and exercise such further powers as may be assigned
to him from time to by the Board of Directors or the President. If the Board of
Directors shall not have elected an Auditor, the Comptroller shall perform his
duties and exercise his powers. If an Auditor shall have been elected, in his
absence such person as shall be designated by the President shall perform his
duties and exercise his powers.
SECTION 5.08. Other Officers. The Senior Vice Presidents, Vice Presidents,
Assistant Vice Presidents, Assistant Treasurers, Assistant Secretaries and all
other officers appointed by the President pursuant to these By-Laws shall
perform such duties and exercise such powers as pertain to their respective
offices or as may be assigned to them from time to time by the President,
except that said officers shall have signing powers only as set forth in
Section 5.09 and 5.10 of these By-Laws.
SECTION 5.09. Fiduciary Signatures. All instruments executed by the
Company as trustee, executor, administrator, registrar, transfer agent,
depositary, agent or in any other fiduciary capacity, including agreements,
indentures, mortgages, deeds, conveyances, satisfactions, releases,
assignments, transfers, participation certificates, powers of attorney,
proxies, petitions, proofs of claim and all other documents and writings in
connection with any fiduciary capacity, may be executed by the President or any
other person there unto authorized by the Board of Directors. Any officer or
person authorized to execute any such instrument is also authorized to affix
the seal of the Company thereto and to cause the same to be attested by the
Secretary or an Assistant Secretary.
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All authentications or certifications of the Company as trustee under any
mortgage, deed of trust, indenture or agreement securing or providing for
bonds, debentures or notes, and all certificates as registrar or transfer agent,
and all checks as disburing agent, and all certificates of deposit, interim
certificates and trust receipts or certificates, may be executed by an officer
or person referred to in the first paragraph of this Section.
The provisions of this Section are in addition to and not in subsitution
for the manner of execution of any instrument elsewhere provided in these
By-Laws.
SECTION 5.10. Other Signatures. All checks, orders, contracts, leases,
notes, drafts and other documents and instruments in connection with the
business of the Company shall be signed by the officers authorized in these
By-Laws to do so or by such other officers or by such employees and agents other
than officers as the Board of Directors shall authorize, and subject to such
restrictions as the Board of Directors shall prescribe. The Board of Directors
may delegate to one or more officers of the Company all or in part of the
authority to grant signing powers contained on this Section.
ARTICLE VI
INDEMNIFICATION
The Company shall, to the extent specified herein, indemnify each person
made or threatened to be made a party to any civil or criminal action or
proceeding by reason of the fact that he, or his testator or intestate, is or
was a director, officer or employee of the Company or served any other
corporation of any kind, domestic or foreign, in any capacity at the request of
the Company. Officers and directors of the Company shall be so indemnified to
the full extent permitted by law and persons other than officers and directors
of the Company shall be so indemnified to the same extent as officers and
directors of the Company.
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ARTICLE VII
SEAL
The Company shall have a seal which shall be in such form as the Board of
Directors shall approve.
ARTICLE VIII
CAPITAL STOCK
SECTION 8.01. Certificates. All certificates of stock shall be signed by
the President and the Secretary, and shall bear the corporate seal. The
signatures and the seal may be facsimile, engraved or printed, to the extent
permitted by law.
SECTION 8.02. Transfer of Shares; Lost Certificates. Transfers of shares
shall be made on the books of the Company only by the person named in the
certificate, or by attorney lawfully constituted in writing, and upon surrender
and cancellation of a certificate or certificates for a like number of shares,
with duly executed assignment and power of transfer endorsed thereon or
attached thereto, and with such proof of the authenticity of the signatures as
the Company or its agents may reasonably require. In the case of loss or
destruction of a certificate, a new certificate may be issued on such terms as
the Board of Directors may prescribe.
SECTION 8.03. Registered Stockholders. The Company shall be protected in
treating the persons in whose names shares stand on the record of stockholders
as the owners thereof for all purposes; and the Company shall not be bound to
recognize any claim to or interest in such shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
ARTICLE IX
AMENDMENTS
These By-Laws may be amended, repealed or adopted by vote of the holders
of the shares at the time entitled to vote in the election of any directors.
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I, ________________________________, CERTIFY that: (1) I am the duly
constituted Secretary of The Fuji Bank and Trust Company, and as such officer
am the custodian of its records; (2) the foregoing By-Laws are the By-Laws of
said Bank, as now in full force and effect.
IN TESTIMONY WHEREOF, I have hereunto affixed my signature and the seal of
the said Bank, in the city of New York, on this day of , 19
_____________________________________
Secretary
(SEAL)
UNITED STATES OF AMERICA, )
STATE OF NEW YORK, ) ss.:
COUNTY OF NEW YORK. )
On this day of , 19 , before me personally appeared
__________________________________, to me known, who signed in my presence the
foregoing certificate with respect to a copy of the By-Laws and who, being by
me duly sworn, did depose and say that he resides at , that he
is the Secretary of The Fuji Bank and Trust Company, that he knows the
corporate seal of said Bank, that the seal affixed to said certificate is said
seal, and that he is duly authorized to sign said certificate and to affix said
seal to said certificate of said Bank.
_____________________________________
<PAGE> 29
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, The Fuji Bank and Trust Company hereby consents
that reports of examinations of the Trustee by the Banking Department of the
State of New York or by any Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission,
upon request thereof.
September 1, 1994
Very truly yours,
THE FUJI BANK AND TRUST COMPANY
By: /s/ SHARON CHASE MOORE
Sharon Chase Moore
Vice President
Attest: /s/ JOHN P. MCGURN
John P. McGurn
Assistant Treasurer
<PAGE> 30
EXHIBIT 7
<TABLE>
<S> <C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires July 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
(LOGO) Please refer to page 1, / 1 /
Table of Contents, for
the required disclosure
of estimated burden.
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031
(940630)
REPORT AT THE CLOSE OF BUSINESS JUNE 30, 1994 -----------
(RCRI 0000)
This report is required by law: 12 U.S.C. Section 324 (State This report form is to be filed by banks with branches and
member banks); 12 U.S.C. Section 1817 (State nonmember banks); consolidated subsidiaries in U.S. territories and possessions,
and 12 U.S.C. Section 161 (National banks). Edge or Agreement subsidiaries, foreign branches, consolidated
foreign subsidiaries, or International Banking Facilities.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an The Reports of Condition and Income are to be prepared in
authorized officer and the Report of Condition must be attested accordance with Federal regulatory authority instructions.
to by not less than two directors (trustees) for State nonmember NOTE: These instructions may in some cases differ from
banks and three directors for State member and National banks. generally accepted accounting principles.
I, WILLIAM C. MERNE, VICE PRESIDENT We, the undersigned directors (trustees), attest to the
------------------------------------------------------------- correctness of this Report of Condition (including the
Name and Title of Officer Authorized to Sign Report supporting schedules) and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
of the named bank do hereby declare that these Reports of in conformance with the instructions issued by the appropriate
Condition and Income (including the supporting schedules) have Federal regulatory authority and is true and correct.
been prepared in conformance with the instrucitons issued by
the appropriate Federal regulatory authority and are true to /s/
the best of my knowledge and belief. ----------------------------------------------------------------
Director (Trustee)
/s/ WILLIAM C. MERNE
- ---------------------------------------------------------------- /s/
Signature of Officer Authorized to Sign Report ----------------------------------------------------------------
Director (Trustee)
July 29, 1994
- ---------------------------------------------------------------- ----------------------------------------------------------------
Date of Signature Director (Trustee)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the NATIONAL BANKS: Return the original only in the special return
appropriate Federal Reserve District Bank. address envelope provided. If express mail is used in lieu of
the special return address envelope, return the original only to
STATE NONMEMBER BANKS: Return the original only in the special the FDIC, c/o Quality Data Systems, 2139 Espey Court, Crofton,
return address envelope provided. If express mail is used in MD 21114.
lieu of the special return address envelope, return the original
only to the FDIC, c/o Quality Data Systems, 2139 Espey Court,
Crofton, MD 21114.
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number 21843
-----------
(RCRI B050)
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-1
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1994 - JUNE 30, 1994
All Report of Income Schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI--INCOME STATEMENT
<TABLE>
<CAPTION>
I480 (-
-------- ----
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- --------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate. . . . . . . . . . . . . . . . . . . 4011 4,818 1.a.(1)(a)
(b) Loans to depository institutions. . . . . . . . . . . . . . . . . 4019 251 1.a.(1)(b)
(c) Loans to finance agricultural production
and other loans to farmers . . . . . . . . . . . . . . . . . . . 4024 0 1.a.(1)(c)
(d) Commercial and industrial loans . . . . . . . . . . . . . . . . . 4012 34,636 1.a.(1)(d)
(e) Acceptances of other banks. . . . . . . . . . . . . . . . . . . . 4026 0 1.a.(1)(e)
(f) Loans to individuals for household,
family, and other personal
expenditures:
(1) Credit cards and related plans. . . . . . . . . . . . . . . . 4054 0 1.a.(1)(f)(1)
(2) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4055 106 1.a.(1)(f)(2)
(g) Loans to foreign governments and official
institutions. . . . . . . . . . . . . . . . . . . . . . . . . . . 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and
leases) of states and political sub-
divisions in the U.S.:
(1) Taxable obligations . . . . . . . . . . . . . . . . . . . . . 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations. . . . . . . . . . . . . . . . . . . . 4504 376 1.a.(1)(h)(2)
(i) All other loans in domestic offices . . . . . . . . . . . . . . . 4058 1,266 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement
subsidiaries, and IBFs. . . . . . . . . . . . . . . . . . . . . . . . 4059 3,262 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4505 4,924 1.b.(1)
(2) Tax-exempt leases . . . . . . . . . . . . . . . . . . . . . . . . . . 4307 0 1.b.(2)
c. Interest income on balances due from depository
institutions:(1)
(1) In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . 4105 2 1.c.(1)
(2) In foreign offices, Edge and Agreement
subsidiaries, and IBFs. . . . . . . . . . . . . . . . . . . . . . . . 4106 3,622 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government
agency and corporation obligations. . . . . . . . . . . . . . . . . . 4027 642 1.d.(1)
(2) Securities issued by states and political
subdivisions in the U.S.:
(a) Taxable securities. . . . . . . . . . . . . . . . . . . . . . . . 4506 0 1.d.(2)(a)
(b) Tax-exempt securities . . . . . . . . . . . . . . . . . . . . . . 4507 0 1.d.(2)(b)
(3) Other domestic debt securities. . . . . . . . . . . . . . . . . . . . 3657 1,630 1.d.(3)
(4) Foreign debt securities . . . . . . . . . . . . . . . . . . . . . . . 3658 1,289 1.d.(4)
(5) Equity securities (including investments
in mutual funds). . . . . . . . . . . . . . . . . . . . . . . . . . . 3659 0 1.d.(5)
e. Interest income from assets held in trading accounts . . . . . . . . . . 4069 0 1.e.
</TABLE>
___________________
(1) Includes interest income on time certificates of deposit not held in
trading accounts.
<PAGE> 32
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-2
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS YEAR-TO-DATE
- --------------------------------------------------------------------------------- ------------
RIAD BIL MIL THOU
---- ------------
<S> <C> <C> <C>
1. Interest income (continued)
f. Interest income on federal funds sold and securities purchase under
agreements to resell in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs. . . . . . . . . . . . . . 4020 1,922 1.f.
g. Total interest income (sum of items 1.a through 1.f). . . . . . . . . . 4107 58,746 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts and
telephone and preauthorized transfer accounts) . . . . . . . . 4508 79 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) . . . . . . . . . . 4509 23 2.a.(1)(b)(1)
(2) Other savings deposits . . . . . . . . . . . . . . . . . . 4511 184 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more . . . . . 4174 278 2.a.(1)(b)(3)
(4) All other time deposits. . . . . . . . . . . . . . . . . . 4512 98 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . . . . . 4172 16,811 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBFs . . . . . . . . . . 4180 129 2.b.
c. Interest on demand notes issued to the U.S. Treasury and on
other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . 4185 19,641 2.c.
d. Interest on mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . . . . . . . . . . 4072 0 2.d.
e. Interest on subordinated notes and debentures . . . . . . . . . . . . . 4200 2,030 2.e.
f. Total interest expense (sum of items 2.a through 2.e) . . . . . . . . . 4073 39,273 2.f
3. Net interest income (item 1.g minus 2.f). . . . . . . . . . . . . . . . . . RIAD 4074 19,473 3.
4. Provisions:
a. Provision for loan and lease losses . . . . . . . . . . . . . . . . . . RIAD 4230 1,500 4.a.
b. Provision for allocated transfer risk . . . . . . . . . . . . . . . . . RIAD 4243 0 4.b.
5. Noninterest income:
a. Income from fiduciary activities . . . . . . . . . . . . . . . . . . . 4070 3,607 5.a.
b. Service charges on deposit accounts in domestic offices . . . . . . . . 4080 137 5.b.
c. Trading gains (losses) and fees from foreign exchange transactions. . . 4075 0 5.c.
d. Other foreign transaction gains (losses) . . . . . . . . . . . . . . . 4076 151 5.d.
e. Gains (losses) and fees from assets held in trading accounts. . . . . . 4077 0 5.e.
f. Other noninterest income:
(1) Other fee income . . . . . . . . . . . . . . . . . . . . . . . . . 5407 2,716 5.f.(1)
(2) All other noninterest income* . . . . . . . . . . . . . . . . . . 5408 330 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) . . . . . . . . RIAD 4079 6,941 5.g.
6. a. Realized gains (losses) on held-to-maturity securities . . . . . . . . RIAD 3521 0 6.a.
b. Realized gains (losses) on available-for-sale securities . . . . . . . RIAD 3196 5,390 6.b.
7. Noninterest expense:
a. Salaries and employee benefits. . . . . . . . . . . . . . . . . . . . . 4135 7,835 7.a.
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest). . . . 4217 1,633 7.b.
c. Other noninterest expense* . . . . . . . . . . . . . . . . . . . . . . 4092 8,240 7.c
d. Total noninterest expense (sum of items 7.a through 7.c). . . . . . . . RIAD 4093 17,708 7.d.
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) . RIAD 4301 12,596 8.
9. Applicable income taxes (on item 8) . . . . . . . . . . . . . . . . . . . . RIAD 4302 4,926 9.
10. Income (loss) before extraordinary items and other adjustments
(item 8 minus 9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIAD 4300 7,670 10.
</TABLE>
___________________
* Describe on Schedule RI-E--Explanations.
<PAGE> 33
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-3
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI--CONTINUED
<TABLE>
<CAPTION>
YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- -------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C> <C> <C>
11. Extraordinary items and other adjustments:
a. Extraordinary items and other adjustments, gross of
income taxes* . . . . . . . . . . . . . . . . . . . . . . . . . . . 4310 0 11. a.
b. Applicable income taxes (on item 11.a)* . . . . . . . . . . . . . . 4315 0 11. b.
c. Extraordinary items and other adjustments, net of income taxes
(item 11.a minus 11.b). . . . . . . . . . . . . . . . . . . . . . . RIAD 4320 0 11.c.
12. Net income (loss) (sum of items 10 and 11.c) . . . . . . . . . . . . . RIAD 4320 7,670 12.
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- -------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases
acquired after August 7, 1986, that is not deductible for federal income
tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4513 0 M.1.
2. Fee income from the sale and servicing of mutual funds and annuities in
domestic offices (included in Schedule RI, item 5.g) . . . . . . . . . . . . . . . . . . 8431 0 M.2.
3. Estimated foreign tax credit included in applicable income taxes, items 9
and 11.b above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4309 0 M.3.
4. To be completed only by banks with $1 billion or more in total assets:
Taxable equivalent adjustment to "Income (loss) before income taxes and
extraordinary items and other adjustments" (item 8 above) . . . . . . . . . . . . . . . 1244 479 M.4.
5. Number of full-time equivalent employees on payroll at end of current Number
period (round to nearest whole number) . . . . . . . . . . . . . . . . . . . . . . . . . 4150 115 M.5.
</TABLE>
SCHEDULE RI-A--CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
I483 (-
-------- ------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- -------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
1. Total equity capital originally reported in the December 31, 1993, Reports of
Condition and Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3215 257,616 1.
2. Equity capital adjustments from amended Reports of Income, net* . . . . . . . . . . . . 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) . . . . . . . . . . 3217 257,616 3.
4. Net income (loss) (must equal Schedule RI, item 12) . . . . . . . . . . . . . . . . . . 4340 7,670 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net . . . . . . . . . . . 4346 0 5.
6. Changes incident to business combinations, net . . . . . . . . . . . . . . . . . . . . . 4356 0 6.
7. LESS: Cash dividends declared on preferred stock . . . . . . . . . . . . . . . . . . . . 4470 0 7.
8. LESS: Cash dividends declared on common stock. . . . . . . . . . . . . . . . . . . . . . 4460 0 8.
9. Cumulative effect of changes in accounting principles from prior years* (see
instructions for this schedule). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4411 0 9.
10. Correction of material accounting errors from prior years* (see instructions for
this schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities . . . . 8433 158 11.
12. Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5, 7,
or 8 above). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4415 0 13.
14. Total equity capital end of current period (sum of items 3 through 13)
(must equal Schedule RC, item 28). . . . . . . . . . . . . . . . . . . . . . . . . . . . 3210 265,444 14.
</TABLE>
____________________
* Describe on Schedule RI-E--Explanations.
<PAGE> 34
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-4
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES AND CHANGES IN ALLOWANCE
FOR LOAN AND LEASE LOSSES
Part I. Charge-offs and Recoveries on Loans and Leases
Part I excludes charge-offs and recoveries through
the allocated transfer risk reserve.
<TABLE>
<CAPTION>
I486 (-
-------- ------
(COLUMN A) (COLUMN B)
CHARGE-OFFS RECOVERIES
-------------------- ---------------------
CALENDAR YEAR-TO-DATE
-----------------------------------------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU RIAD BIL MIL THOU
- ---------------------------------------------------------------------- ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) . . . . . . . . . . . . . . . . . 4651 0 4661 0 1.a.
b. To non-U.S. addressees (domicile) . . . . . . . . . . . . . . . 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of
other banks:
a. To U.S. banks and other U.S. depository institutions. . . . . . 4653 0 4663 0 2.a.
b. To foreign banks . . . . . . . . . . . . . . . . . . . . . . . 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other
loans to farmers . . . . . . . . . . . . . . . . . . . . . . . . . 4655 0 4665 0 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) . . . . . . . . . . . . . . . . . 4645 60 4617 0 4.a.
b. To non-U.S. addressees (domicile) . . . . . . . . . . . . . . . 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other
personal expenditures:
a. Credit cards and related plans . . . . . . . . . . . . . . . . 4656 0 4666 0 5.a.
b. Other (includes single payment, installment,
and all student loans) . . . . . . . . . . . . . . . . . . . . 4657 0 4667 0 5.b.
6. Loans to foreign governments and official institutions . . . . . . 4643 3,664 4627 0 6.
7. All other loans . . . . . . . . . . . . . . . . . . . . . . . . . 4644 0 4628 0 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile) . . . . . . . . . . . . . . . . . 4658 0 4558 0 8.a.
b. Of non-U.S. addressees (domicile) . . . . . . . . . . . . . . . 4659 0 4559 0 8.b.
9. Total (sum of items 1 through 8) . . . . . . . . . . . . . . . . . 4635 3,724 4605 0 9.
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
CHARGE-OFFS RECOVERIES
JAN. 1, 1986 JAN. 1, 1986
THROUGH THROUGH
DEC. 31, 1989 REPORT DATE
MEMORANDA -------------------- --------------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU RIAD BIL MIL THOU
- ---------------------------------------------------------------------- ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
To be completed by national banks only.
1. Charge-offs and recoveries of Special-Category Loans, as
defined for this Call Report by the Comptroller
of the Currency . . . . . . . . . . . . . . . . . . . . . . . . . 4784 N/A M.1.
</TABLE>
<TABLE>
<CAPTION>
(COLUMN A) (COLUMN B)
MEMORANDUM ITEMS 2 AND 3 ARE TO BE COMPLETED BY ALL BANKS. CHARGE-OFFS RECOVERIES
-------------------- --------------------
CALENDAR YEAR-TO-DATE
----------------------------------------------
RIAD BIL MIL THOU RIAD BIL MIL THOU
---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
2. Loans to finance commercial real estate, construction, and
land development activities (not secured by real estate)
included in Schedule RI-B, part I, items 4 and 7, above . . . . . 5409 0 5410 0 M.2.
3. Loans secured by real estate in domestic offices (included
in Schedule RI-B, part I, item 1, above):
a. Construction and land development . . . . . . . . . . . . . . . 3582 0 3583 0 M.3.a.
b. Secured by farmland . . . . . . . . . . . . . . . . . . . . . . 3584 0 3585 0 M.3.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family
residential properties and extended under lines
of credit . . . . . . . . . . . . . . . . . . . . . . . . . 5411 0 5412 0 M.3.c.(1)
(2) All other loans secured by 1-4 family residential
properties . . . . . . . . . . . . . . . . . . . . . . . . 5413 0 5414 0 M.3.c.(2)
d. Secured by multifamily (5 or more) residential properties . . 3588 0 3589 0 M.3.d.
e. Secured by nonfarm nonresidential properties . . . . . . . . . 3590 0 3591 0 M.3.e.
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-5
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI-B--CONTINUED
Part II. Changes in Allowance for Loan and
Lease Losses and in Allocated
Transfer Risk Reserve
<TABLE>
<CAPTION>
(COLUMN A) (COLUMN B)
ALLOWANCE FOR ALLOCATED
LOAN AND LEASE TRANSFER RISK
LOSSES RESERVE
------------------ ------------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU RIAD BIL MIL THOU
- ---------------------------------------------------------------------------- ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
1. Balance originally reported in the December 31,
1993, Reports of Condition and Income . . . . . . . . . . . . . . . . . 3124 49,012 3131 0 1.
2. Recoveries (column A must equal part I, item 9,
column B above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4605 0 3132 0 2.
3. LESS: Charge-offs (column A must equal part I, item 9,
column A above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4635 3,724 3133 0 3.
4. Provision (column A must equal Schedule RI, item 4.a;
column B must equal Schedule RI, item 4.b). . . . . . . . . . . . . . . 4230 1,500 4243 0 4.
5. Adjustments* (see instructions for this schedule) . . . . . . . . . . . 4815 (4,423) 3134 0 5.
6. Balance end of current period (sum of items 1 through 5)
(column A must equal Schedule RC, item 4.b; column B
must equal Schedule RC, item 4.c) . . . . . . . . . . . . . . . . . . . 3123 42,365 3128 0 6.
</TABLE>
_____________
* Describe on Schedule RI-E--Explanations.
SCHEDULE RI-C--APPLICABLE INCOME TAXES BY TAXING AUTHORITY
Schedule RI-C is to be reported with the December Report of Income.
<TABLE>
<CAPTION>
I489 (-
-------- ----
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ------------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C> <C>
1. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4780 N/A 1.
2. State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4790 N/A 2.
3. Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4795 N/A 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) . . . . . 4770 N/A 4.
5. Deferred portion of item 4 . . . . . . . . . . . . . . . . . . . . . . . RIAD 4772 N/A 5.
</TABLE>
<PAGE> 36
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-6
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
Part I. Estimated Income from International Operations
<TABLE>
<CAPTION>
I492 (-
-------- ------
YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement
subsidiaries, and IBFs:
a. Interest income booked. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4837 4,926 1.a.
b. Interest expense booked . . . . . . . . . . . . . . . . . . . . . . . . . . . 4838 17,252 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement
subsidiaries, and IBFs (item 1.a minus 1.b) . . . . . . . . . . . . . . . . . 4839 (12,326) 1.c.
2. Adjustments for booking location of international operations:
a. Net interest income attributable to international operations
booked at domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . 4840 17,899 2.a.
b. Net interest income attributable to domestic business booked
at foreign offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4841 2,879 2.b.
c. Net booking location adjustment (item 2.a minus 2.b). . . . . . . . . . . . . 4842 15,020 2.c.
3. Noninterest income and expense attributable to international
operations:
a. Noninterest income attributable to international operations . . . . . . . . . 4097 540 3.a.
b. Provision for loan and lease losses attributable to
international operations. . . . . . . . . . . . . . . . . . . . . . . . . . . 4235 500 3.b.
c. Other noninterest expense attributable to international
operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4239 79 3.c.
d. Net noninterest income (expense) attributable to
international operations (item 3.a minus 3.b and 3.c) . . . . . . . . . . . . 4843 (39) 3.d.
4. Estimated pretax income attributable to international operations before
capital allocation adjustment (sum of items 1.c, 2.c, and 3.d) . . . . . . . . . 4844 2,655 4.
5. Adjustment to pretax income for internal allocations to international
operations to reflect the effects of equity capital on overall bank
funding costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4845 (1,377) 5.
6. Estimated pretax income attributable to international operations after
capital allocation adjustment (sum of items 4 and 5) . . . . . . . . . . . . . . 4846 1,278 6.
7. Income taxes attributable to income from international operations as
estimated in item 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4797 549 7.
8. Estimated net income attributable to international operations
(item 6 minus 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4341 729 8.
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ------------------------------------------------------------------------------------ ---- ------------
<S> <C> <C> <C>
1. Intracompany interest income included in item 1.a above . . . . . . . . . . . . 4847 3,830 M.1.
2. Intracompany interest expense included in item 1.b above . . . . . . . . . . . . 4848 6,065 M.2.
</TABLE>
Part II. Supplementary Details on Income from International Operations
Required by the Departments of Commerce and Treasury for Purposes of the U.S.
International Accounts and the U.S. National Income and Product Accounts
<TABLE>
YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ------------------------------------------------------------------------------------ ---- ------------
<S> <C> <C> <C>
1. Interest income booked at IBFs . . . . . . . . . . . . . . . . . . . . . . . . . 4849 3,317 1.
2. Interest expense booked at IBFs . . . . . . . . . . . . . . . . . . . . . . . . 4850 9,179 2.
3. Noninterest income attributable to international operations booked at
domestic offices (excluding IBFs):
a. Gains (losses) and extraordinary items . . . . . . . . . . . . . . . . . . . 5491 0 3.a.
b. Fees and other noninterest income . . . . . . . . . . . . . . . . . . . . . . 5492 540 3.b.
4. Provision for loan and lease losses attributable to international operations
booked at domestic offices (excluding IBFs) . . . . . . . . . . . . . . . . . . 4852 500 4.
5. Other noninterest expense attributable to international operations
booked at domestic offices (excluding IBFs) . . . . . . . . . . . . . . . . . . 4853 78 5.
</TABLE>
<PAGE> 37
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-7
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI-E--EXPLANATIONS
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other
noninterest income and other noninterest expense in Schedule RI. (See
instructions for details.)
<TABLE>
<CAPTION> I495 (-
-------- -------
YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains on other real estate owned . . . . . . . . . . . . . . . . . . . . . 5415 0 1.a.
b. Net gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . 5416 0 1.b.
c. Net gains on sales of premises and fixed assets. . . . . . . . . . . . . . . . 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 5.f.(2):
d. TEXT 4461 ____________________________________________________________________ 4461 1.d.
e. TEXT 4462 ____________________________________________________________________ 4462 1.e.
f. TEXT 4463 ____________________________________________________________________ 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets . . . . . . . . . . . . . . . . . . 4531 0 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net losses on other real estate owned . . . . . . . . . . . . . . . . . . . . 5418 0 2.b.
c. Net losses on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . 5419 0 2.c.
d. Net losses on sales of premises and fixed assets . . . . . . . . . . . . . . . 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of
Schedule RI, item 7.c:
e. TEXT 4464 ____________________________________________________________________ 4464 2.e.
f. TEXT 4467 ____________________________________________________________________ 4467 2.f.
g. TEXT 4468 ____________________________________________________________________ 4468 2.g.
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and
applicable income tax effect (from Schedule RI, item 11.b) (itemize and
describe all extraordinary items and other adjustments):
a. (1) TEXT 4469 ________________________________________________________________ 4469 3.a.(1)
(2) Applicable income tax effect RIAD 4486 3.a.(2)
b. (1) TEXT 4487 ________________________________________________________________ 4487 3.b.(1)
(2) Applicable income tax effect RIAD 4488 3.b.(2)
c. (1) TEXT 4489 ________________________________________________________________ 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 3.c.(2)
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A,
item 2) (itemize and describe all adjustments):
a. TEXT 4492 ____________________________________________________________________ 4492 4.a.
b. TEXT 4493 ____________________________________________________________________ 4493 4.b.
5. Cumulative effect of changes in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting
principles):
a. TEXT 4494 ____________________________________________________________________ 4494 5.a.
b. TEXT 4495 ____________________________________________________________________ 4495 5.b.
6. Corrections of material accounting errors from prior years (from Schedule RI-A,
item 10) (itemize and describe all corrections):
a. TEXT 4496 ____________________________________________________________________ 4496 6.a.
b. TEXT 4497 ____________________________________________________________________ 4497 6.b.
</TABLE>
<PAGE> 38
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RI-8
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RI-E--CONTINUED
<TABLE>
<CAPTION>
YEAR-TO-DATE
------------
DOLLAR AMOUNTS IN THOUSANDS RIAD BIL MIL THOU
- ---------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
a. TEXT 4498 _____________________________________________________________________________ 4498 7.a.
b. TEXT 4499 _____________________________________________________________________________ 4499 7.b.
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II,
item 5) (itemize and describe all adjustments):
a. TEXT 4521 Implementation of FASB 115 as of January 1, 1994 4521 (4,423) 8.a.
b. TEXT 4522 _____________________________________________________________________________ 4522 8.b.
9. Other explanations (the space below is provided for the bank to briefly describe, I498 I499 (-
at its option, any other significant items affecting the Report of Income):
No comment /X/ (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
<PAGE> 39
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RC-1
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 (-
-------- ------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU
- --------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . . . . . . . . . . . . 0081 23,545 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0071 207,100 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) . . . . . . . . . . . . . 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D). . . . . . . . . . . . . 1773 70,601 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and its Edge and Agreement subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0276 86,000 3.a.
b. Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . 0277 0 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) . RCFD 2122 1,854,381 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . RCFD 3123 42,365 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . . . . 2125 1,812,016 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3545 0 5.
6. Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . 2145 2,921 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule
RC-M) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . 2155 5,990 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . . . . 2143 0 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2160 39,839 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . . . . . . . . . . . . 2170 2,248,012 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 40
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RC-2
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU
- --------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCON 2200 162,102 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . RCON 6631 102,215 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCON 6636 59,887 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule
RC-E, part II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFN 2200 735,458 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . . . . . RCFN 6631 0 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCFN 6636 735,458 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 0278 0 14.a.
b. Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . RCFD 0279 0 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . RCON 2840 0 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3548 0 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . . . . . . . . . . . RCFD 2332 692,984 16.a.
b. With original maturity of more than one year . . . . . . . . . . . . . . . . . RCFD 2333 259,507 16.b.
17. Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . RCFD 2910 0 17.
18. Bank's liability on acceptance executed and outstanding . . . . . . . . . . . . . RCFD 2920 5,990 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3200 100,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . . . . . . . . RCFD 2930 26,527 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . . . . . . . . RCFD 2948 1,982,568 21.
22. Limited-Life preferred stock and related surplus . . . . . . . . . . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 98,475 24.
25. Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . . RCFD 3839 153,975 25.
26. a. Undivided profits and capital reserves. . . . . . . . . . . . . . . . . . . . . RCFD 3632 12,836 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities . . . . RCFD 8434 158 26.b.
27. Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . . . . . . . . . . . RCFD 3210 265,444 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items
21, 22, and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3300 2,248,012 29.
</TABLE>
<TABLE>
<S> <C> <C>
MEMORANDUM
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date during 1993 . . . . . . . . . RCFD 6724 N/A M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 41
<TABLE>
<S> <C> <C>
Legal Title of Bank: THE FUJI BANK AND TRUST COMPANY Call Date: 6/30/94 ST-BK: 36-5168 FFIEC 031
Address: TWO WORLD TRADE CENTER, 79TH-82ND FL Page RC-3
City, State Zip: NEW YORK, NY 10048
FDIC Certificate No.: /2/1/8/4/3/
-----------
</TABLE>
SCHEDULE RC-A--CASH AND BALANCED DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held in trading accounts.
<TABLE>
<CAPTION>
C405 (-
------- ----
(COLUMN A) (COLUMN B)
CONSOLIDATED DOMESTIC
BANK BANK
------------------- -------------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU RCON BIL MIL THOU
- -------------------------------------------------------------------------------- ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and
coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0022 6,573 1.
a. Cash items in process of collection and unposted debits . . . . . . . . . 0020 6,331 1.a.
b. Currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0080 242 1.b.
2. Balances due from depository institutions in the U.S. . . . . . . . . . . . 0082 12,141 2.
a. U.S. branches and agencies of foreign banks (including their IBFs) . . . 0083 207,000 2.a.
b. Other commercial banks in the U.S. and other depository institutions
in the U.S. (including their IBFs) . . . . . . . . . . . . . . . . . . . 0085 12,141 2.b.
3. Balances due from banks in foreign countries and foreign central banks . . . 0070 0 3.
a. Foreign branches of other U.S. banks . . . . . . . . . . . . . . . . . . 0073 0 3.a.
b. Other banks in foreign countries and foreign central banks . . . . . . . 0074 0 3.b.
4. Balances due from Federal Reserve Banks . . . . . . . . . . . . . . . . . . 0090 4,931 0090 4,931 4.
5. Total (sum of items 1 through 4) (total of column A must equal
Schedule RC, sum of items 1.a and 1.b) . . . . . . . . . . . . . . . . . . . 0010 230,645 0010 23,645 5.
</TABLE>
<TABLE>
<CAPTION>
MEMORANDUM DOLLAR AMOUNTS IN THOUSANDS RCON BIL MIL THOU
- -------------------------------------------------------------------------------------------------------- ---- ------------
<S> <C> <C> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2,
column B above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0050 12,041 M.1.
</TABLE>
<PAGE> 1
CONFORMED COPY
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
______________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
______________________
PREMIER AUTO TRUST 1994-5 AND OTHER PREMIER
AUTO TRUSTS THAT ISSUE NOTES UNDER
THE RELATED PROSPECTUS AND PROSPECTUS SUPPLEMENT
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Chemical Bank Delaware
1201 Market Street
9th Floor
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip code)
______________________
Asset Backed Notes
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affilia-
tion.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 28th day of September, 1994.
THE BANK OF NEW YORK
By: MARY JANE MORRISSEY
-----------------------------------
Name: Mary Jane Morrissey
Title: Assistant Vice President
-4-
<PAGE> 5
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1994, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,071,756
Interest-bearing balances .......... 695,722
Securities:
Held-to-maturity securities ........ 1,396,356
Available-for-sale securities ...... 1,495,522
Federal funds sold in domestic
offices of the bank ................ 874,129
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................25,607,366
LESS: Allowance for loan and
lease losses ..............688,226
LESS: Allocated transfer risk
reserve .....................29,781
Loans and leases, net of unearned
income, allowance, and reserve.... 24,889,359
Assets held in trading accounts ...... 2,427,515
Premises and fixed assets (including
capitalized leases) ................ 634,514
Other real estate owned .............. 51,996
Investments in unconsolidated
subsidiaries and associated
companies .......................... 164,558
Customers' liability to this bank on
acceptances outstanding ............ 1,212,402
Intangible assets .................... 80,153
Other assets ......................... 1,512,404
-----------
Total assets ......................... $42,506,386
===========
LIABILITIES
Deposits:
In domestic offices ................ $19,454,858
Noninterest-bearing .......7,576,391
Interest-bearing .........11,878,467
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,753,958
Noninterest-bearing ..........51,653
Interest-bearing ..........10,702,305
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,150,270
Securities sold under agreements
to repurchase .................... 49,603
Demand notes issued to the U.S.
Treasury ........................... 300,000
Trading liabilities .................. 1,757,487
Other borrowed money:
With original maturity of one year
or less .......................... 2,452,009
With original maturity of more than
one year ......................... 33,969
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,212,877
Subordinated notes and debentures .... 1,062,320
Other liabilities .................... 1,348,031
-----------
Total liabilities .................... 39,575,382
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,495,590
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ (26,172)
Cumulative foreign currency transla-
tion adjustments .................. (6,364)
-----------
Total equity capital ................ 2,931,004
-----------
Total liabilities and equity
capital ........................... $42,506,386
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
+
Alan R. Griffith |
Thomas A. Renyi | Directors
J. Carter Bacot |
+
<PAGE> 1
Exhibit 99.1
================================================================================
FORM OF SALE AND SERVICING AGREEMENT
among
PREMIER AUTO TRUST 199___
Issuer,
CHRYSLER FINANCIAL CORPORATION,
Seller,
and
CHRYSLER CREDIT CORPORATION,
Servicer
Dated as of , 199_
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Initial Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.02. Conveyance of Subsequent Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.03. Conveyance of Fixed Value Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.04. Fixed Value Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.05. Purchase of Eligible Investment Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the Seller with
Respect to the Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.02. Repurchase upon Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.03. Custody of Receivable Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.04. Duties of Servicer as Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.05. Instructions; Authority To Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.06. Custodian's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.07. Effective Period and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.02. Collection and Allocation of Receivable Payments . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.03. Realization upon Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.04. Physical Damage Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.06. Covenants of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.07. Purchase of Receivables upon Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.08. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.09. Servicer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.10. Annual Statement as to Compliance; Notice of Default . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.11. Annual Independent Certified Public Accountants' Report . . . . . . . . . . . . . . . . . . . 41
SECTION 4.12. Access to Certain Documentation and Information Regarding Receivables . . . . . . . . . . . . 42
SECTION 4.13. Servicer Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.14. Appointment of Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.02. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.03. Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.04. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.05. Additional Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.06. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.07. Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.08. Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.09. Statements to Certificateholders and Noteholders . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.10. Net Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
[SECTION 5.11. Transfer of the Class A-1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53]
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.02. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.03. Liability of Seller; Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.04. Merger or Consolidation of, or Assumption of
the Obligations of, Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.05. Limitation on Liability of Seller and Others . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.06. Seller May Own Certificates or Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.02. Indemnities of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer . . . . . . . . . . 59
SECTION 7.04. Limitation on Liability of Servicer and Others . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.05. CCC Not To Resign as Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VIII
Default
SECTION 8.01. Servicer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.02. Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.03. Repayment of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.04. Notification to Noteholders and Certificateholders . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.05. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.02. Protection of Title to Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.04. Assignment by the Seller or the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.05. Limitations on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.07. Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.10. Assignment by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.11. Nonpetition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee . . . . . . . . . . . . . . . . 69
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of Eligible Investment Receivables
EXHIBIT A Form of Distribution Date Statement to Certificateholders
EXHIBIT B Form of Distribution Date Statement to Noteholders
EXHIBIT A-1 Form of Reconciliation Date Statement to Certificateholders
EXHIBIT B-1 Form of Reconciliation Date Statement to Noteholders
EXHIBIT C Form of Servicer's Certificate
EXHIBIT D Form of Subsequent Transfer Assignment for Receivables
EXHIBIT E Form of Accountants' Letter
EXHIBIT F Form of Eligible Investment Transfer Assignment
</TABLE>
iii
<PAGE> 5
SALE AND SERVICING AGREEMENT dated as of __________, 199_, among
PREMIER AUTO TRUST 199_, a Delaware business trust (the "Issuer"),
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the "Seller"),
and CHRYSLER CREDIT CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by Chrysler Credit Corporation in the ordinary course of business and
sold to the Seller;
WHEREAS the Seller is willing to sell such receivables to the Issuer;
and
WHEREAS Chrysler Credit Corporation is willing to service such
receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accelerated Principal Distribution Amount" means, with respect to any
Distribution Date and the related Reconciliation Determination Date, an amount
equal to the portion of the Total Distribution Amount for such Distribution
Date or Reconciliation Determination Date, as applicable, that remains after
the payment of (i) the Servicing Fee, (ii) the Noteholders' Interest
Distributable Amount, (iii) the Regular Principal Distribution Amount, (iv) the
Certificateholders' Interest Distributable Amount, and (v) the amount, if any,
required to be deposited into the Reserve Account on such Distribution Date
pursuant to Section 5.06(b)(ii)(F).
"Additional Amount" means the aggregate of all amounts required to be
deposited to the Reserve Account in connection with any conveyance of
Subsequent Receivables pursuant to Section 2.02.
"Advance" means either a Precomputed Advance or Simple Interest
Advance or both, as applicable.
"Amortizing Payment" means with respect to each Fixed Value Receivable
or Eligible Investment Fixed Value Receivable and each Collection Period prior
to the date on which the Fixed Value Payment is due, the amount specified 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
the Seller or purchase by the Servicer the Amortizing Payment
<PAGE> 6
shall be equal to the aggregate "Amount of Each Payment" that has not
yet been paid for the period through and including the last payment prior to
the date when the Fixed Value Payment is due less the amount of the unearned
finance charges under the related Contract allocable to such amount in
accordance with the Servicer's customary procedures.
"Amount Financed" means (i) with respect to a Standard Receivable or
Eligible Investment Standard Receivable, as applicable, the amount advanced
under the Standard Receivable or Eligible Investment Standard Receivable, as
applicable, toward the purchase price of the Financed Vehicle and any related
costs, exclusive of any amount allocable to the premium of force-placed
physical damage insurance covering the Financed Vehicle; and (ii) with respect
to a Fixed Value Receivable or Eligible Investment Fixed Value Receivable, as
applicable, an amount equal to the present value of the fixed level payment
monthly installments (not including the amount designated as the Fixed Value
Payment) under the Fixed Value Receivable or Eligible Investment Fixed Value
Receivable, as applicable, assuming that each payment is made on the due date
in the month in which such payment is due, discounted at the APR for such Fixed
Value Receivable or Eligible Investment Fixed Value Receivable, as applicable.
"Annual Percentage Rate" or "APR" of a Receivable or Eligible
Investment Receivable means the annual rate of finance charges stated in the
related Contract.
"Available Amount" means, with respect to any Distribution Date and
the related Reconciliation Determination Date, the amount of funds on deposit
in the Reserve Account on such Distribution Date or Reconciliation
Determination Date (other than Investment Earnings) less the Certificate
Interest Reserve Amount with respect to such Distribution Date or
Reconciliation Determination Date, in each case, before giving effect to any
reduction thereto on such date.
"CCC" means Chrysler Credit Corporation, a Delaware corporation, or
its successors.
"Certificate Balance" equals, initially, $__________ and, thereafter,
equals the Initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such
term in the Trust Agreement.
"Certificate Pool Factor" means, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Distribution Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificateholders" has the meaning assigned to such term in the
Trust Agreement.
2
<PAGE> 7
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount for such date.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus 30 days' interest on such excess, to the extent
permitted by law, at the Pass-Through Rate.
"Certificateholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution Date.
Interest with respect to the Certificates shall be computed on the basis of a
360-day year consisting of twelve 30-day months for all purposes of this
Agreement and the Basic Documents.
"Certificateholders' Monthly Interest Distributable Amount" means,
with respect to any Distribution Date, 30 days of interest (or, in the case of
the first Distribution Date, interest accrued from and including the Closing
Date to but excluding such Distribution Date) at the Pass-Through Rate on the
Certificate Balance on the last day of the preceding Collection Period (or, in
the case of the first Distribution Date, on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date prior to the Distribution Date on which
the Notes are paid in full, zero; and with respect to any Distribution Date on
or after the Distribution Date on which the Notes are paid in full, the Regular
Principal Distribution Amount for such Distribution Date (less, on the
Distribution Date on which the Notes are paid in full, the portion thereof
payable on the Notes) plus the Certificateholders' Reconciliation Principal
Adjustment Amount (which may be a positive or negative number) for the
immediately preceding Distribution Date.
"Certificateholders' Prepayment Premium" means an amount equal to the
excess, if any, discounted as described below, of (i) the amount of interest
that would accrue on the Pre-Funded Percentage with respect to the Certificates
of any remaining Pre-Funded Amount (the "Certificate Prepayment Amount") at the
Pass-Through Rate during the period commencing on and including the
Distribution Date on which such Certificate Prepayment Amount is required to be
deposited in the Certificate Distribution Account pursuant to Section
5.08(b)(ii)(B) to but excluding _______________, over (ii) the amount of
interest that would have accrued on such Certificate Prepayment Amount over the
same period at a per annum rate of interest equal to the bond equivalent yield
to maturity on the Determination Date preceding such Distribution Date on the
________________. Such excess shall be discounted on a monthly basis to
present value to such Distribution Date at the yield described in clause (ii)
above. Notwithstanding the foregoing, if such total remaining Pre-Funded
Amount on such Distribution Date is equal to or less than $100,000, then the
Certificateholders' Prepayment Premium shall be zero.
3
<PAGE> 8
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the Certificateholders'
Principal Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Final Scheduled Distribution Date, the principal required to
be included in the Certificateholders' Principal Distributable Amount will
include the lesser of (a) (i) any Scheduled Payments of principal due and
remaining unpaid on each Precomputed Receivable and (ii) any principal due and
remaining unpaid on each Simple Interest Receivable, in each case, in the Trust
as of the Final Scheduled Maturity Date or (b) the amount that is necessary
(after giving effect to the other amounts to be deposited in the Certificate
Distribution Account on such Distribution Date and allocable to principal) to
reduce the Certificate Balance to zero.
"Certificateholders' Reconciliation Principal Adjustment Amount"
means, with respect to each Distribution Date, the difference, if any (which
may be a positive or negative number), between the amount determined on the
related Reconciliation Determination Date to be distributable to
Certificateholders on account of principal on such Distribution Date and the
amount actually distributed to Certificateholders on account of principal on
such Distribution Date (other than the Certificateholders' Reconciliation
Principal Adjustment Amount for the prior period).
"Certificate Interest Reserve Amount" means, at the time of reference,
the lesser of (i) $____________ less the amount of any application of the
Certificate Interest Reserve Amount to pay interest on the Certificates on any
prior Distribution Date and (ii) _____% of the Certificate Balance on such
Distribution Date (before giving effect to any reduction thereon on such
Distribution Date); provided, however, that the Certificate Interest Reserve
Amount shall be zero subsequent to any reduction by any Rating Agency of its
rating of any Class of Notes to less than "A-" or its equivalent, or withdrawal
by any Rating Agency of its rating of any Class of Notes, unless such rating
has been restored.
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"CFC" means Chrysler Financial Corporation, a Michigan corporation, or
its successors.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Distribution Date" means the ______________
Distribution Date.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
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"Class A-2 Final Scheduled Distribution Date" means the _____________
Distribution Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-3 Final Scheduled Distribution Date" means the _________
Distribution Date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01.
"Collection Period" means a calendar month (or in the case of the
first Distribution Date, the period from and including ________ , 199_ to and
including ____________ , 199_). Any amount stated as of the last day of a
Collection Period or as of the first day of a Collection Period shall give
effect to the following calculations as determined as of the close of business
on such last day: (1) all applications of collections, (2) all current and
previous Payaheads, (3) all applications of Payahead Balances, (4) all Advances
and reductions of Outstanding Precomputed Advances or Outstanding Simple
Interest Advances and (4) all distributions to be made on the following
Distribution Date.
"Company" means ____________________________________, or its successor.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at ________________ ; or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders and the Seller, or
the principal corporate trust office of any successor Indenture Trustee (of
which address such successor Indenture Trustee will notify the Noteholders and
the Seller).
"Cutoff Date" means the Initial Cutoff Date or a Subsequent Cutoff
Date.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to CCC under an existing
agreement between such dealer and CCC.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery,
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<PAGE> 10
transfer thereof to the Indenture Trustee or its nominee or custodian
by physical delivery to the Indenture Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank, and, with
respect to a certificated security (as defined in Section 8-102 of the
UCC) transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or custodian or endorsed in blank to a financial
intermediary (as defined in Section 8-313 of the UCC) and the making
by such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture
Trustee or its nominee or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such certificated
security by the Indenture Trustee or its nominee or custodian, or (ii)
by delivery thereof to a "clearing corporation" (as defined in Section
8-102(3) of the UCC) and the making by such clearing corporation of
appropriate entries on its books reducing the appropriate securities
account of the transferor and increasing the appropriate securities
account of a financial intermediary by the amount of such certificated
security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the
financial intermediary, the maintenance of such certificated
securities by such clearing corporation or a "custodian bank" (as
defined in Section 8-102(4) of the UCC) or the nominee of either
subject to the clearing corporation's exclusive control, the sending
of a confirmation by the financial intermediary of the purchase by the
Indenture Trustee or its nominee or custodian of such securities and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of
ownership of any such Trust Account Property (as defined herein) to
the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles
8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary that is also a
"depository" pursuant to applicable federal regulations and issuance
by such financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee
or its nominee or custodian of such book-entry securities; the making
by such financial intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative
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procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Trust Account Property to the
Indenture Trustee or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that
is an uncertificated security under Article 8 of the UCC and that is
not governed by clause (b) above, registration on the books and
records of the issuer thereof in the name of the financial
intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such
financial intermediary of entries on its books and records identifying
such uncertificated certificates as belonging to the Indenture Trustee
or its nominee or custodian.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Distribution Date" means, with respect to each Collection Period, the
second day of the following month, or if such day is not a Business Day, the
immediately following Business Day, commencing on ______________ 199_. With
respect to a Distribution Date (referred to in this definition as the "Primary
Distribution Date") and the related Collection Period, the calculation (based
on the trial methodology specified herein) of the amounts collected in such
Collection Period that will actually be distributed or paid on such Primary
Distribution Date will be performed on the Payment Determination Date for such
Primary Distribution Date. The calculation (which will be based upon the
actual collections in the Collection Period for such Primary Distribution Date)
of reconciled amounts in respect of the amounts that were actually distributed
or paid on such Primary Distribution Date will be performed on the
Reconciliation Determination Date for such Primary Distribution Date. The
adjusted distributions and payments, or the retentions, for such Primary
Distribution Date resulting from such reconciliation on such Reconciliation
Determination Date will be effected on the Distribution Date next following
such Primary Distribution Date.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit rating
from each Rating Agency in one of its generic rating categories that signifies
investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee or _____________ so long as it shall be
Paying Agent under the Trust Agreement or (b) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), which (i) has either (A) a long-term unsecured debt rating of AAA or
better by Standard & Poor's and A1 or better by Moody's or (B) a certificate of
deposit rating of A-1+ by Standard & Poor's and P-1 or better by Moody's, or
any other long-term, short-term or certificate of deposit rating acceptable to
the Rating Agencies and (ii) whose deposits are
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insured by the FDIC. If so qualified, the Indenture Trustee, the Owner
Trustee or ____________ may be considered an Eligible Institution for the
purposes of clause (b) of this definition.
"Eligible Investment Fixed Value Receivable" means any Contract listed
on Schedule C (which Schedule may be in the form of microfiche), as such
Schedule shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer on Subsequent Transfer Dates pursuant to Section
2.05, which provides for amortization of the loan over a series of fixed level
payment monthly installments in accordance with the actuarial method, the
simple interest method or the Rule of 78s, but also requires a final payment
that is greater than the scheduled monthly payments and is due after payment of
such scheduled monthly payments and that may be made by (i) payment in full in
cash of a fixed value amount, (ii) return of the Financed Vehicle to the
Servicer provided certain conditions are satisfied or (iii) refinancing the
final fixed value payment in accordance with certain conditions.
"Eligible Investment Receivable" means (i) any Eligible Investment
Standard Receivable and (ii) the Amortizing Payments with respect to any
Eligible Investment Fixed Value Receivable.
"Eligible Investment Standard Receivable" means any Contract listed on
Schedule C (which Schedule may be in the form of microfiche), as such Schedule
shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer pursuant to Section 2.05, which is not an Eligible
Investment Fixed Value Receivable.
"Eligible Investment Transfer Assignment" has the meaning assigned
thereto in Section 2.05(b)(i).
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or
other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) thereof shall
have a credit rating from each of the Rating Agencies in the highest
investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
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(d) investments in money market funds having a rating from
each of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Indenture Trustee or the Owner
Trustee or any of their respective Affiliates is investment manager or
advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States
of America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b);
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or trust
company (acting as principal) described in clause (b) above (except
that the rating referred to in the proviso in such clause (b) shall be
A-1 or higher in the case of Standard & Poor's) (such depository
institution or trust company being referred to in this definition as a
"financial institution"), (ii) a broker/dealer (acting as principal)
registered as a broker or dealer under Section 15 of the Exchange Act
(a "broker/dealer") the unsecured short-term debt obligations of which
are rated P-1 by Moody's and at least A-1 by Standard & Poor's at the
time of entering into such repurchase obligation (a "rated
broker/dealer"), (iii) an unrated broker/dealer (an "unrated
broker/dealer"), acting as principal, that is a wholly-owned
subsidiary of a non-bank holding company the unsecured short-term debt
obligations of which are rated P-1 by Moody's and at least A-1 by
Standard & Poor's at the time of entering into such repurchase
obligation (a "Rated Holding Company") or (iv) an unrated subsidiary
(a "Guaranteed Counterparty"), acting as principal, that is a
wholly-owned subsidiary of a direct or indirect parent Rated Holding
Company, which guarantees such subsidiary's obligations under such
repurchase agreement; provided that the following conditions are
satisfied:
(A) the aggregate amount of funds invested in
repurchase obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed
Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are A-1 (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall not
exceed 20% of the sum of the then outstanding principal
balance of the Notes and the Certificate Balance (there being
no limit on the amount of funds that may be invested in
repurchase obligations in respect of which such Standard &
Poor's rating is A-1+ (in the case of an unrated broker/dealer
or Guaranteed Counterparty, such rating being that of the
related Rated Holding Company));
(B) in the case of the Reserve Account and the
Pre-Funding Account, the rating from Standard & Poor's in
respect of the unsecured short-term debt obligations of the
financial institution, rated broker/dealer, unrated
broker/dealer
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or Guaranteed Counterparty (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the related Rated
Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within
30 days of the date on which the Indenture Trustee or the
Issuer, as applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be
subordinated to any other obligation of the related financial
institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty;
(E) the collateral subject to the repurchase
obligation is held, in the appropriate form, by a custodial
bank on behalf of the Indenture Trustee or the Issuer, as
applicable;
(F) the repurchase obligation shall require that
the collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also
be satisfied:
(i) the Indenture Trustee or the Issuer,
as applicable, shall have received an opinion of
counsel (which may be in-house counsel) to the effect
that the guarantee of the related Rated Holding
Company is a legal, valid and binding agreement of
the Rated Holding Company, enforceable in accordance
with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium
or other similar laws affecting creditors' rights
generally and to general equitable principles;
(ii) the Indenture Trustee or the Issuer,
as applicable, shall have received (x) an incumbency
certificate for the signer of such guarantee,
certified by an officer of such Rated Holding Company
and (y) a resolution, certified by an officer of the
Rated Holding Company, of the board of directors (or
applicable committee thereof) of the Rated Holding
Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding
Company;
(iii) the only conditions to the
obligation of such Rated Holding Company to pay on
behalf of the Guaranteed Counterparty shall be that
the Guaranteed Counterparty shall not have paid under
such repurchase obligation when required (it being
understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Indenture Trustee or the
Issuer shall make a demand on the Rated Holding
Company to make the payment due under such guarantee;
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(iv) the guarantee of the Rated Holding
Company shall be irrevocable with respect to such
repurchase obligation and shall not be subordinated
to any other obligation of the Rated Holding Company;
and
(v) each of Standard & Poor's and
Moody's shall have confirmed in writing to the
Indenture Trustee or Issuer, as applicable, that it
has reviewed the form of the guarantee of the Rated
Holding Company and has determined that the issuance
of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes or
the Certificates.
(H) the repurchase obligation shall require that
the repurchase obligation be overcollateralized and shall
provide that, upon any failure to maintain such
overcollateralization, the repurchase obligation shall become
due and payable, and unless the repurchase obligation is
satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds
applied to satisfy the unsatisfied portion of the repurchase
obligation;
(h) Eligible Investment Receivables; provided that Eligible
Investment Receivables shall be Eligible Investments only for funds in
the Reserve Account and only to the extent of the portion of the
Specified Reserve Account Balance specified in clause (ii) of the
definition of "Specified Reserve Account Balance"; and
(i) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as an Eligible
Investment will not result in a withdrawal or downgrading of the
ratings on the Notes or Certificates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the ______ Distribution Date.
"Final Scheduled Maturity Date" means _______________ .
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable, Fixed Value Receivable or Eligible Investment
Receivable, as the case may be.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable or Eligible Investment Fixed Value Receivable, the amount specified
on the applicable Contract as the "Amount of Fixed Value Payment" reduced (i)
in the case of a prepayment or repurchase, by the amount of the unearned
finance charges under the Contract allocable to such payment in accordance with
the Servicer's customary procedures and (ii) in the case of a liquidation, by
the excess of Liquidation Proceeds collected by the Servicer over the
Amortizing Payment on such date.
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"Fixed Value Receivable" means any Contract, listed on Schedule A
(which Schedule may be in the form of microfiche), as such Schedule shall be
supplemented to reflect the transfer of Subsequent Receivables to the Issuer
pursuant to Section 2.02, which provides for amortization of the loan over a
series of fixed level payment monthly installments in accordance with the
actuarial method, the simple interest method or the Rule of 78s, but also
requires a final payment that is greater than the scheduled monthly payments
and is due after payment of such scheduled monthly payments and that may be
made by (i) payment in full in cash of a fixed value amount, (ii) return of the
Financed Vehicle to the Servicer provided certain conditions are satisfied or
(iii) refinancing the final fixed value payment in accordance with certain
conditions.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.04.
"Funding Period" means the period beginning on and including the
Closing Date and ending on the first to occur of (a) the Determination Date on
which the amount on deposit in the Pre-Funding Account (after giving effect to
any transfers therefrom in connection with the transfer of Subsequent
Receivables to the Issuer on such Determination Date) is less than or equal to
$__________ , (b) the date on which an Event of Default or a Servicer Default
occurs, (c) the date on which an Insolvency Event occurs with respect to the
Seller or CCC and (d) the Determination Date with respect to the ______________
Distribution Date.
"Indenture" means the Indenture dated as of ______________ , 199_,
between the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall have the meaning set forth in the
Trust Agreement.
"Initial Cutoff Date" means the date as of which Initial Receivables,
if any, are conveyed to the Trust pursuant to Section 2.01.
"Initial Receivables" means the Standard Receivables, if any, and the
Fixed Value Receivables, if any, listed on Schedule A on the Closing Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such
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Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure
by such Person generally to pay its debts as such debts become due, or the
taking of action by such Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the Trial Interest Distribution Amount for such Distribution Date and,
with respect to the Reconciliation Determination Date for such Distribution
Date, the sum of the following amounts, without duplication, with respect to
the Receivables (i.e., not Eligible Investment Receivables) in respect of the
Collection Period preceding such Distribution Date: (a) that portion of all
collections on Receivables (including Payaheads) allocable to interest plus
that portion of Payaheads allocable to principal, (b) Liquidation Proceeds with
respect to the Receivables to the extent allocable to interest due thereon in
accordance with the Servicer's customary servicing procedures, (c) all Advances
made by the Servicer of interest due on Receivables, (d) the Purchase Amount of
each Receivable that became a Purchased Receivable during such Collection
Period to the extent attributable to accrued interest on such Receivable, (e)
Recoveries for such Collection Period, and (f) Investment Earnings for the
related Distribution Date; provided, however, that in calculating the Interest
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent of any unreimbursed Precomputed Advances
of interest; (ii) Liquidation Proceeds with respect to a particular Precomputed
Receivable to the extent of any unreimbursed Precomputed Advances of interest;
(iii) all payments and proceeds (including Liquidation Proceeds) of any
Purchased Receivables the Purchase Amount of which has been included in the
Interest Distribution Amount in a prior Collection Period; (iv) the sum for all
the Simple Interest Receivables of collections on each such Simple Interest
Receivable received during such preceding Collection Period in excess of the
amount of interest that would be due on the aggregate Principal Balance of the
Simple Interest Receivables during such Collection Period at their respective
APRs if a payment were received on each Simple Interest Receivable during such
Collection Period on the date payment is due under the terms of such Simple
Interest Receivable; (v) Liquidation Proceeds with respect to a Simple Interest
Receivable attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period) but only to the
extent of any unreimbursed Simple Interest Advances; and (vi) amounts released
from the Pre-Funding Account.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means Premier Auto Trust 199_ - _______.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, liquidated by the Servicer through the sale of a
Financed Vehicle or otherwise.
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"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source,
during the Collection Period in which such Receivable or Eligible Investment
Receivable, as applicable, became a Liquidated Receivable, net of the sum of
any amounts expended by the Servicer in connection with such liquidation and
any amounts required by law to be remitted to the Obligor on such Liquidated
Receivable.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Negative Arbitrage Amount" means, with respect to any Business Day
during the Funding Period, the amount produced by the following calculation:
(A/360) *B* (C-___%)
where
A = the number of days from and including such Business Day to but
excluding _____________, 199_, calculated on the basis of a 360-day
year of twelve 30-day months;
B = the amount in the Pre-Funding Account on such Business Day (after
giving effect to any withdrawal therefrom to purchase Receivables on
such Business Day); and
C = the weighted average (calculated on the basis of the outstanding
principal amounts) of the Interest Rate for each Class of the Notes
and the Pass-Through Rate.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of
the close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will decline
to reflect reductions in the outstanding principal balance of such Class of
Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the respective Interest
Rates borne by each Class of the Notes for the related Interest Period.
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"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date. For all purposes of this
Agreement and the Basic Documents, interest with respect to the Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, interest accrued for the related Interest
Accrual Period on each Class of Notes at the respective Interest Rate for such
Class on the outstanding principal balance of the Notes of such Class on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date), after giving effect to all distributions
of principal to the Noteholders of such Class on or prior to such Distribution
Date (or, in the case of the first Distribution Date, on the Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (i) the Regular Principal
Distribution Amount plus (ii) the Accelerated Principal Distribution Amount
plus (iii) the Noteholders' Reconciliation Principal Adjustment Amount (which
may be a positive or negative number) for the immediately preceding
Reconciliation Determination Date.
"Noteholders' Prepayment Premium" means, with respect to each Class of
the Notes, an amount equal to the excess, if any, discounted as described
below, of (i) the amount of interest that would accrue on such Class'
Pre-Funded Percentage of any remaining Pre-Funded Amount (the "Note Prepayment
Amount") at the Interest Rate of such Class during the period commencing on and
including the Distribution Date on which such Note Prepayment Amount is
required to be deposited in the Note Distribution Account pursuant to Section
5.08(b)(ii)(A) to but excluding ________, in the case of the Class A-1 Notes,
____, in the case of the Class A-2 Notes, and ____________, in the case of the
Class A-3 Notes, over (ii) the amount of interest that would have accrued on
the applicable Note Prepayment Amount over the same period at a per annum rate
of interest equal to the bond yield to maturity on the Determination Date
preceding such Distribution Date on the _______________________________, in the
case of the Class A-1 Notes, the _______________________________, in the case
of the Class A-2 Notes, and the _______________________________, in the case of
the Class A-3 Notes. Such excess shall be discounted on a monthly basis to
present value to such Distribution Date at the applicable yield described in
clause (ii) above.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
provided, however, that the Noteholders' Principal Distributable Amount shall
not exceed the outstanding principal balance of the Notes. In addition, (a) on
the Class
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A-1 Final Scheduled Distribution Date, the principal required to be deposited
in the Note Distribution Account will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-1 Notes to zero; (b) on the Class A-2 Final
Scheduled Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of the Class A-2 Notes to zero; and (c) on the Class A-3 Final Scheduled
Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of the Class A-3 Notes to zero.
"Noteholders' Reconciliation Principal Adjustment Amount" means, with
respect to each Reconciliation Determination Date, the difference, if any,
(which may be a positive or negative number) between the amount determined on
such Reconciliation Determination Date to be distributable to Noteholders on
account of principal (including any accelerated payments of principal required
to be made from amounts on deposit in the Reserve Account pursuant to Sections
5.07(b)(ii) hereof) on the next preceding Distribution Date (in respect of
which such reconciliation is being calculated) and the amount actually
distributed to Noteholders on account of principal on such Distribution Date
(other than the Noteholders' Reconciliation Principal Adjustment Amount for any
prior period).
"Obligor" on a Receivable or an Eligible Investment Receivable means
the purchaser or co-purchasers of the Financed Vehicle and any other Person who
owes payments under the Receivable or Eligible Investment Receivable,
respectively.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, the president, any executive vice president or any vice president
and (b) a treasurer, assistant treasurer, secretary or assistant secretary of
the Seller, the Company or the Servicer, as appropriate.
"OMSC" means Overseas Military Sales Corporation, or its successor.
"OMSC Receivable" means any Standard Receivable acquired by CCC from
OMSC.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
or the Rating Agencies, as applicable.
"Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables (as of their respective Subsequent Cutoff Dates)
sold to the Issuer.
"Outstanding Precomputed Advances" on the Precomputed Receivables
means the sum, as of the close of business on the last day of a Collection
Period, of all Precomputed Advances as reduced as provided in Section 5.04(a).
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"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.04(b).
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Pass-Through Rate" means _____ % per annum.
"Payahead" on a Receivable that is a Precomputed Receivable means the
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.03 with respect to such Receivable.
"Payahead Balance" on a Receivable that is a Precomputed Receivable
means the sum, as of the close of business on the last day of a Collection
Period, of all Payaheads made by or on behalf of the Obligor with respect to
such Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable pursuant to Sections 5.03 and 5.04.
"Payment Determination Date" means, with respect to any Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of business on
the last day of a Collection Period, which the Servicer is required to advance
on the related Precomputed Receivable pursuant to Section 5.04(a).
"Precomputed Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, under which the portion of a payment allocable to
earned interest (which may be referred to in the related Contract as an add-on
finance charge) and the portion allocable to the Amount Financed are determined
according to the sum of periodic balances or the sum of monthly balances or any
equivalent method, or which is a monthly actuarial receivables.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account.
"Pre-Funded Percentage" means, with respect to a Class of Notes or the
Certificates, the quotient (expressed as a percentage) of (i) the initial
principal balance of such Class of
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Notes or the Initial Certificate Balance, as the case may be, and (ii) the sum
of the initial principal balance of the Notes and the Initial Certificate
Balance.
"Pre-Funding Account" means the Trust Account established pursuant to
Section 5.01(a)(ii).
"Principal Balance" means the Amount Financed minus the sum, as of
the close of business on the last day of a Collection Period, of (a) with
respect to a Precomputed Receivable, (i) that portion of all Scheduled Payments
due on or prior to such day allocable to principal using the actuarial or
constant yield method, (ii) any refunded portion of extended warranty
protection plan costs or of physical damage, credit life or disability
insurance premiums included in the Amount Financed, (iii) any payment of the
Purchase Amount 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) with respect
to a Simple Interest Receivable, (i) the portion of all payments made by or on
behalf of the related Obligor on or prior to such day and allocable to
principal using the Simple Interest Method and (ii) any payment of the Purchase
Amount with respect to the Simple Interest Receivable allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of ________,
199_, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable or Eligible Investment Receivable, as applicable, under the terms
thereof including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable or Eligible Investment
Receivable, as applicable, purchased as of the close of business on the last
day of a Collection Period by the Servicer pursuant to Section 4.07 or by the
Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's and, for purposes
of Section 2.02(b) only, Fitch Investors Service, Inc. and Duff & Phelps Credit
Rating Company. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller, notice of
which designation shall be given to the Indenture Trustee, the Owner Trustee
and the Servicer. Any notice required to be given to a Rating Agency pursuant
to this Agreement shall also be given to Fitch Investors Service, Inc. and Duff
& Phelps Credit Rating Company, although, except as set forth above, neither
shall be deemed to be a Rating Agency for any purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Company, the Servicer, the
Owner Trustee and the Indenture Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes or
the Certificates.
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"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable. An Eligible Investment
Receivable is not a Receivable.
"Receivable Files" means the documents specified in Section 3.03.
"Reconciliation Determination Date" means, with respect to a
Distribution Date (referred to in this definition as the "Primary Distribution
Date") and the related Collection Period, the Business Day immediately
preceding the Distribution Date next succeeding such Primary Distribution Date.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, the Trial Regular Principal Distribution Amount and, with
respect to the related Reconciliation Determination Date, the sum of the
following amounts, without duplication, with respect to the Receivables (i.e.,
not any Eligible Investment Receivables) in respect of the Collection Period
preceding such Distribution Date: (a) that portion of all collections on
Receivables allocable to principal (exclusive of Payaheads allocable to
principal that have not been applied as payments under the related Receivables
in such Collection Period and inclusive of Payaheads allocable to principal
that have been applied as payments under the related Receivables in such
Collection Period), (b) all Liquidation Proceeds attributable to the principal
amount of Receivables that became Liquidated Receivables during such Collection
Period in accordance with the Servicer's customary servicing procedures, plus
the amount of Realized Losses with respect to such Liquidated Receivables, (c)
all Precomputed Advances made by the Servicer of principal due on the
Precomputed Receivables, (d) to the extent attributable to principal, the
Purchase Amount of each Receivable that became a Purchased Receivable during
such Collection Period, (e) partial prepayments on Precomputed Receivables
relating to refunds of extended warranty protection plan costs or of physical
damage, credit life or disability insurance policy premiums, but only if such
costs or premiums were financed by the respective Obligor as of the date of the
original contract and only to the extent not included under clause (a) above,
and (f) on the Final Scheduled Distribution Date, any amounts advanced by the
Servicer on such Final Scheduled Distribution Date with respect to principal on
the Receivables; provided, however, that in calculating the Regular Principal
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of principal, (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of principal, (iii) all payments and proceeds
(including Liquidation Proceeds) of any Purchased Receivables the Purchase
Amount
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of which has been included in the Principal Distribution Amount in a prior
Collection Period, (iv) Recoveries and (v) amounts released from the
Pre-Funding Account.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means, with respect to the Closing
Date, an amount equal to the Specified Reserve Account Balance on the Closing
Date (which is equal to $______________) and, with respect to each Subsequent
Transfer Date after the Closing Date, an amount equal to ___% of the Principal
Balance of the Subsequent Receivables transferred to the Issuer on such
Subsequent Transfer Date.
"Scheduled Payment" on a Precomputed Receivable means that portion of
the payment required to be made by the Obligor during each Collection Period
sufficient to amortize the Principal Balance under the actuarial method over
the term of the Receivable and to provide interest at the APR.
"Seller" means Chrysler Financial Corporation, a Michigan corporation,
and its successors in interest to the extent permitted hereunder.
"Servicer" means CCC, as the servicer of the Receivables, and each
successor to CCC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.09, substantially in the form of
Exhibit C.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to
Section 4.08.
"Servicing Fee Rate" means ____% per annum.
"Simple Interest Advance" means the amount of interest, as of the
close of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
5.04(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable or Eligible
Investment Receivable, as applicable, under which the portion of a payment
allocable to interest and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
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"Specified Reserve Account Balance" means, with respect to any Business
Day during the Funding Period and any Distribution Date occurring after the
Funding Period, the sum of (i) the sum of the Negative Arbitrage Amount for
such Business Day and ___% of the Original Pool Balance as of such date, (ii)
___% of the Pool Balance on the first day of the related Collection Period and
(iii) the amount, if any, of principal and interest in the Reserve Account
allocable to Eligible Investment Receivables that would have been distributed
to the Seller on such Distribution Date (or the Distribution Date next
succeeding any such Business Day occurring during the Funding Period) except
for the restrictions contained in the second proviso of Section 5.07(b)(i);
provided, however, that with respect to the portion of the Specified Reserve
Account Balance set forth in clause (i) above, so long as on any Distribution
Date (except the first Distribution Date) the sum of (A) the outstanding
principal balance of the Notes and the Certificate Balance (after giving effect
to all distributions made on the prior Distribution Date) and (B) the aggregate
amount of Payaheads that have been collected but not yet applied as payments
under the related Receivables as of the first day of the related Collection
Period is less than or equal to the sum of _____% of (x) the Pool Balance on
the first day of the related Collection Period in which such Distribution Date
occurs and (y) the Pre-Funded Amount on such day, then the portion of the
Specified Reserve Account Balance specified in clause (i) above shall equal
____% of the Original Pool Balance; provided, further, that so long as on any
Distribution Date (except the first Distribution Date) the sum of (A) the
outstanding principal balance of the Notes and the Certificate Balance (after
giving effect to all distributions made on the prior Distribution Date) and (B)
the aggregate amount of Payaheads that have been collected but not yet applied
as payments under the related Receivables as of the first day of the related
Collection Period is less than or equal to the sum of _____% of (x) the Pool
Balance on the first day of the related Collection Period and (y) the
Pre-Funded Amount on such day, then the portion of the Specified Reserve
Account Balance specified in clause (i) above shall equal ____% of the Original
Pool Balance. With respect to the portion of the Specified Reserve Account
Balance set forth in clause (ii) above, so long as on any Distribution Date
(except the first Distribution Date) the sum of (x) the outstanding principal
balance of the Notes and the Certificate Balance (after giving effect to
payments made on the prior Distribution Date) and (y) the aggregate amount of
Payaheads that have been collected but not yet applied as payments under the
related Receivables as of the first day of the related Collection Period is
less than or equal to the sum of _____% of (a) the Pool Balance on the first
day of the related Collection Period and (b) the Pre-Funded Amount on such day,
then the portion of the Specified Reserve Account Balance set forth in clause
(ii) above will be reduced to an amount equal to the product of (I) the Pool
Balance on the first day of the related Collection Period and (II) the
percentage (which shall not be greater than ____% or less than zero) equal to
(X) the percentage derived from the fraction, the numerator of which is the
outstanding principal balance of the Notes and the Certificate Balance (after
giving effect to all distributions made on the prior Distribution Date) and the
denominator of which is such Pool Balance less (Y) ____%. The portion of
the Specified Reserve Account Balance specified in clause (ii) above may be
invested in Eligible Investment Receivables.
"Standard & Poor's" means Standard & Poor's Ratings Group, or its
successor.
"Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche), as such Schedule shall be
supplemented to reflect the transfer
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of Subsequent Receivables to the Issuer pursuant to Section 2.02, which is not
a Fixed Value Receivable.
"Subsequent Cutoff Date" means the date as of which particular
Subsequent Receivables are conveyed to the Trust pursuant to Section 2.02.
"Subsequent Receivables" means the Standard Receivables and Fixed
Value Receivables transferred to the Issuer pursuant to Section 2.02, which
shall be listed on Schedule A to the related Subsequent Transfer Assignment.
"Subsequent Transfer Assignment" has the meaning assigned thereto in
Section 2.02(b).
"Subsequent Transfer Date" means any date (including the Closing Date)
during the Funding Period on which Subsequent Receivables are transferred to
the Issuer and a Subsequent Transfer Assignment is executed and delivered to
the Owner Trustee and the Indenture Trustee pursuant to Section 2.02 and, with
respect to Eligible Investment Receivables, any date on which Eligible
Investment Receivables are transferred to the Issuer and a Subsequent Transfer
Assignment is executed and delivered to the Owner Trustee and the Indenture
Trustee pursuant to Section 2.04.
"Total Distribution Amount" means, for each Distribution Date and the
related Reconciliation Determination Date, the sum of the applicable Interest
Distribution Amount and the applicable Regular Principal Distribution Amount
(other than the portion thereof attributable to Realized Losses).
"Trial Interest Distribution Amount" means, with respect to any
Distribution Date, an amount equal to the sum of (i) one-twelfth (1/12th) of
the product of the weighted average APR of all Receivables as of the first day
of the related Collection Period times the Pool Balance as of the first day of
the related Collection Period plus (ii) the amount of Investment Earnings with
respect to amounts on deposit in the Pre-Funding Account that have been
deposited in the Collection Account on the Payment Determination Date.
"Trial Regular Principal Distribution Amount" means, with respect to
any Distribution Date, an amount equal to the excess, if any, of the amount on
deposit in the Collection Account on the related Payment Determination Date
over the Trial Interest Distribution Amount for such Distribution Date.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and
all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
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"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of ________________, 199_, among the Seller, the Company and the Owner
Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and
assigns.
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ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Initial Receivables. [Reserved.] [In
consideration of the Issuer's delivery to or upon the order of the Seller of
$_________ less the amount to be deposited in the Reserve Account on the
Closing Date (other than any portion thereof attributable to the transfer of
Subsequent Receivables on the Closing Date), the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations herein), all right, title and interest of the
Seller in and to:
a. the Initial Receivables, and all moneys due thereon, on or
after __________, 199_, in the case of Precomputed Receivables, and
all moneys received thereon, on and after the Initial Cutoff Date, in
the case of Simple Interest Receivables;
b. the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any other interest of
the Seller in the Financed Vehicles;
c. any proceeds with respect to the Initial Receivables from
claims on any physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors;
d. any proceeds with respect to the Initial Receivables from
recourse to Dealers thereon with respect to which the Servicer has
determined in accordance with its customary servicing procedures that
eventual payment in full is unlikely;
e. any Financed Vehicle that shall have secured any such
Initial Receivable and that shall have been acquired by or on behalf
of the Seller, the Servicer, the Company or the Trust;
f. all right, title and interest in all funds on deposit from
time to time in the Trust Accounts, including the Reserve Account
Initial Deposit and the Pre-Funded Amount, and the Certificate
Distribution Account, and in all investments and proceeds thereof
(including all income thereon); and
g. the proceeds of any and all of the foregoing.]
SECTION 2.02. Conveyance of Subsequent Receivables. (a) Subject to
the conditions set forth in paragraph (b) below, in consideration of the
Issuer's delivery on the related Subsequent Transfer Date to or upon the order
of the Seller of the amount described in Section 5.08(a) to be delivered to the
Seller, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the obligations herein), all
right, title and interest of the Seller in and to:
(1) the Subsequent Receivables listed on Schedule A to the
related Subsequent Transfer Assignment, and all moneys due thereon, on
or after the related Subsequent Cutoff Date, in the case of
Precomputed Receivables, and all moneys received thereon,
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on and after the related Subsequent Cutoff Date, in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Vehicles granted
by Obligors pursuant to such Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to such Subsequent Receivables
from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds with respect to such Subsequent Receivables
from recourse to Dealers thereon with respect to which the Servicer
has determined in accordance with its customary servicing procedures
that eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such
Subsequent Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer, the Company or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) (1) The Seller shall transfer to the Issuer the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions precedent on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee a duly executed written assignment
in substantially the form of Exhibit D (the "Subsequent Transfer
Assignment"), which shall include supplements to Schedule A listing
the Subsequent Receivables;
(ii) the Seller shall, to the extent required by Section
5.02, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables;
(iii) as of each Subsequent Transfer Date, (A) the Seller
was not insolvent and will not become insolvent as a result of the
transfer of Subsequent Receivables on such Subsequent Transfer Date,
(B) the Seller did not intend to incur or believe that it would incur
debts that would be beyond the Seller's ability to pay as such debts
matured, (C) such transfer was not made with actual intent to hinder,
delay or defraud any Person and (D) the assets of the Seller did not
constitute unreasonably small capital to carry out its business as
conducted;
(iv) the applicable Reserve Account Initial Deposit for
such Subsequent Transfer Date shall have been made pursuant to Section
5.08(a);
(v) the Funding Period shall not have terminated;
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(vi) the Receivables in the Trust, including the
Subsequent Receivables to be conveyed to the Trust on such Subsequent
Transfer Date, shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial Cutoff Date
and the Subsequent Receivables on the related Subsequent Cutoff
Dates): (A) not more than __% of the Principal Balances of the
Receivables in the Trust represent vehicles financed at CCC's used
vehicle rates; and (B) the weighted average APR of the Receivables in
the Trust shall not be less than ____%, unless, with the prior consent
of the Rating Agencies, the Seller increases the Reserve Account
Initial Deposit by the Additional Amount solely relating thereto; and
the weighted average remaining term of the Receivables in the Trust,
including the Receivables to be conveyed to the Trust on the
Subsequent Transfer Date, shall not be greater than __ months;
(vii) each of the representations and warranties made by
the Seller pursuant to Section 3.01 with respect to the Subsequent
Receivables shall be true and correct as of the related Subsequent
Transfer Date, and the Seller shall have performed all obligations to
be performed by it hereunder on or prior to such Subsequent Transfer
Date;
(viii) the Seller shall, at its own expense, on or prior
to the Subsequent Transfer Date indicate in its computer files that
the Subsequent Receivables identified in the Subsequent Transfer
Assignment have been sold to the Issuer pursuant to this Agreement and
the Subsequent Transfer Assignment;
(ix) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the
Owner Trust Estate and the first perfected security interest of the
Indenture Trustee in the Collateral;
(x) no selection procedures believed by the Seller to
be adverse to the interests of the Certificateholders or the
Noteholders shall have been utilized in selecting the Subsequent
Receivables;
(xi) the addition of any such Subsequent Receivables
will not result in a material adverse tax consequence to the Trust,
the Noteholders or the Certificateholders;
(xii) the Seller shall have delivered to the Indenture
Trustee and the Owner Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this paragraph
(b)(1); and
(xiii) no Subsequent Receivable shall be a receivable that
was repurchased by the Seller through the exercise of optional
redemption provisions contained in other securitization transactions.
(2) In addition, any such conveyance of Subsequent Receivables
made on one or more Subsequent Transfer Dates occurring during any Collection
Period will also be subject to the satisfaction, on or before the fifteenth day
(or if such fifteenth day is not a Business
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Day, then on the next succeeding Business Day) of the month following the end
of such Collection Period, of the following conditions subsequent:
(i) the Seller shall have delivered to the Indenture
Trustee, the Owner Trustee and the Rating Agencies a statement listing
the aggregate Principal Balance of such Subsequent Receivables so
transferred and any other information reasonably requested by any of
the foregoing with respect to such Subsequent Receivables;
(ii) each of the Rating Agencies shall have notified the
Seller in writing that as of such Subsequent Transfer Date, following
the addition of all such Subsequent Receivables, the Notes and the
Certificates continue to be rated in the highest investment rating
category by such Rating Agency;
(iii) the addition of any such Subsequent Receivable will
not result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(iv) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of such
Subsequent Receivables substantially in the form of the Opinion of
Counsel delivered to the Rating Agencies on the Closing Date and (B)
to the Owner Trustee and the Indenture Trustee the Opinion of Counsel
required by Section 10.02(i)(1);
(v) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee a letter of a firm of independent
certified public accountants confirming that the conditions set forth
in Section 2.02(b)(1)(vi) were satisfied with respect to those
Subsequent Receivables conveyed on each such Subsequent Transfer Date,
covering substantially the same matters with respect to such
Subsequent Receivables as are set forth on Exhibit E hereto, and, if
any of such Subsequent Receivables are OMSC Receivables, setting forth
the Principal Balance thereof; and
(vi) the Seller shall have delivered to the Indenture
Trustee and the Owner Trustee an Officers' Certificate confirming the
satisfaction of each condition specified in this paragraph (b)(2).
The Seller covenants that in the event any of the foregoing conditions
subsequent are not satisfied with respect to any Subsequent Receivable on the
date required as specified above, the Seller will immediately repurchase such
Subsequent Receivable at a price equal to the Purchase Amount thereof, in the
manner specified in Section 5.05.
(c) The Seller covenants to transfer to the Issuer pursuant to
paragraph (a) above Subsequent Receivables with an aggregate Principal Balance
equal to $_____________. The Seller may effect a transfer of Subsequent
Receivables to the Trust on the Closing Date. In the event that the Seller
shall fail to deliver and sell to the Issuer any or all of such Subsequent
Receivables by the date on which the Funding Period ends and the Pre-Funded
Amount is greater than $_______ on such date, the Seller shall be obligated to
deposit an amount equal to the Noteholders' Prepayment Premium into the Note
Distribution Account and an amount equal
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to the Certificateholders' Prepayment Premium into the Certificate Distribution
Account on the Distribution Date on which the Funding Period ends (or, if the
Funding Period does not end on a Distribution Date, on the first Distribution
Date following the end of the Funding Period); provided, however, that the
foregoing shall be the sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to a
failure of the Seller to comply with such covenant.
SECTION 2.03. Conveyance of Fixed Value Payments. Promptly following
the transfer to the Issuer of the Initial Receivables, if any, on the Closing
Date and the Subsequent Receivables on each Subsequent Transfer Date, the
Issuer shall, without further action hereunder or thereunder, be deemed to
sell, transfer, assign, set over and otherwise convey to the Seller, effective
as of the Closing Date or the related Subsequent Transfer Date, as applicable,
without recourse, representation or warranty, all the right, title and interest
of the Issuer in and to the Fixed Value Payments, all monies due and to become
due and all amounts received with respect thereto and all proceeds thereof,
subject to Section 5.03(b).
SECTION 2.04. Fixed Value Securities. (a) At any time after the
Closing Date or a Subsequent Transfer Date on which Fixed Value Payments are
sold to the Seller pursuant to Section 2.03, at the option of the Seller and,
upon 10 days prior notice to the Owner Trustee and the Indenture Trustee, the
Seller will be permitted to sell to the Issuer, and the Issuer shall be
obligated to purchase from the Seller (subject to the availability of funds),
all or any portion of such Fixed Value Payments, subject to the terms and
conditions described below. Upon any such sale, (x) the Seller and the Owner
Trustee will enter into an amendment to this Agreement and the Basic Documents
to provide for, at the election of the Seller, the issuance of certificates
representing ownership interests in the Trust to the extent of such Fixed Value
Payments or the issuance of indebtedness by the Issuer secured by such Fixed
Value Payments (collectively, the "Fixed Value Securities") and to make any
other provisions herein or therein that are necessary or desirable in
connection therewith and (y) the Owner Trustee will enter into any other
agreements or instruments related thereto as requested by the Seller;
provided, however, that the Owner Trustee may, but shall not be obligated to,
enter into any such amendment, agreement or instrument that affects the Owner
Trustee's own rights, duties or immunities under this Agreement; and provided,
further, that the obligation of the Issuer to purchase such Fixed Value
Payments and of the Owner Trustee to enter into any such amendment or other
agreement or instrument is subject to the following conditions precedent:
(i) such amendment and other agreements and
instruments, in forms satisfactory to the Owner Trustee and, in the
case of amendments or agreements to be executed and delivered by the
Indenture Trustee, in forms satisfactory to the Indenture Trustee
shall have been executed by each other party thereto and delivered to
the Owner Trustee or the Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel to the effect that each condition precedent
(including the requirement with respect to all required filings)
provided by this Section has been complied with and such amendment or
other agreement or instrument is authorized or permitted by this
Agreement;
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(iii) the Rating Agency Condition shall have been
satisfied with respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other
agreement or instrument shall not adversely affect in any material
respect the interest of any Noteholder or Certificateholder, and the
Depositor shall have provided to the Owner Trustee and the Indenture
Trustee an Officers' Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall
have received an Opinion of Counsel to the effect that such sale and
issuance will not have any material tax consequence to any Noteholder
or Certificateholder; and
(vi) all filings and other actions required to continue
the first perfected interest of the Trust in the Owner Trust Estate
and the Indenture Trustee in the Collateral shall have been duly made
or taken by the Seller.
(b) Except as described in Section 10.04, the Seller will not
sell, transfer, assign, set over or otherwise convey the Fixed Value Payments
other than to the Issuer pursuant to paragraph (a).
SECTION 2.05. Purchase of Eligible Investment Receivables. (a)
Pursuant to Section 5.01(b), the Indenture Trustee may invest funds in the
Reserve Account in Eligible Investment Receivables, but only up to the portion
of the Specified Reserve Account Balance specified in clause (ii) of the
definition "Specified Reserve Account Balance". Eligible Investment
Receivables shall be part of the Reserve Account and shall not be Receivables
hereunder or under the Indenture, and, except for Investment Earnings in
respect of the Eligible Investment Receivables (which Investment Earnings shall
be deposited in the Collection Account pursuant to Section 5.01(b) and are part
of the Interest Distribution Amount), collections on and Purchase Amounts in
respect of Eligible Investment Receivables shall be applied as part of the
Reserve Account pursuant to Section 5.07 and shall not be part of the Total
Distribution Amount. Upon delivery by the Indenture Trustee to the Seller of
an amount equal to the aggregate Principal Balance of the Eligible Investment
Receivables then being purchased by the Indenture Trustee on behalf of the
Issuer, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the obligations herein), all
right, title and interest of the Seller in and to:
(1) the Eligible Investment Receivables listed on Schedule A
to the related Eligible Investment Transfer Assignment, and all moneys
due thereon, on or after the related Subsequent Cutoff Date, in the
case of Precomputed Receivables, and all moneys received thereon, on
and after the related Subsequent Cutoff Date, in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Vehicles granted
by Obligors pursuant to such Eligible Investment Receivables and any
other interest of the Seller in such Financed Vehicles;
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(3) any proceeds with respect to such Eligible Investment
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds with respect to such Eligible Investment
Receivables from recourse to Dealers thereon with respect to which the
Servicer has determined in accordance with its customary servicing
procedures that eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such
Eligible Investment Receivable and shall have been acquired by or on
behalf of the Seller, the Servicer, the Company or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Eligible
Investment Receivables and the other property and rights related thereto
described in paragraph (a) above only upon the satisfaction of each of the
following conditions precedent on or prior to the related Subsequent Transfer
Date:
(i) the Seller shall have delivered to the Owner Trustee
and the Indenture Trustee a duly executed Eligible Investment Transfer
Assignment substantially in the form of Exhibit F, which shall include
supplements to Schedule C listing the Eligible Investment Receivables;
(ii) the Seller shall, to the extent required by Section
5.02, have deposited in the Reserve Account all amounts (A) due on or
after the applicable Subsequent Cutoff Date in respect of Eligible
Investment Receivables that are Precomputed Receivables or (b)
received on or after the applicable Subsequent Cutoff Date in respect
of the Eligible Investment Receivables that are Simple Interest
Receivables;
(iii) as of each Subsequent Transfer Date, (A) the Seller
was not insolvent and will not become insolvent as a result of the
transfer of Eligible Investment Receivables on such Subsequent
Transfer Date, (B) the Seller did not intend to incur or believe that
it would incur debts that would be beyond the Seller's ability to pay
as such debts matured, (C) such transfer was not made with actual
intent to hinder, delay or defraud any Person and (D) the assets of
the Seller did not constitute unreasonably small capital to carry out
its business as conducted;
(iv) each of the representations and warranties made by
the Seller pursuant to Section 3.01 (other than clause (v)) shall be
true and correct with respect to the Eligible Investment Receivables
as of the related Subsequent Transfer Date, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior
to such Subsequent Transfer Date;
(v) not more than __% of the Principal Balances of the
Eligible Investment Receivables in the Reserve Account, including the
Eligible Investment Receivables to
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be conveyed to the Trust on such Subsequent Transfer Date (based on
the characteristics of the Eligible Investment Receivables on the
related Subsequent Cutoff Date) represent vehicles financed at CCC's
used vehicle rates;
(vi) the Seller shall, at its own expense, on or prior to
the related Subsequent Transfer Date indicate in its computer files
that the Eligible Investment Receivables identified in the Eligible
Investment Transfer Assignment have been sold to the Issuer pursuant
to this Agreement and the Eligible Investment Transfer Assignment;
(vii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the
Owner Trust Estate and the first perfected security interest of the
Indenture Trustee in the Collateral;
(viii) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders or the Noteholders
shall have been utilized in selecting the Eligible Investment
Receivables;
(ix) the addition of any such Eligible Investment
Receivables will not result in a material adverse tax consequence to
the Trust, the Noteholders or the Certificateholders;
(x) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of such
Eligible Investment Receivables in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date and (B) to the
Owner Trustee and Indenture Trustee the Opinion of Counsel required by
Section 10.02(i)(1); provided that the Opinions of Counsel referred to
in clauses (A) and (B) shall only be delivered (X) during the Funding
Period, on the date on which the Opinion of Counsel required by
Section 2.02(b)(2)(iv) is required to be delivered and shall relate to
the Eligible Investment Receivables transferred in the preceding
Collection Period and (Y) after the Pre-Funding Period, on the
Subsequent Transfer Date on which the aggregate Principal Balance
(calculated as of the respective Subsequent Cutoff Dates) of the
Eligible Investment Receivables delivered under this Section 2.05 and
not previously covered by an Opinion of Counsel required by this
clause (Y) equals or exceeds $5,000,000; and
(xi) the Seller shall have delivered to the Indenture
Trustee and the Owner Trustee an Officers' Certificate confirming the
satisfaction of each condition specified in this paragraph (b).
(c) Promptly following the transfer to the Issuer of Eligible
Investment Receivables on any Subsequent Transfer Date, the Issuer shall,
without further action hereunder or thereunder, be deemed to sell, transfer,
assign, set over and otherwise convey to the Seller, effective as of the
related Subsequent Transfer Date, without recourse, representation or warranty,
all the right, title and interest of the Issuer in and to the related Fixed
Value Payments, all monies due and to become due and all amounts received with
respect thereto and all proceeds thereof, subject to Section 5.03(b).
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(d) Except as described in Section 10.04, the Seller will not
sell, transfer, assign, set over or otherwise convey Fixed Value Payments
derived from Eligible Investment Fixed Value Receivables.
(e) Except as otherwise provided herein, all of the provisions of
this Agreement (exclusive of Section 3.01 (v) and Section 5.04) applicable to a
Receivable shall also apply to the Eligible Investment Receivables, except
that, pursuant to Section 5.02, collections on and Purchase Amounts in respect
of the Eligible Investment Receivables shall be deposited into the Reserve
Account at the time when collections on and Purchase Amounts in respect of the
Receivables are required to be deposited into the Collection Account. For
purposes of calculating the amount in the Reserve Account, the amount
represented by an Eligible Investment Receivable shall be its Principal
Balance. The Servicer shall receive a Servicing Fee in respect of the Eligible
Investment Receivables calculated in the manner specified in Section 4.08 and
payable out of any collections on the Eligible Investment Receivables allocable
to interest.
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the Seller with
Respect to the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied
in acquiring the Receivables. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Closing Date, in the
case of the Initial Receivables, if any, and as of the applicable Subsequent
Transfer Date, in the case of the Subsequent Receivables, but shall survive the
sale, transfer and assignment of the Initial Receivables, if any, and the
Subsequent Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. Each Standard Receivable
and Fixed Value Receivable (A) was originated in the United States of
America, except for the OMSC Receivables, by a Dealer for the retail
sale of a Financed Vehicle in the ordinary course of such Dealer's
business, was fully and properly executed by the parties thereto, was
purchased by the Seller from CCC, which, in turn, had purchased such
Standard Receivable or Fixed Value Receivable from such Dealer under
an existing dealer agreement with CCC, and was validly assigned by
such Dealer to CCC in accordance with its terms, (B) has created or
shall create a valid, subsisting and enforceable first priority
security interest in favor of CCC in the Financed Vehicle, which
security interest has been assigned to the Seller and is assignable by
the Seller to the Issuer and by the Issuer to the Indenture Trustee,
(C) contains customary and enforceable provisions such that the rights
and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, (D) provides
for level monthly payments (provided, that the payment in the first or
last month in the life of the Standard Receivable or Fixed Value
Receivable may be minimally different from the level payments and that
the payment in the last month of a Fixed Value Receivable may be a
Fixed Value Payment) that fully amortize the Amount Financed by
maturity
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and yield interest at the Annual Percentage Rate and (E) in the case
of Precomputed Receivables, in the event that such contract is
prepaid, provides for a prepayment that fully pays the Principal
Balance and includes a full month's interest, in the month of
prepayment, at the Annual Percentage Rate. The Obligor on each OMSC
Receivable was in the service of the United States of America military
at the time such OMSC Receivable was originated.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement and Schedule A to any related Subsequent
Transfer Assignment is true and correct in all material respects as of
the opening of business on the related Subsequent Cutoff Date, and no
selection procedures believed to be adverse to the Noteholders or the
Certificateholders were utilized in selecting the Receivables. The
computer tape or other listing regarding the Standard Receivables and
the Fixed Value Receivables made available to the Issuer and its
assigns (which computer tape or other listing is required to be
delivered as specified herein) is true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed
Value Receivable and the sale of the Financed Vehicle complied at the
time it was originated or made and at the execution of this Agreement
and each Subsequent Transfer Assignment complies in all material
respects with all requirements of applicable federal, state and local
laws and regulations thereunder (or, in the case of the OMSC
Receivables, Swiss laws and regulations and the laws and regulations
of the jurisdiction where the Receivable was originated), including
usury laws, the federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B
and Z, the Texas Consumer Credit Code and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and
other consumer credit laws and equal credit opportunity and disclosure
laws.
(d) Binding Obligation. Each Standard Receivable and Fixed
Value Receivable represents the genuine, legal, valid and binding
payment obligation in writing of the Obligor, enforceable by the
holder thereof in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables
or Fixed Value Receivables is due from the United States of America or
any State or from any agency, department or instrumentality of the
United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment and transfer thereof, each Standard Receivable
and Fixed Value Receivable shall be secured by a validly perfected
first security interest in the Financed Vehicle in favor of the Seller
as secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first
security interest in the Financed Vehicle in favor of the Seller as
secured party.
(g) Receivables in Force. No Standard Receivable or Fixed
Value Receivable has been satisfied, subordinated or rescinded, nor
has any Financed Vehicle been
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released from the lien granted by the related Standard Receivable or
Fixed Value Receivable in whole or in part.
(h) No Waiver. No provision of a Standard Receivable or
Fixed Value Receivable has been waived.
(i) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the Obligor's
Scheduled Payments has been increased except for increases resulting
from the inclusion of any premiums for forced placed physical damage
insurance covering the Financed Vehicle.
(j) No Defenses. No right of rescission, setoff,
counterclaim or defense has been asserted or threatened with respect
to any Standard Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no
liens or claims have been filed for work, labor or materials relating
to a Financed Vehicle that are liens prior to, or equal or coordinate
with, the security interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value
Receivable has a payment that is more than 90 days overdue as of the
related Cutoff Date, and, except as permitted in this paragraph, no
default, breach, violation or event permitting acceleration under the
terms of any Standard Receivable or Fixed Value Receivable has
occurred; and no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable or Fixed Value
Receivable has arisen; and the Seller has not waived and shall not
waive any of the foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that the Obligor has obtained physical
damage insurance covering the Financed Vehicle and under the terms of
the Standard Receivable and Fixed Value Receivable the Obligor is
required to maintain such insurance.
(n) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
Standard Receivables and Fixed Value Receivables from the Seller to
the Issuer and that the beneficial interest in and title to the
Standard Receivables and Fixed Value Receivables not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by
or against the Seller under any bankruptcy law. No Standard
Receivable or Fixed Value Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein contemplated,
the Seller had good and marketable title to each Standard Receivable
and Fixed Value Receivable free and clear of all Liens, encumbrances,
security interests and rights of others and, immediately upon the
transfer thereof, the Issuer shall have good and marketable title to
each Standard Receivable and Fixed Value Receivable, free and clear of
all Liens,
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encumbrances, security interests and rights of others; and the
transfer has been perfected under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement, each Subsequent Transfer Assignment, the Sale and
Servicing Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard Receivables and Fixed Value
Receivables, and to give the Indenture Trustee a first perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy
of each Standard Receivable and Fixed Value Receivable.
(r) Maturity of Receivables. Each Standard Receivable and
Fixed Value Receivable has a final maturity date not later than
________________.
(s) Scheduled Payments. (A) Each Standard Receivable and
Fixed Value Receivable has a first Scheduled Payment due, in the case
of Precomputed Receivables, or a scheduled due date, in the case of
Simple Interest Receivables, on or prior to the end of the month
following the related Cutoff Date and (B) no Standard Receivable or
Fixed Value Receivable has a payment that is more than 90 days overdue
as of the related Cutoff Date, and has a final scheduled payment date
no later than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are
kept at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later than
the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable
and Fixed Value Receivable has an outstanding gross balance of at
least $1,000.
(w) Financing. Approximately ____% of the aggregate
principal balance of the Initial Receivables, constituting ____% of
the number of Initial Receivables as of the Initial Cutoff Date,
represent vehicles financed at new vehicle rates; the remainder of the
Initial Receivables represent financing of used vehicles;
approximately ____% of the aggregate principal balance of the Initial
Receivables represent financing of vehicles manufactured or
distributed by Chrysler Corporation; approximately ____% of the
aggregate principal balance of the Initial Receivables as of the
Initial Cutoff Date represent Precomputed Receivables; and the
remainder of the Initial Receivables represent Simple Interest
Receivables; and ___% of the aggregate principal balance of
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the Initial Receivables as of the Initial Cutoff Date consists of
Fixed Value Receivables. The aggregate Principal Balance of the
Initial Receivables, as of the Initial Cutoff Date, is $____________.
For the purposes of this subparagraph (w), Initial Receivables shall
mean only that portion of the Receivables with respect to which the
Trust has or will have an ownership interest.
(x) No Bankruptcies or First-Time Buyers. No Obligor on any
Standard Receivable or Fixed Value Receivable as of the related
Subsequent Cutoff Date was noted in the related Receivable File as
having filed for bankruptcy, and no such Obligor financed a Financed
Vehicle under CCC's "New Finance Buyer Plan" program.
(y) No Repossessions. No Financed Vehicle securing any
Standard Receivable or Fixed Value Receivable is in repossession
status.
(z) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(aa) Agreement. The representations and warranties of the
Seller in Section 6.01 are true and correct.
SECTION 3.02. Repurchase upon Breach. The Seller, the Servicer or
the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the
Owner Trustee or receipt by the Owner Trustee of written notice from the Seller
or the Servicer of such breach, the Seller shall be obligated to repurchase any
Receivable materially and adversely affected by any such breach as of such last
day (or, at the Seller's option, the last day of the first Collection Period
following the discovery). In consideration of the repurchase of any such
Receivable, the Seller shall remit the Purchase Amount, in the manner specified
in Section 5.05. Subject to the provisions of Section 6.03, the sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.01 and the agreement contained in this Section shall be
to require the Seller to repurchase Receivables pursuant to this Section,
subject to the conditions contained herein.
SECTION 3.03. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date (in the case of the Initial Receivables, if any)
and the applicable Subsequent Transfer Date (in the case of Subsequent
Receivables) with respect to each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
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(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents that
the Servicer or the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller
in the Financed Vehicle; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Standard Receivable or Fixed Value
Receivable, an Obligor or a Financed Vehicle.
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files as custodian for the benefit of
the Issuer and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the Issuer
to comply with this Agreement. In performing its duties as custodian the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable automotive receivables that the Servicer services
for itself or others. The Servicer shall conduct, or cause to be conducted,
periodic audits of the Receivable Files held by it under this Agreement and of
the related accounts, records and computer systems, in such a manner as shall
enable the Issuer or the Indenture Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Issuer
and the Indenture Trustee any failure on its part to hold the Receivable Files
and maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review by
the Issuer or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B or
at such other office as shall be specified to the Issuer and the Indenture
Trustee by written notice not later than 90 days after any change in location.
The Servicer shall make available to the Issuer and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may
designate, as soon as practicable.
SECTION 3.05. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of the
Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and each
of their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory
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damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trust, the Owner Trustee or the
Indenture Trustee or any of their respective officers, directors, employees and
agents as the result of any improper act or omission in any way relating to the
maintenance and custody by the Servicer as custodian of the Receivable Files;
provided, however, that the Servicer shall not be liable to the Owner Trustee
for any portion of any such amount resulting from the willful misfeasance, bad
faith or negligence of the Owner Trustee and the Servicer shall not be liable
to the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
if Initial Receivables are transferred to the Issuer or, if no such Initial
Receivables are transferred to the Issuer, the Closing Date, and shall continue
in full force and effect until terminated pursuant to this Section. If CCC
shall resign as Servicer in accordance with the provisions of this Agreement or
if all of the rights and obligations of any Servicer shall have been terminated
under Section 8.01, the appointment of such Servicer as custodian shall be
terminated by the Indenture Trustee or by the Holders of Notes evidencing not
less than 25% of the Outstanding Amount of the Notes or, with the consent of
Holders of the Notes evidencing not less than 25% of the Outstanding Amount of
the Notes, by the Owner Trustee or by Certificateholders evidencing not less
than 25% of the Certificate Balance, in the same manner as the Indenture
Trustee or such Holders may terminate the rights and obligations of the
Servicer under Section 8.01. The Indenture Trustee or, with the consent of the
Indenture Trustee, the Owner Trustee may terminate the Servicer's appointment
as custodian, with cause, at any time upon written notification to the
Servicer, and without cause upon 30 days' prior written notification to the
Servicer. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of
the Issuer (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it
services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Owner Trustee and the Indenture Trustee
with respect to distributions and making Advances pursuant to Section 5.04.
Subject to the provisions of Section 4.02, the Servicer shall follow its
customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute
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and deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders or any of them, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer
(in the case of a Receivable other than a Purchased Receivable) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled
to enforce such Receivable the Owner Trustee shall, at the Servicer's expense
and direction, take steps to enforce such Receivable, including bringing suit
in its name or the name of the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders. The Owner Trustee shall upon the
written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others.
The Servicer shall allocate collections between principal and interest in
accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself or others.
The Servicer may grant extensions, rebates or adjustments on a Standard
Receivable or Fixed Value Receivable, which shall not, for the purposes of this
Agreement, modify the original due dates or amounts of the Scheduled Payments
on a Precomputed Receivable or the original due dates or amounts of the
originally scheduled payments of interest on Simple Interest Receivables;
provided, however, that if the Servicer extends the date for final payment by
the Obligor of any Receivable beyond the Final Scheduled Maturity Date, it
shall promptly repurchase the Receivable from the Issuer in accordance with the
terms of Section 4.07. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course
of servicing a Receivable. The Servicer shall not agree to any alteration of
the interest rate on any Receivable or of the amount of any Scheduled Payment
on Precomputed Receivables or the originally scheduled payments on Simple
Interest Receivables.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
in its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
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SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Standard Receivable or the Fixed Value Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Standard Receivable and Fixed Value Receivable in the related
Financed Vehicle. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle or for
any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release
the Financed Vehicle securing any Receivable from the security interest granted
by such Receivable in whole or in part except in the event of payment in full
by the Obligor thereunder or repossession, nor shall the Servicer impair the
rights of the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in such Receivable, nor shall the Servicer increase the number of
scheduled payments due under a Standard Receivable or Fixed Value Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or
the Owner Trustee shall inform the other party and the Indenture Trustee and
the Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected by
such breach as of such last day. If the Servicer takes any action during any
Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.05. For purposes of this Section, the Purchase
Amount shall consist in part of a release by the Servicer of all rights of
reimbursement with respect to Outstanding Precomputed Advances and Outstanding
Simple Interest Advances on the Receivable. Subject to Section 7.02, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders with respect to a breach pursuant to
Section 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Receivables pursuant to this Section. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Receivable pursuant to this Section.
SECTION 4.08. Servicing Fee. The Servicing Fee for a Distribution
Date shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and
(c) the Pool Balance as of the first day of the preceding Collection Period.
The Servicer shall also be entitled to all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according to
the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s"), and other
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administrative fees or similar charges allowed by applicable law with respect
to the Receivables, collected (from whatever source) on the Receivables, plus
any reimbursement pursuant to Section 7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 a.m. (New
York Time) on each Payment Determination Date, the Servicer shall deliver to
the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Sections 5.06 and 5.07 for the related Collection
Period. On each Reconciliation Determination Date, the Servicer shall deliver
to the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate (which may be
combined with the Servicer's Certificate required in the preceding sentence)
(i) reconciling the amounts distributed pursuant to Sections 5.06 and 5.07 on
the related Distribution Date with the Total Distribution Amount, Interest
Distribution Amount and Regular Principal Distribution Amount as recalculated
on such Reconciliation Determination Date (including, if required, Precomputed
Advances by the Servicer pursuant to Section 5.04), (ii) calculating the
Noteholders' Reconciliation Principal Adjustment Amount and the
Certificateholders' Reconciliation Principal Adjustment Amount and (iii)
containing the information necessary to make the transfers to the Reserve
Account and the distributions to the Company pursuant to Sections 5.06 and
5.07. Receivables to be purchased by the Servicer or to be repurchased by the
Seller shall be identified by the Servicer by account number with respect to
such Receivable (as specified in Schedule A).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture Trustee,
on or before April 30 of each year beginning April 30, 199_, an Officers'
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or such shorter period as shall have elapsed since the Closing Date) and of
its performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officers and
the nature and status thereof. The Indenture Trustee shall send a copy of such
certificate and the report referred to in Section 4.11 to the Rating Agencies.
A copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Certificateholder, Certificate Owner, Noteholder or Note Owner
by a request in writing to the Owner Trustee addressed to the Corporate Trust
Office. Upon the telephone request of the Owner Trustee, the Indenture Trustee
will promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section
8.01(a) or (b).
SECTION 4.11. Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render
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other services to the Servicer, the Seller or their Affiliates, to deliver to
the Owner Trustee and the Indenture Trustee on or before April 30 of each year
beginning April 30, 199_, a report addressed to the Board of Directors of the
Servicer, to the effect that such firm has examined the financial statements of
CFC and issued its report thereon and that such examination (a) was made in
accordance with generally accepted auditing standards and accordingly included
such tests of the accounting records and such other auditing procedures as such
firm considered necessary in the circumstances; (b) included tests relating to
automotive loans serviced for others in accordance with the requirements of the
Uniform Single Audit Program for Mortgage Bankers (the "Program"), to the
extent the procedures in such Program are applicable to the servicing
obligations set forth in this Agreement; and (c) except as described in the
report, disclosed no exceptions or errors in the records relating to automobile
and light truck loans serviced for others that, in the firm's opinion,
paragraph four of such Program requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
and Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the 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.
SECTION 4.13. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Receivables. The fees and expenses of the subservicer shall
be as agreed between the Servicer and its subservicer from time to time, and
none of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
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ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts. (a) (i) The
Servicer, for the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders
and the Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Pre-Funding
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(iii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account (the "Note Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders.
(iv) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Pre-Funding
Account, the Note Distribution Account and the Reserve Account (collectively
the "Trust Accounts") shall be invested by the Indenture Trustee in Eligible
Investments selected in writing by the Servicer or an investment manager
selected by the Servicer, which investment manager shall have agreed to comply
with the terms of this Agreement as it relates to investing such funds;
provided, however, it is understood and agreed that the Indenture Trustee shall
not be liable for any loss arising from such investment in Eligible
Investments. All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders or the
Noteholders, as applicable; provided, that on each Payment Determination Date
all interest and other investment income (net of losses and investment
expenses) on funds on deposit therein shall be deposited into the Collection
Account and shall be deemed to constitute a portion of the Interest
Distribution Amount; and provided, further, that any interest and other
investment income on Eligible Investment Receivables in the Reserve Account
earned in respect of a Collection Period shall be deposited in the Collection
Account on the second Payment Determination Date following such Collection
Period and shall be deemed to constitute a portion of the Interest Distribution
Amount for the related Distribution Date. Other than as permitted by the
Rating Agencies, funds on deposit in the Collection Account, the Pre-Funding
Account, the Reserve Account and the Note Distribution
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Account shall be invested in Eligible Investments that will mature (A) not
later than the Business Day immediately preceding the next Distribution Date or
(B) on such next Distribution Date if either (x) such investment is held in the
trust department of the institution with which the Collection Account, the
Pre-Funding Account, the Reserve Account, the Note Distribution Account or the
Certificate Distribution Account, as applicable, is then maintained and is
invested in a time deposit of Bankers Trust Company rated at least A-1 by
Standard & Poor's and P-1 by Moody's (such account being maintained within the
trust department of Bankers Trust Company) or (y) the Indenture Trustee (so
long as the short-term unsecured debt obligations of the Indenture Trustee are
either (i) rated at least P-1 by Moody's and A-1 by Standard & Poor's on the
date such investment is made or (ii) guaranteed by an entity whose short-term
unsecured debt obligations are rated at least P-1 by Moody's and A-1 by
Standard & Poor's on the date such investment is made) has agreed to advance
funds on such Distribution Date to the Note Distribution Account and the
Certificate Distribution Account in the amount payable on such investment on
such Distribution Date pending receipt thereof to the extent necessary to make
distributions on such Distribution Date; provided that Eligible Investment
Receivables need not satisfy such maturity requirements. The guarantee
referred to in clause (y) of the preceding sentence shall be subject to the
Rating Agency Condition. For the purpose of the foregoing, unless the
Indenture Trustee affirmatively agrees in writing to make such advance with
respect to such investment prior to the time an investment is made, it shall
not be deemed to have agreed to make such advance. Funds deposited in a Trust
Account on a day which immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (including all income thereon)
and all such funds, investments, proceeds and income shall be part of
the Trust Estate. The Trust Accounts shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the
Noteholders and the Certificateholders, as the case may be. If, at
any time, any of the Trust Accounts ceases to be an Eligible Deposit
Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a
new Trust Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section 5.01(c)(i);
and each such Eligible Deposit Account shall be subject to the
exclusive custody and control of the Indenture Trustee, and
the Indenture Trustee shall have sole signature authority with
respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the Indenture Trustee
in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition,
solely
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by the Indenture Trustee or a financial intermediary (as such
term is defined in Section 8-313(4) of the UCC) acting solely
for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
federal book-entry regulations shall be delivered in
accordance with paragraph (b) of the definition of "Delivery"
and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in
such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (C) above shall be delivered to
the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
SECTION 5.02. Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or
on behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables and not including Fixed Value Payments) and all Liquidation
Proceeds, both as collected during the Collection Period. Notwithstanding the
foregoing, for so long as (i) CCC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii)(x) CCC is a
wholly-owned subsidiary of CFC and CFC maintains a short-term rating of at
least A-1 by Standard & Poor's and P-1 by Moody's (and for five Business Days
following a reduction in either such rating) or (y) prior to ceasing daily
remittances, the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Servicer shall remit such collections with
respect to the preceding calendar month to the Collection Account on the
Payment Determination Date immediately preceding the related Distribution Date.
For purposes of this Article V the phrase "payments by or on behalf of
Obligors" shall mean payments made with respect to the Receivables by Persons
other than the Servicer or the Seller.
SECTION 5.03. Application of Collections. (a) All collections for
the Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 5.04(a) and, in the case
of Simple Interest Receivables, to reduce Outstanding
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Simple Interest Advances to the extent described in Section 5.04(b).
Next, any excess shall be applied, in the case of Precomputed
Receivables, to the Scheduled Payment and, in the case of Simple
Interest Receivables, to interest and principal in accordance with the
Simple Interest Method. With respect to Precomputed Receivables, any
remaining excess shall be added to the Payahead Balance, and shall be
applied to prepay the Precomputed Receivable, but only if the sum of
such excess and the previous Payahead Balance shall be sufficient to
prepay the Receivable in full. Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the Payahead
Balance.
If the Servicer is required to return a Payahead to the related Obligor, the
amount to be returned shall be retained by the Servicer from collections on the
Receivables allocable to principal and paid by the Servicer to such Obligor.
(b) All Liquidation Proceeds and any subsequent recoveries with
respect to any Fixed Value Receivable shall be applied first to the related
Receivable and only after the payment in full of the Principal Balance thereof
plus accrued but unpaid interest thereon shall any such Liquidation Proceeds or
recoveries be applied to, or constitute, the related Fixed Value Payment.
SECTION 5.04. Advances. (a) As of the close of business on the last
day of each Collection Period, if the payments by or on behalf of the Obligor
on a Precomputed Receivable (other than a Purchased Receivable) shall be less
than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount, a "Precomputed Advance"), to the extent that the Servicer, at its
sole discretion, shall determine that the Precomputed Advance shall be
recoverable from the Obligor, the Purchase Amount, Liquidation Proceeds or
proceeds of any other Precomputed Receivables. With respect to each
Precomputed Receivable, the Precomputed Advance shall increase Outstanding
Precomputed Advances. Outstanding Precomputed Advances shall be reduced by
subsequent payments by or on behalf of the Obligor, collections of Liquidation
Proceeds in respect of such Precomputed Receivables or payments of the Purchase
Amount with respect to such Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust and Outstanding Precomputed Advances with
respect to such Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation
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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 in respect of principal of Simple
Interest Receivables or in respect of Eligible Investment Receivables.
SECTION 5.05. Additional Deposits. The Servicer shall deposit in the
Collection Account on the Reconciliation Determination Date for the related
Collection Period the aggregate Advances pursuant to Section 5.04. To the
extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 5.04(b) on the date required, the Servicer shall notify the Indenture
Trustee to withdraw such amount (or, if determinable, such portion of such
amount as does not represent advances for delinquent interest) from the Reserve
Account and deposit such amount in the Collection Account. The Servicer and
the Seller shall deposit or cause to be deposited in the Collection Account the
aggregate Purchase Amount with respect to Purchased Receivables and the
Servicer shall deposit therein all amounts to be paid under Section 9.01. The
Servicer will deposit the aggregate Purchase Amount with respect to Purchased
Receivables when such obligations are due, unless the Servicer shall not be
required to make daily deposits pursuant to Section 5.02. All such other
deposits shall be made on the Reconciliation Determination Date for the related
Collection Period.
SECTION 5.06. Distributions. (a) If it is acceptable to each Rating
Agency without a reduction in the rating of any Class of Notes or the
Certificates, as evidenced by a letter from each Rating Agency to the Indenture
Trustee, the Servicer will be entitled to payment of the Servicing Fee in
respect of a Collection Period (and all unpaid Servicing Fees from prior
Collection Periods) at the beginning of each Collection Period from payments on
the Receivables received during such Collection Period. The amount of any
Servicing Fee so paid to the Servicer will not be subject to reconciliation on
the related Reconciliation Determination Date.
(b) (i) On each Payment Determination Date, the Servicer
shall calculate all amounts required to determine the amounts to be
deposited in the Note Distribution Account and the Certificate
Distribution Account.
(ii) On each Distribution Date, the Servicer shall
instruct the Indenture Trustee (based on the information contained in
the Servicer's Certificate delivered on the related Payment
Determination Date pursuant to Section 4.09) to make the following
deposits and distributions for receipt by the Servicer or deposit in
the applicable account by 11:00 a.m. (New York time), to the extent of
the Total Distribution Amount, in the following order of priority:
(A) to the extent the Rating Agencies do not
permit payment of the Servicing Fee pursuant to clause (a)
above, to the Servicer, from the Interest
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Distribution Amount, the Servicing Fee (and all unpaid
Servicing Fees from prior Collection Periods);
(B) to the Note Distribution Account, from the
Total Distribution Amount remaining after the application of
Section 5.06(a) and clause (A), the Noteholders' Interest
Distributable Amount;
(C) to the Note Distribution Account, from the
Total Distribution Amount remaining after the application of
Section 5.06(a) and clauses (A) and (B), the Noteholders'
Principal Distributable Amount;
(D) to the Certificate Distribution Account, from
the Total Distribution Amount remaining after the application
of Section 5.06(a) and clauses (A) through (C), the
Certificateholders' Interest Distributable Amount;
(E) to the Certificate Distribution Account, from
the Total Distribution Amount remaining after the application
of Section 5.06(a) and clauses (A) through (D), the
Certificateholders' Principal Distributable Amount;
(F) to the Reserve Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (E) (it being understood that
the Acceleration Principal Distribution Amount is a function
of and subject to the amount required to be deposited in the
Reserve Account pursuant to this clause (E)), the amount, if
any, necessary to reinstate the balance in the Reserve Account
up to the Specified Reserve Account Balance; and
(G) to the Reserve Account, the portion, if any,
of the Total Distribution Amount remaining after the
application of Section 5.06(a) and clauses (A) through (F).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the
Certificate Balance is reduced to zero.
(c) On each Reconciliation Determination Date, the Servicer shall
calculate for the related Distribution Date, the Noteholders' Interest
Distributable Amount, the Noteholders' Principal Distributable Amount, the
Certificateholders' Interest Distributable Amount, the Certificateholders'
Principal Distributable Amount, the Noteholders' Reconciliation Principal
Adjustment Amount and the Certificateholders' Reconciliation Principal
Adjustment Amount.
SECTION 5.07. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the Notes
and the Certificates.
(b) (i) After giving effect to clause (ii) below, if the
amount on deposit in the Reserve Account on any Distribution Date
(after giving effect to all deposits thereto or withdrawals therefrom
on such Distribution Date) is greater than the Specified
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Reserve Account Balance for such Distribution Date, the Servicer shall
instruct the Indenture Trustee to distribute the amount of such excess
to the Seller, which distribution may include Eligible Investment
Receivables; provided, that no such excess shall be distributed unless
the letter from a firm of independent certified public accountants
required to be delivered on or before _________ __, 199_ pursuant to
Section 2.02(b)(2)(v) in respect of the Collection Period ending on
______ __, 199_ has been delivered to the Owner Trustee and the
Indenture Trustee; and provided, further, that any such excess
(whether allocable to principal or interest) that is allocable to
Eligible Investment Receivables shall be distributed only on the next
succeeding Distribution Date.
(ii) On each Distribution Date subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any Class of Notes,
unless such rating has been restored, if the amount on deposit in the
Reserve Account (taking into account any deposits therein pursuant to
Section 5.06(b) and withdrawals therefrom on such date pursuant to
Section 5.07(c), (d) or (e)) is greater than the Specified Reserve
Account Balance for such Distribution Date, then the Servicer shall
instruct the Indenture Trustee to include the amount of such excess in
the Noteholders' Reconciliation Principal Adjustment Amount and to
deposit the amount of such excess (up to the amount of cash or cash
equivalents in the Reserve Account) to the Collection Account for
deposit to the Note Distribution Account for distribution to
Noteholders as an accelerated payment of principal on such
Distribution Date; provided, that the amount of such deposit shall not
exceed the outstanding principal balance of the Notes after giving
effect to all other payments of principal to be made on such date.
(c) If the Servicer determines pursuant to Section 5.04 that it is
required to make an Advance on a Reconciliation Determination Date and does not
do so from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.04 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Advances, and the Servicer shall within
two Business Days replace any funds in the Reserve Account so used.
(d) (i) In the event that the Noteholders' Distributable
Amount for a Distribution Date exceeds the sum of the amounts
deposited into the Note Distribution Account pursuant to Section
5.06(b)(ii)(B) and (C) on such Distribution Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Distribution Date an amount equal to such excess, to the extent
of funds available therein up to the Available Amount, and deposit
such amount into the Note Distribution Account.
(ii) In the event that the Noteholders' Principal
Distributable Amount on the Class A-1 Final Scheduled Distribution
Date, the Class A-2 Final Scheduled Distribution Date or the Class A-3
Final Scheduled Distribution Date exceeds the amount deposited into
the Note Distribution Account pursuant to Section 5.06(b)(ii)(C) on
such Distribution Date, the Servicer shall instruct the Indenture
Trustee to withdraw from
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the Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein up to the Available
Amount, and deposit such amount into the Note Distribution Account.
(e) (i) In the event that the Certificateholders'
Distributable Amount for a Distribution Date exceeds the sum of the
amounts deposited into the Certificate Distribution Account pursuant
to Section 5.06(b)(ii)(D) and (E) on such Distribution Date, the
Servicer shall instruct the Indenture Trustee to withdraw from the
Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein up to the Available
Amount after giving effect to paragraphs (c) and (d) above, and
deposit such amount into the Certificate Distribution Account on such
Distribution Date.
(ii) In the event that the Certificateholders' Monthly
Interest Distributable Amount for a Distribution Date exceeds the
amount deposited in the Certificate Distribution Account pursuant to
Section 5.06(b)(ii)(D), the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available
therein, after giving effect to paragraphs (d)(i) and (e)(i) above, up
to the Certificate Interest Reserve Amount with respect to such
Distribution Date, and deposit such amount into the Certificate
Distribution Account.
(iii) In the event that the Certificateholders' Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds
the amount deposited in the Certificate Distribution Account pursuant
to Section 5.06(b)(ii)(E), the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraphs (d) and (e)(i) above, and
deposit such amount into the Certificate Distribution Account.
(f) Following the payment in full of the aggregate Outstanding
Amount of the Notes and the Certificate Balance and of all other amounts owing
or to be distributed hereunder or under the Indenture or the Trust Agreement to
Noteholders and Certificateholders and the termination of the Trust, any amount
remaining on deposit in the Reserve Account shall be distributed to the Seller
and any Eligible Investment Receivables in the Reserve Account shall be
transferred to the Seller.
(g) On the Final Scheduled Distribution Date, if the amount of
funds remaining in the Reserve Account (after all other distributions to be
made from the Reserve Account pursuant to this Section have been made, other
than paragraphs (b)(i) and (f)) is in excess of the amounts described below, a
portion of such excess according to the following schedule shall be deposited
in the Certificate Distribution Account for distribution to Certificateholders:
(i) with respect to all such funds in the Reserve
Account in excess of $__________ but which do not exceed $__________,
20% of such amount;
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(ii) with respect to all such funds in the Reserve
Account in excess of $__________ but which do not exceed $__________,
40% of such amount;
(iii) with respect to all such funds in the Reserve
Account in excess of $__________ but which do not exceed $__________,
60% of such amount;
(iv) with respect to all such funds in the Reserve
Account in excess of $__________ but which do not exceed $__________,
80% of such amount; and
(v) with respect to all such funds in the Reserve
Account in excess of $__________, 100% of such amount.
The amounts to be deposited in the Certificate Distribution Account pursuant to
the preceding sentence are in excess of all amounts otherwise required to be
deposited in the Certificate Distribution Account pursuant to this Agreement,
notwithstanding anything to the contrary contained herein.
SECTION 5.08. Pre-Funding Account. (a) On the Closing Date, the
Owner Trustee will deposit, on behalf of the Seller, in the Pre-Funding
Account $_____________ (less an amount equal to the aggregate Principal Balance
of any Subsequent Receivables transferred to the Trust on the Closing Date
pursuant to Section 2.02(c), which amount shall be applied in accordance with
the following sentence) from the net proceeds of the sale of the Notes and the
Certificates. On each Subsequent Transfer Date, the Servicer shall instruct
the Indenture Trustee to withdraw from the Pre-Funding Account an amount equal
to (i) the Principal Balance of the Subsequent Receivables transferred to the
Issuer on such Subsequent Transfer Date less the Reserve Account Initial
Deposit for such Subsequent Transfer Date, and to distribute such amount to or
upon the order of the Seller upon satisfaction of the conditions set forth in
Section 2.02(b) with respect to such transfer, and (ii) the Reserve Account
Initial Deposit for such Subsequent Transfer Date and, on behalf of the Seller,
to deposit such amount in the Reserve Account.
(b) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on which the Funding Period ends (or, if the Funding Period
does not end on a Distribution Date, on the first Distribution Date following
the end of the Funding Period) or (y) the Pre-Funded Amount has been reduced
to $_______ or less on any Payment Determination Date, in either case after
giving effect to any reductions in the Pre-Funded Amount on such Distribution
Date or Payment Determination Date pursuant to paragraph (a) above, the
Servicer shall instruct the Indenture Trustee to withdraw from the Pre-Funding
Account, in the case of (x), on such Distribution Date or, in the case of (y),
on the Distribution Date immediately succeeding such Payment Determination
Date, (i) if the Pre-Funded Amount is equal to or less than $_______, the
Pre-Funded Amount and deposit such amount in the Note Distribution Account for
payment as principal of the Class A-1 Notes up to the Outstanding Amount
thereof and then for payment of principal of the Class A-2 Notes, and (ii) if
the Pre-Funded Amount is greater than $_______, (A) amounts equal to the
Pre-Funded Percentage for each Class of Notes of the Pre-Funded Amount and
deposit such amounts in the Note Distribution Account and (B) an amount equal
to the Pre-Funded Percentage for the Certificates of the Pre-Funded Amount and
deposit such amount in the Certificate Distribution Account. If the Pre-
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Funded Amount is greater than $_______, the Seller will (A) deposit into the
Note Distribution Account amounts equal to the Noteholders' Prepayment Premium
for each Class of Notes and (B) deposit into the Certificate Distribution
Account an amount equal to the Certificateholders' Prepayment Premium.
SECTION 5.09. Statements to Certificateholders and Noteholders. (a)
On each Distribution Date, the Servicer shall provide to the Indenture Trustee
(with a copy to the Rating Agencies and each Paying Agent) for the Indenture
Trustee to forward to each Noteholder of record as of the most recent Record
Date and to the Owner Trustee (with a copy to each Paying Agent) for the Owner
Trustee to forward to each Certificateholder of record as of the most recent
Record Date a statement substantially in the form of Exhibits A and B,
respectively, setting forth at least the following information as to the Notes
and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to
principal (including any Noteholders' Reconciliation Principal
Adjustment Amount and Certificateholders' Reconciliation Principal
Adjustment Amount) allocable to each Class of Notes and to the
Certificates;
(ii) the amount of such distribution allocable to
interest allocable to each Class of Notes and to the Certificates;
(iii) the outstanding principal balance of each Class of
Notes, the Note Pool Factor for each such Class, the Certificate
Balance and the Certificate Pool Factor as of the close of business on
the last day of the preceding Collection Period, after giving effect
to payments allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the
Servicer with respect to the related Collection Period; and
(v) for the final Distribution Date with respect to the
Funding Period, the amount of any remaining Pre-Funded Amount that has
not been used to fund the purchase of Subsequent Receivables.
Each amount set forth pursuant to clause (i), (ii) or (iv) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Certificate or Note, as applicable.
(b) On each Reconciliation Determination Date, the Servicer shall
provide to the Indenture Trustee (with a copy to the Rating Agencies and each
Paying Agent) for the Indenture Trustee to forward to each Noteholder of record
as of the most recent Record Date and to the Owner Trustee (with a copy to each
Paying Agent) for the Owner Trustee to forward on the next Distribution Date to
each Certificateholder of record as of the most recent Record Date a statement
substantially in the form of Exhibits A-1 and B-1, respectively, reconciling
the amounts shown on the related Distribution Date statements with the amounts
calculated pursuant to Section 5.06(b) hereof, and setting forth at least the
following additional information, to the extent applicable:
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(i) the amount of Realized Losses, if any, with respect
to the related Collection Period;
(ii) the balance of the Reserve Account on such
Reconciliation Determination Date, after giving effect to deposits and
withdrawals to be made on the next following Distribution Date, if
any;
(iii) the Noteholders' Reconciliation Principal Adjustment
Amount or Certificateholders' Reconciliation Principal Adjustment
Amount, as applicable, (positive or negative) calculated on such
Reconciliation Determination Date;
(iv) the aggregate Payahead Balance;
(v) the Pool Balance as of the close of business on the
last day of the related Collection Period, after giving effect to
payments allocated to principal reported under subsection (a)(i)
above, as reconciled; and
(vi) for Distribution Dates during the Funding Period, the
remaining Pre-Funded Amount.
Each amount set forth reconciling amounts on the Distribution Date
statement under clauses (a)(i), (ii) or (iv) above, and the amount set forth
under clause (b)(iii) above, shall be expressed as a dollar amount per $1,000
of original principal balance of a Certificate or Note, as applicable.
SECTION 5.10. Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to the Collection Period net
of distributions to be made to the Servicer with respect to the Collection
Period. The Servicer, however, will account to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders as if all
deposits, distributions and transfers were made individually.
[SECTION 5.11. Transfer of the Class A-1 Notes. In the event any
Holder of a Class A-1 Note shall wish to transfer such Note, the Seller shall
provide to such Holder and any prospective transferee designated by such Holder
information regarding the Class A-1 Notes and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Class A-1 Note without
registration thereof under the Securities Act of 1933, as amended, pursuant to
the exemption from registration provided by Rule 144A.]
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ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Initial Receivables, if any, and as of the applicable Subsequent Transfer Date,
in the case of the Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a corporation in good standing under
the laws of the State of Michigan, with the corporate power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire and own the Standard
Receivables and Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its business
shall require such qualifications.
(c) Power and Authority. The Seller has the corporate power
and authority to execute and deliver this Agreement, each Subsequent
Transfer Assignment and each Eligible Investment Transfer Assignment
and to carry out their respective terms; the Seller has full power and
authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer, and the Seller shall have duly
authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been, and the execution, delivery and performance of
each Subsequent Transfer Assignment and Eligible Investment Transfer
Assignment has been or will be on or before the related Subsequent
Transfer Date, duly authorized by the Seller by all necessary
corporate action.
(d) Binding Obligation. This Agreement constitutes, and each
Subsequent Transfer Assignment and Eligible Investment Transfer
Assignment when executed and delivered by the Seller will constitute,
a legal, valid and binding obligation of the Seller enforceable in
accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or bylaws of the
Seller, or any indenture, agreement or other instrument to which the
Seller is a party or by which it is bound; or result in the creation
or imposition of any Lien upon any of its properties
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pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or violate
any law or, to the best of the Seller's knowledge, any order, rule or
regulation applicable to the Seller of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there
are no proceedings or investigations pending, or threatened, before
any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or
its properties: (i) asserting the invalidity of this Agreement, the
Indenture or any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates or (iv) which might adversely affect the federal
or state income tax attributes of the Notes or the Certificates.
SECTION 6.02. Corporate Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Seller and its Affiliates
(including the Company) will be conducted on an arm's-length basis.
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company and the
Servicer and any of the officers, directors, employees and agents of
the Issuer, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated herein and in the
Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Receivables or
Eligible Investment Receivables, or federal or other income taxes
arising out of distributions on the Certificates or the Notes) and
costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the
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Noteholders and any of the officers, directors, employees and agents
of the Issuer, the Owner Trustee and the Indenture Trustee from and
against any loss, liability or expense incurred by reason of (i) the
Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement
and (ii) the Seller's or the Issuer's violation of federal or state
securities laws in connection with the offering and sale of the Notes
and the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be
due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad faith
or negligence (except for errors in judgment) of the Indenture
Trustee; or (ii) in the case of the Owner Trustee, shall arise from
the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under this Agreement, shall be the successor to the Seller
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 3.01 shall have been breached and no Servicer Default, and
no event that, after notice or lapse of time, or both, would become a Servicer
Default shall have occurred and be continuing, (ii) the Seller shall have
delivered to the Owner Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iii) the Rating Agency
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Condition shall have been satisfied with respect to such transaction and (iv)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 6.05. Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 6.06. Seller May Own Certificates or Notes. The Seller and
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Seller or an Affiliate thereof, except as expressly provided
herein or in any Basic Document.
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Initial Receivables, if any, and as of the applicable Subsequent Transfer Date,
in the case of the Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under
the laws of the state of its incorporation, with the corporate power
and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire, own, sell and service the
Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its
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business (including the servicing of the Standard Receivables and the
Fixed Value Receivables as required by this Agreement) shall require
such qualifications.
(c) Power and Authority. The Servicer has the corporate
power and authority to execute and deliver this Agreement and to carry
out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary
corporate action.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance
with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or bylaws of the
Servicer, or any indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; or result in the creation
or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than
this Agreement); or violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Servicer or its properties.
(f) No Proceedings. To the Servicer's best knowledge, there
are no proceedings or investigations pending, or threatened, before
any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
its properties: (i) asserting the invalidity of this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates, or (iv) relating to the Servicer and which might
adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable is shown on
the Receivable Files as the subject of a bankruptcy proceeding.
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders,
the Certificateholders, the Company and the Seller and any of the
officers, directors, employees and agents of
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the Issuer, the Owner Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, damages, claims and
liabilities, arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed
Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Company, the Certificateholders and the Noteholders and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that
such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of CCC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole, or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Chrysler
Corporation, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Servicer Default, and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred and
be continuing, (ii) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction, (iv) immediately after giving effect to such transaction, the
successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and (v)
the Servicer shall have delivered to the Owner
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Trustee and the Indenture Trustee an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Indenture Trustee, respectively, in the Receivables and reciting the
details of such filings or (B) no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii), (iv) and (v) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c) above.
SECTION 7.04. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the Basic Documents and the rights and duties of the parties to this Agreement
and the Basic Documents and the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture.
SECTION 7.05. CCC Not To Resign as Servicer. Subject to the
provisions of Section 7.03, CCC shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of CCC shall be communicated to the Owner Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion
of Counsel to such effect delivered to the Owner Trustee and the Indenture
Trustee concurrently with or promptly after such notice. No such resignation
shall become effective until the Indenture Trustee or a successor Servicer
shall have (i) assumed the responsibilities and obligations of CCC in
accordance with Section 8.02 and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
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ARTICLE VIII
Default
SECTION 8.01. Servicer Default. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate
Distribution Account any required payment or to direct the Indenture
Trustee to make any required distributions therefrom, which failure
continues unremedied for a period of three Business Days after written
notice of such failure is received by the Servicer from the Owner
Trustee or the Indenture Trustee or after discovery of such failure by
an officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may
be, duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may
be) set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A)
to the Servicer or the Seller (as the case may be) by the Owner
Trustee or the Indenture Trustee or (B) to the Servicer or the Seller
(as the case may be), and to the Owner Trustee and the Indenture
Trustee by the Holders of Notes or Certificates, as applicable,
evidencing not less than 25% of the Outstanding Amount of the Notes or
25% of the outstanding Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Owner Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.02 hereof) of
the Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Servicer as may be appointed under
Section 8.02; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer, the Indenture Trustee and the
Owner Trustee in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall
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at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to any Receivable. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section shall
be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Owner Trustee shall give notice thereof
to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later
of (i) the date 45 days from the delivery to the Owner Trustee and the
Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement and
(ii) the date upon which the predecessor Servicer shall become unable to act as
Servicer, as specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of the Servicer's termination hereunder, the Indenture
Trustee shall appoint a successor Servicer, and the successor Servicer shall
accept its appointment (including its appointment as Administrator under the
Administration Agreement as set forth in Section 8.02(b)) by a written
assumption in form acceptable to the Owner Trustee and the Indenture Trustee.
In the event that a successor Servicer has not been appointed at the time when
the predecessor Servicer has ceased to act as Servicer in accordance with this
Section, the Indenture Trustee without further action shall automatically be
appointed the successor Servicer and the Indenture Trustee shall be entitled to
the Servicing Fee. Notwithstanding the above, the Indenture Trustee shall, if
it shall be legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution having a net worth of not
less than $100,000,000 and whose regular business shall include the servicing
of automotive receivables, as the successor to the Servicer under this
Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from serving
as such by law.
SECTION 8.03. Repayment of Advances. If the Servicer shall change,
the predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 5.03 and 5.04 with respect to all
Advances made by the predecessor Servicer.
SECTION 8.04. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the
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Owner Trustee shall give prompt written notice thereof to Certificateholders,
and the Indenture Trustee shall give prompt written notice thereof to
Noteholders and the Rating Agencies.
SECTION 8.05. Waiver of Past Defaults. The Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes or
the Holders (as defined in the Trust Agreement) of Certificates evidencing not
less than a majority of the outstanding Certificate Balance (in the case of any
default which does not adversely affect the Indenture Trustee or the
Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in
writing any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required
deposits to or payments from any of the Trust Accounts in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto.
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the
last day of any Collection Period immediately preceding a Distribution Date as
of which the then outstanding Pool Balance is 10% or less of the Original Pool
Balance and the Class A-1 Notes and the Class A-2 Notes have been paid in full,
the Servicer shall have the option to purchase the Owner Trust Estate, other
than the Trust Accounts and the Certificate Distribution Account; provided,
however, that, unless Moody's agrees otherwise, the Servicer may not effect any
such purchase if the rating of CFC's long-term debt obligations is less than
Baa3 by Moody's, unless the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such purchase would not
constitute a fraudulent conveyance. To exercise such option, the Servicer
shall deposit pursuant to Section 5.05 in the Collection Account an amount
equal to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any such other property held by the
Trust other than the Trust Accounts and the Certificate Distribution Account,
such value to be determined by an appraiser mutually agreed upon by the
Servicer, the Owner Trustee and the Indenture Trustee, and shall succeed to all
interests in and to the Trust. Notwithstanding the foregoing, the Servicer
shall not be permitted to exercise such option unless the amount to be
deposited in the Collection Account pursuant to the preceding sentence is
greater than or equal to the sum of the outstanding principal balance of the
Notes and the Certificate Balance and all accrued but unpaid interest
(including any overdue interest and premium) thereon.
(b) Upon any sale of the assets of the Trust pursuant to Section
9.02 of the Trust Agreement, the Servicer shall instruct the Indenture Trustee
to deposit the proceeds from such sale after all payments and reserves
therefrom have been made (the "Insolvency Proceeds") in the Collection Account.
On the Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the
Servicer shall instruct the Indenture Trustee to make the following deposits
(after the application on such Distribution
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Date of the Total Distribution Amount and funds on deposit in the Reserve
Account pursuant to Sections 5.06 and 5.07) from the Insolvency Proceeds and
any funds remaining on deposit in the Reserve Account (including the proceeds
of any sale of investments therein as described in the following sentence):
(i) to the Note Distribution Account, any portion of
the Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction
in the outstanding principal balance of the Notes to result from the
deposits made in the Note Distribution Account on such Distribution
Date and on prior Distribution Dates);
(iii) to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable Amount not
otherwise deposited into the Certificate Distribution Account on such
Distribution Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance (after giving effect to the reduction in the
Certificate Balance to result from the deposits made in the
Certificate Distribution Account on such Distribution Date).
Any investments on deposit in the Reserve Account or Note Distribution Account
that will not mature on or before such Distribution Date shall be sold by the
Indenture Trustee at such time as will result in the Indenture Trustee
receiving the proceeds from such sale not later than the Payment Determination
Date preceding such Distribution Date. Any Insolvency Proceeds remaining after
the deposits described above shall be paid to the Seller.
(c) As described in Article IX of the Trust Agreement, notice of
any termination of the Trust shall be given by the Servicer to the Owner
Trustee and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
other than Section 5.07(b) and the Owner Trustee will succeed to the rights of,
and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee,
but without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to
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or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance, the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all the outstanding Notes and the Holders (as defined in the Trust
Agreement) of all the outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and the Opinion of Counsel referred to in
Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or
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continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least five days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of the Seller and the Servicer shall have an obligation
to give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Standard Receivable and each Fixed Value Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Receivable, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Receivable and the amounts from time to
time deposited in the Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Standard Receivables and
the Fixed Value Receivables, the Servicer's master computer records (including
any backup archives) that refer to a Standard Receivable or a Fixed Value
Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Standard Receivable or Fixed Value Receivable and that such
Standard Receivable or Fixed Value Receivable is owned by the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Standard Receivable or Fixed Value Receivable
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to, any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Standard Receivable or Fixed Value Receivable, shall indicate clearly that such
Standard Receivable or such Fixed Value Receivable has been sold and is owned
by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents
at any time during normal business hours to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Receivable.
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(h) Upon request, the Servicer shall furnish to the Owner Trustee
or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and, if required pursuant to Section 10.01, of each
amendment hereto and on certain Distribution Dates as required by
Sections 2.02(b)(2)(iv) and 2.05(b)(2)(x), an Opinion of Counsel
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Owner Trustee and the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall
be necessary to preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the first Cutoff Date, an Opinion of Counsel, dated as of
a date during such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such
details are given, or (B) no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
SECTION 10.03. Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller, to Chrysler Financial Corporation, 27777 Franklin Road,
Southfield, Michigan 48034, Attention of Secretary ((810) 948-3060), (b) in the
case of the Servicer, to Chrysler Credit Corporation, 27777 Franklin Road,
Southfield, Michigan 48034, Attention of Secretary ((810) 948-3060), (c) in the
case of the Issuer or the Owner Trustee, at the Corporate Trust Office (as
defined in the Trust Agreement), (d) in the case of the Indenture Trustee, at
the Corporate Trust Office, (e) in the case of Moody's, to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007,
67
<PAGE> 72
(f) in the case of Standard & Poor's, to Standard & Poor's Ratings Group, 26
Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department, (g) in the case of Fitch Investors Service, Inc., to
One State Street Plaza, New York, N.Y. 10004, and (h) in the case of Duff &
Phelps Credit Rating Company, to 55 E. Monroe Street (35th Floor), Chicago,
Illinois 60603; or, as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.
SECTION 10.04. Assignment by the Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in the remainder of this Section, as provided in Sections 6.04 and 7.03 herein
and as provided in the provisions of this Agreement concerning the resignation
of the Servicer, this Agreement may not be assigned by the Seller or the
Servicer. The Issuer and the Servicer hereby acknowledge and consent to the
conveyance and assignment by the Seller to the Company pursuant to the Purchase
Agreement of any and all of the Seller's rights and interests (and
corresponding obligations, if any) hereunder with respect to receiving amounts
from the Reserve Account and with respect to receiving and conveying any Fixed
Value Payments, and the Issuer and the Servicer hereby agree that the Company
shall be entitled to enforce such rights and interests directly against the
Issuer as if the Company were itself a party to this Agreement.
SECTION 10.05. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Company, the
Servicer, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
68
<PAGE> 73
SECTION 10.10. Assignment by Issuer. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of the Issuer
in, to and under the Receivables and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, acquiesce, petition or otherwise
invoke or cause the Issuer or the Company to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer or the Company under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or the Company
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer or the Company.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Seller or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by ______________________ not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall ______________________ in its individual capacity or,
except as expressly provided in the Trust Agreement, as beneficial owner of the
Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by _____________________, not in its
individual capacity but solely as Indenture Trustee and in no event shall
_____________________ have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
69
<PAGE> 74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
PREMIER AUTO TRUST 199_-_
By: ______________________, not in
its individual capacity but solely as
Owner Trustee on behalf of the Trust
By: __________________________
Name:
Title:
CHRYSLER FINANCIAL CORPORATION, Seller
By: ___________________________
Name:
Title:
CHRYSLER CREDIT CORPORATION, Servicer
By: ___________________________
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
_____________________,
not in its individual capacity
but solely as Indenture Trustee
By: ______________________
Name:
Title:
<PAGE> 75
SCHEDULE A
Schedule of Receivables
[To be Delivered to the Trust at Closing and supplemented
on each Subsequent Transfer Date for Subsequent Receivables]
<PAGE> 76
SCHEDULE B
Location of Receivable Files
Chrysler Credit Corporation
27777 Franklin Road
Southfield, MI 48034-8288
<PAGE> 77
SCHEDULE C
Schedule of Eligible Investment Receivables
[To be delivered on each Subsequent Transfer Date on which
Eligible Investment Receivables are transferred to the Trust]
<PAGE> 78
EXHIBIT A
Chrysler Credit Corporation
Premier Auto Trust 199_-_ Distribution Date Statement to Certificateholders
Principal Distribution Amount
Principal Per $1,000 Certificate
Interest Distribution Amount
Interest Per $1,000 Certificate
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Certificate Balance
Certificate Pool Factor
Servicing Fee
Servicing Fee Per $1,000 Certificate
Mandatory Prepayment Amount
A-1
<PAGE> 79
EXHIBIT B
Chrysler Credit Corporation
Premier Auto Trust 199_-_ Distribution Date Statement to Noteholders
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Certificate Balance
Servicing Fee
Servicing Fee Per $1,000 Note
Mandatory Redemption Amount
B-1
<PAGE> 80
EXHIBIT A-1
Chrysler Credit Corporation
Premier Auto Trust 199_-_ Reconciliation Determination Date
Statement to Certificateholders*/
Principal Distribution Amount
Principal per $1,000 Certificate
Interest Distribution Amount
Interest per $1,000 Certificate
Pool Balance
Certificateholders' Reconciliation Principal Adjustment Amount
Adjustment Amount per $1,000 Certificate
Realized Losses
Reserve Account Balance
Payahead Balance
Pre-Funded Amount
______________
*/ This Statement relates to reconciliation of amounts shown on the
Statement for the related Distribution Date.
A-1-1
<PAGE> 81
EXHIBIT B-1
Chrysler Credit Corporation
Premier Auto Trust 199_-_ Reconciliation Determination Date
Statement to Noteholders**/
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Pool Balance
Noteholders' Reconciliation Principal Adjustment Amount:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Realized Losses
Reserve Account Balance
Payahead Balance
Pre-Funded Amount
______________
**/ This Statement relates to reconciliation of amounts shown on the
Statement for the related Distribution Date.
B-1-1
<PAGE> 82
EXHIBIT C
Form of Servicer's Certificate
Chrysler Credit Corporation
Premier Auto Trust 199_-_ Monthly Servicer's Certificate
Period
Distribution Date
Dates Covered From & Incl. To & Incl.
- --------------------------------------------------------------------------
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
- --------------------------------------------------------------------------
Pool Balance
Simple Interest
Subsequent Receivables
Initial Pool Balance
Principal Distribution Amount
- --------------------------------------------------------------------------
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
- --------------------------------------------------------------------------
Collections - Precomputed Contracts
+ Collections - Simple Interest Contracts
+ Simple Interest Advances
+ Investment Earnings
Total Distribution Amount
- --------------------------------------------------------------------------
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Principal Adjustment Amount:
Total Distribution Amount:
Loss & Delinquency
C-1
<PAGE> 83
Trial Balances Beginning Ending
- -------------------------------------------------------------------
Pool Balance
Trial Principal Distribution Amount
Subsequent Receivables
Initial Pool Balance
Trial Principal Distribution Amount
- -------------------------------------------------------------------
Collection Account Deposits
+ Investment Earnings PFA Only
- Trial Interest Distribution Amount
Trial Interest Distribution Amount
- -------------------------------------------------------------------
Beginning Weighted Average APR
/ Months Per Year
* Beginning Pool Balance
+ Investment Earnings PFA Only
Trial Total Distribution Amount
- -------------------------------------------------------------------
Trial Principal Distribution Amount
+ Trial Interest Distribution Amount
C-2
<PAGE> 84
<TABLE>
<CAPTION>
Account Activity
---------------------------------------------------------------------
Beginning Ending Interest/ Interest
Balance Balance Change Factor Servicing Shortfall
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Initial Pool
Pre-Funding
Principal
Paydown
Payaheads
Advance
Reserve
Available Amount
Cert. Int.
Reserve
Cert. Int.
Res. Draw
Notes
Class A-
Class A-
Class A-
Certificates
Over Collat.
Note Adjust.
Amount
Cert. Adjust.
Amount
</TABLE>
<TABLE>
<CAPTION>
Principal Allocation
----------------------------------------------------------------------------------------
Mandatory
Regular Principal Excess Redemption/ Total Principal
Principal Adjustment Principal Repayment Principal Shortfall
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Notes
Class A-
Class A-
Class A-
Certificates
Total
</TABLE>
C-3
<PAGE> 85
Miscellaneous
Noteholders' Percentage
Certificateholders' Percentage
Target Over-Collateralization Amount
Maximum Excess Principal
Available Excess Principal
Reserve Deposit from PFA
Pre-Funding Account to Seller
Negative Carry Amount
Specified Reserve Account Balance
Certificate Interest Reserve Draw
Distribution Account to Seller
Servicing Fee to Servicer
Allocation of Funds
Sources
Principal Distribution Amount
Interest Distribution Amount
Available Amount
Certificate Interest Reserve
Note Reconciliation Prin.Adj.Amt.
Cert Reconciliation Prin.Adj.Amt.
Reserve Deposit from PFA
Redemption/Prepay Amt.
Total Sources
Uses Required Available Shortfall Actual
C-4
<PAGE> 86
EXHIBIT D
SUBSEQUENT TRANSFER ASSIGNMENT NO. ___
For value received, in accordance with and subject to the Sale and
Servicing Agreement (the "Sale and Servicing Agreement") dated as of
___________, 199_, among Chrysler Financial Corporation, a Michigan corporation
(the "Seller"), Premier Auto Trust 199_-_, a Delaware business trust (the
"Issuer"), and Chrysler Credit Corporation, a Delaware corporation (the
"Servicer"), the Seller does hereby sell, assign, transfer and otherwise convey
unto the Issuer, without recourse (except as expressly provided in the Sale and
Servicing Agreement), all right, title and interest of the Seller in and to (i)
the Subsequent Receivables, having an aggregate Principal Balance equal to
$___________, set forth on Schedule A hereto (which shall supplement Schedule A
to the Sale and Servicing Agreement) and all monies due thereon on or after
the date hereof (the "Subsequent Cutoff Date"), in the case of Precomputed
Receivables, and all monies received thereon on and after the Subsequent Cutoff
Date, in the case of Simple Interest Receivables; (ii) the security interests
in the Financed Vehicles granted by the Obligors pursuant to such Subsequent
Receivables and any other interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent Receivables from claims on
any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors; (iv) any proceeds with respect to such
Subsequent Receivables from recourse to Dealers thereon with respect to which
the Servicer has determined in accordance with its customary servicing
procedures that eventual payment in full is unlikely; (v) any Financed Vehicle
that shall have secured any such Subsequent Receivables and that shall have
been acquired by or on behalf of the Seller, the Servicer, the Company or the
Issuer; and (vi) the proceeds of any and all of the foregoing. The foregoing
sale does not constitute and is not intended to result in any assumption by the
Issuer of any obligation of the Seller to the Obligors, insurers or any other
person in connection with the Standard Receivables, Fixed Value Receivables,
Receivable Files, any insurance policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Sale and
Servicing Agreement (including the Officers' Certificate of the Seller
accompanying this Assignment, in the form of Annex A hereto) and is to be
governed in all respects by the Sale and Servicing Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of _____________, 199_.
CHRYSLER FINANCIAL CORPORATION
By:__________________________
Name:
Title:
D-1
<PAGE> 87
SCHEDULE A TO
SUBSEQUENT TRANSFER ASSIGNMENT NO. ___
Schedule of Subsequent Receivables
D-2
<PAGE> 88
ANNEX A TO
SUBSEQUENT TRANSFER ASSIGNMENT NO. ___
CHRYSLER FINANCIAL CORPORATION
OFFICERS' CERTIFICATE
The undersigned, _______________ and ________________, the duly
qualified and elected ______________ and ________________ of Chrysler Financial
Corporation (the "Seller"), in connection with the conveyance of Subsequent
Receivables to Premier Auto Trust 199__-__ (the "Trust") pursuant to Section
2.02(b)(1)(xii) of the Sale and Servicing Agreement dated as of ______________,
199__, among the Seller, the Trust and Chrysler Credit Corporation, as
servicer, (the "Sale and Servicing Agreement") and Subsequent Transfer
Assignment No. ___ dated as of the date hereof from the Seller, hereby certify
that:
(a) ______% of the Principal Balances of the Receivables in
the Trust on the date hereof (including the Subsequent Receivables
conveyed to the Trust on the date hereof) represent vehicles financed
at CCC's used vehicle rate.
(b) The weighted average APR of the Receivables in the Trust
on the date hereof (including the Subsequent Receivables conveyed to
the Trust on the date hereof) is _____%.
(c) The weighted average remaining term of the Subsequent
Receivables in the Trust on the date hereof (including the Subsequent
Receivables conveyed to the Trust on the date hereof) is ____________
months.
(d) All other conditions precedent set forth in Section
2.02(b)(1) of the Sale and Servicing Agreement relating to the
conveyance of Subsequent Receivables to the Trust have been satisfied.
All capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ____ day
of _____________, 199_.
______________________________
Name:
Title:
______________________________
Name:
Title:
D-3
<PAGE> 89
EXHIBIT E
FORM OF ACCOUNTANTS' LETTER
(Date)
Board of Directors
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
(Owner Trustee)
(Owner Trustee Address)
(Indenture Trustee)
(Indenture Trustee Address)
Ladies and Gentlemen:
This letter is delivered exclusively for your information with respect
to and in connection with the sale of certain motor vehicle retail installment
sale contracts by Chrysler Financial Corporation ("CFC") to Premier Auto Trust
199___-___ (the "Trust"), pursuant to Section 2.02(b) of the Sale and
Servicing Agreement dated as of __________________, 194___ (the "Sale and
Servicing Agreement") among the ___________________, as trustee, CFC and
Chrysler Credit Corporation ("CCC"), as servicer. Capitalized terms used
herein and not otherwise defined have the meaning ascribed thereto in the
Sale and Servicing Agreement or the Prospectus Supplement dated
____________________ to the Prospectus dated _______________________
(collectively, the "Prospectus") relating to the offering of the Premier Auto
Trust 199___-___ [describe securities]. In connection therewith, we are
independent certified public accountants with respect to CFC and consolidated
subsidiaries, within the meaning of the Securities Act of 1933, as amended, and
all applicable published rules and regulations thereunder and we have performed
certain agreed-upon procedures, as specified in Items 1. through 3. below:
1. We have compared the following amounts and/or
percentages contained in the Prospectus Supplement to analyses prepared by CFC,
and found them to be in agreement.
<TABLE>
<CAPTION>
Page Description
---- -----------
<S> <C>
</TABLE>
E-1
<PAGE> 90
2. We have compared the following amounts and/or
percentages contained in the Prospectus Supplement to analyses prepared by
Chrysler Corporation ("Chrysler"), and found them to be in agreement.
<TABLE>
<CAPTION>
Page Description
---- -----------
<S> <C>
</TABLE>
3. The foregoing procedures do not constitute an audit
conducted in accordance with generally accepted auditing standards. Therefore,
we are unable to and do not express any opinion on any of the procedures
performed on individual balances or accounts or summaries of selected
transactions specifically set forth in this letter. Also, these procedures
would not necessarily reveal matters of significance with respect to the
findings described herein. Accordingly, we make no representations regarding
the sufficiency of the foregoing procedures for your purposes.
4. It should be understood that we make no representations
regarding questions of legal interpretation or regarding the sufficiency for
your purposes of the procedures enumerated in the preceding paragraphs; also,
such procedures would not necessarily reveal any material misstatement of the
amounts or percentages listed above. Further, we have addressed ourselves
solely to the foregoing data as set forth in the Note Underwriting Agreement
and the Certificate Underwriting Agreement, both dated ______________________
(collectively, the "Agreements"), pursuant to which the underwriters initially
purchased the Notes and Certificates, the Pooling and Servicing Agreement and
the Prospectus, and make no representations regarding the adequacy of
disclosure or whether any material facts have been omitted.
5. These procedures should not be taken to supplant any
additional inquiries or procedures that you would undertake in your
consideration of the proposed transaction.
6. In reaching the findings above, we have assumed that no
information has come to your attention which, if disclosed to us, could have
materially affected our findings.
7. This letter is solely for the information of the
addressees and to assist the underwriters in conducting and documenting their
investigation of the affairs of CFC in connection with the offering of the
securities covered by the Prospectus, and is not to be used, circulated, quoted
or otherwise referred to for any other purpose including but not limited to the
purchase or sale of the securities, nor is it to be referred to in whole or in
part
E-2
<PAGE> 91
in the Registration Statement or any other document, except that reference may
be made to it in the Agreements or in any list of closing documents pertaining
to the offering of the securities covered by the Prospectus.
8. We have no responsibility to update this letter for
events and circumstances occurring after each applicable Cutoff Date.
Yours truly,
E-3
<PAGE> 92
EXHIBIT F
ELIGIBLE INVESTMENT TRANSFER ASSIGNMENT NO. ____
For value received, in accordance with and subject to the Sale and
Servicing Agreement dated as of ______________________, 199__ (the Sale and
Servicing Agreement"), among Chrysler Financial Corporation, a Michigan
corporation (the "Seller"), Premier Auto Trust 199__-__, a Delaware business
trust (the "Issuer"), and Chrysler Credit Corporation, a Delaware corporation
(the "Servicer"), the Seller does hereby sell, assign, transfer and otherwise
convey unto the Issuer, without recourse (except as expressly provided in the
Sale and Servicing Agreement), all right, title and interest of the Seller in
and to (i) the Eligible Investment Receivables, having an aggregate Principal
Balance equal to $ _____, set forth on Schedule A hereto (which shall supplement
Schedule C to the Sale and Servicing Agreement) and all monies due thereon on
or after the date hereof (the "Subsequent Cutoff Date"), in the case of
Precomputed Receivables, and all monies received thereon on and after the
Subsequent Cutoff Date, in the case of Simple Interest Receivables; (ii) the
security interests in the Financed Vehicles granted by the Obligors pursuant to
such Eligible Investment Receivables and any other interest of the Seller in
such Financed Vehicles, (iii) any proceeds with respect to such Eligible
Investment Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors; (iv) any
proceeds with respect to such Eligible Investment Receivables from recourse to
Dealers thereon with respect to which the Servicer has determined in accordance
with its customary servicing procedures that eventual payment in full is
unlikely, (v) any Financed Vehicle that shall have secured any such Eligible
Investment Receivable and that shall have been acquired by or on behalf of the
Seller, the Servicer, the Company or the Issuer, and (vi) the proceeds of any
and all of the foregoing. The foregoing sale does not constitute and is not
intended to result in any assumption by the Issuer of any obligation of the
Seller to the Obligors, insurers or any other person in connection with the
Eligible Investment Standard Receivables, Eligible Investment Fixed Value
Receivables, Receivable Files, any insurance policies or any agreement or
instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Sale and
Servicing Agreement (including the Officers' Certificate of the Seller
accompanying this Assignment, in the form of Annex A hereto) and is to be
governed in all respects by the Sale and Servicing Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of __________________, 199_.
CHRYSLER FINANCIAL CORPORATION
By: _________________________________
Name:
Title:
F-1
<PAGE> 93
SCHEDULE A TO
Eligible Investment Transfer Assignment No.____
Schedule of Eligible Investment Receivables
F-2
<PAGE> 94
ANNEX A TO
Eligible Investment Transfer Assignment No. ____
CHRYSLER FINANCIAL CORPORATION
OFFICER'S CERTIFICATE
The undersigned _________________________ and
__________________________, the duly qualified and elected
______________________________ and ___________________________ of Chrysler
Financial Corporation (the "Seller'), in connection with the conveyance of
Eligible Receivables to Premier Auto Trust 199__-__ (the "Trust") pursuant to
Section 2.05 of the Sale and Servicing Agreement dated as of
__________________, 199___, among the Seller, the Trust and Chrysler Credit
Corporation, as servicer, (the "Sale and Servicing Agreement") and Eligible
Investment Transfer Assignment No. ___ dated as of the date hereof from the
Seller, hereby certify that:
(a) ____% of the Principal Balances of the Eligible
Investment Receivables in the Reserve Account on the date hereof
(including the Eligible Investment Receivables conveyed to the Reserve
Account on the date hereof) represent vehicles financed at CCC's used
vehicle rate.
(b) All other conditions precedent set forth in Section
2.05(b)(1) of the Sale and Servicing Agreement relating to the
conveyance of Eligible Investment Receivables to the Reserve Account
have been satisfied.
All capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ____ day of
_______________, 199_.
________________________________
Name:
Title:
________________________________
Name:
Title:
F-3
<PAGE> 1
Exhibit 99.3 Form of Purchase Agreement
This PURCHASE AGREEMENT dated as of ___________________, 199___,
between CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the "Seller"),
and __________________________ a ___________________ (the "Company"),
W I T N E S S E T H:
WHEREAS the Seller and the Company have entered into an Amended and
Restated Trust Agreement dated as of _________________________, among the
Seller, the Company and _______________________________, as owner trustee (as
amended and supplemented from time to time, the "Trust Agreement"), pursuant to
which the Company has agreed to assume certain obligations with respect to
Premier Auto Trust 199___-___, a Delaware business trust (the "Issuer"),
including general responsibility for all losses, liabilities and expenses of
the Trust (other than losses to any investor in the Trust) in accordance with
Section _______ of the Trust Agreement; and
WHEREAS the Company has agreed to acquire from the applicable
Underwriters (as defined in the Trust Agreement) $_______________ aggregate
principal amount of the 6.85% Asset Backed Certificates (the "Certificates"),
which represent fractional undivided interests in the assets of the Issuer;
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows.
ARTICLE I
Definitions
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Sale and Servicing Agreement dated as of
___________________ (the "Sale and Servicing Agreement"), among the Issuer, the
Seller and Chrysler Credit Corporation, as servicer, which also contains rules
as to usage and construction that shall be applicable herein.
ARTICLE II
Conveyance of Rights to Excess Cash Flow from Reserve Account and Fixed Value
Payments with respect to Receivables
SECTION 2.01. Conveyances with respect to Transfers of Receivables.
In consideration of the Company's delivery to or upon the order of the Seller
of approximately $_______________________ on the Closing Date (such
consideration subject to adjustment under Section 2.02) the Seller does hereby
sell, transfer, assign, set over and otherwise convey to the Company, without
recourse (subject to the obligations herein), all of the Seller's right, title
and interest in and to the following: (a) any amounts to be released from the
Reserve Account
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from time to time to the Seller pursuant to the Sale and Servicing Agreement,
(b) any Fixed Value Payments arising in connection with the transfer of Fixed
Value Receivables and Eligible Investment Fixed Value Receivables and
transferred by the Trust to the Seller pursuant to Sections 2.03 and 2.05(c) of
the Sale and Servicing agreement, (c) all rights to sell any or all of such
Fixed Value Payments to the Trust and to cause the Trust to issue Fixed Value
Securities pursuant to Section 2.04 of the Sale and Servicing Agreement and (d)
all rights with respect to the enforcement of any or all of the foregoing, all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under, and any
and all proceeds of every kind and nature with respect to, any or all of the
foregoing (collectively, the "Rights").
SECTION 2.02. Final Purchase Price. As consideration for the
purchase of the Rights described in Section 2.01 hereof, the Seller and the
Company shall, within a reasonable time after the final delivery of Receivables
to the Trust, establish a final Purchase Price for such Rights (giving effect
to the delivery of all Receivables) in accordance with valuation methods that
satisfy the requirements of Emerging Issues Task Force Issue No. 88-11 and
other applicable U.S. generally accepted accounting principles, as amended from
time to time, and the Company shall pay such Purchase Price to the Seller. The
Company and the Seller shall establish a Purchase Price (calculated in the same
manner) for the Fixed Value Payments in respect of Eligible Investment
Receivables transferred from time to time after the final delivery of the
Receivables, and the Company shall pay such Purchase Price to the Seller.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Seller as of the date hereof and
as of the Closing Date:
(a) Organization and Good Standing. The Company has been duly
organized and is validly existing as a ____________________ in good standing
under the laws of the State of _________________________________, with the
corporate power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the corporate power,
authority and legal right to acquire, own, hold and convey the Rights.
(b) Due Qualification. The Company is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of its property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Company has the power and authority
to execute and deliver this Agreement and to carry out its terms, and the
execution, delivery and performance of this Agreement have been duly authorized
by the Company by all necessary action.
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(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
(articles of incorporation)(partnership agreement)(articles of association) or
bylaws of the Company, or any indenture, agreement or other instrument to which
the Company is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than the Basic Documents);
nor violate any law or, to the best of the Company's knowledge, any order, rule
or regulation applicable to the Company of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Company or its properties.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the Company's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Company or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 3.02. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Company as of the date hereof and
as of the Closing Date and any Transfer Date:
(a) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Michigan, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the corporate power, authority and legal right to convey and assign
the Rights.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; the
Seller has duly authorized the sale and assignment of the Rights to the Company
by all necessary corporate action; and the execution, delivery and performance
of this Agreement have been duly authorized by the Seller by all necessary
corporate action.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof shall
not conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Seller, or any indenture, agreement
or other instrument to which the Seller is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of
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any such indenture, agreement or other instrument (other than the Basic
Documents); nor violate any law or, to the best of the Seller's knowledge, any
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(e) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement.
ARTICLE IV
Conditions
SECTION 4.01. Conditions to Obligation of the Company. The
obligation of the Company to purchase the Rights is subject to the satisfaction
of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date with the same effect as
if then made, and the Seller shall have performed all obligations to be
performed by it hereunder on or prior to the Closing Date.
(b) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement to be consummated as of the Closing Date shall be
consummated as of such date.
SECTION 4.02. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Rights to the Company is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Company hereunder shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date with the same effect as
if then made, and the Company shall have performed all obligations to be
performed by it hereunder on or prior to the Closing Date.
(b) Purchase Price. On the Closing Date, the Company shall have
delivered to the Seller the purchase price specified in Section 2.01.
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ARTICLE V
Covenants
SECTION 5.01. Corporate Existence. (a) During the term of this
Agreement and the Trust Agreement, the Company will keep in full force and
effect its existence, rights and franchises as a ________________________ under
the laws of the jurisdiction of its organization and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement, the Basic Documents and the transactions contemplated hereby and
thereby.
(b) During the term of this Agreement and the Trust Agreement, the
Company shall observe the applicable legal requirements for the recognition of
the Company as a legal entity separate and apart from its Affiliates, including
as follows:
(i) the Company shall maintain records and books of
account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the
Company shall not commingle its assets and funds with those of its
Affiliates;
(iii) the Company shall hold such appropriate meetings of
its (Board of Directors) (other governing body) as are necessary to
authorize all of the Company's actions required by law to be
authorized by the (Board of Directors) (other governing body), shall
keep minutes of such meetings and of meetings of its (stockholder(s))
(limited partners) and observe all other customary corporate
formalities (and any successor Company that is not a corporation shall
observe similar procedures in accordance with its governing documents
and applicable law);
(iv) the Company shall at all times hold itself out to the
public under the Company's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between the Company and
its Affiliates, including this Agreement, will be conducted on an
arm's-length basis.
SECTION 5.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Company. Any Person (a) into which the Company may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Company shall be a party or (c) which may succeed to the
properties and assets of the Company substantially as a whole, which person in
any of the foregoing cases executes an agreement of assumption to perform every
obligation of the Company under this Agreement and the Trust Agreement, shall
be the successor to the Company hereunder and thereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement or the Trust Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 3.01 shall have been breached, (ii) the Company shall have delivered
to the Owner Trustee and the Indenture Trustee an
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Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with and (iii)
the Rating Agency Condition shall have been satisfied with respect to such
transaction. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii) and
(iii) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 5.03. Limitation on Liability of the Company and Others.
The Company and any (director,) (general partner,) officer, employee or agent
of the Company may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Company shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement or under the Trust
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 5.04. The Company May Own Certificates or Notes. The
Company may in its individual or any other capacity become the owner or pledgee
of Certificates or Notes with the same rights as it would have if it were not
the Company, except as expressly provided herein or in any Basic Document. In
addition, the Company shall in any event acquire and hold the aggregate
principal amount of the Certificates set forth in the recitals hereof and in
accordance with Section 3.10 of the Trust Agreement.
SECTION 5.05. Covenants of the Seller. (a) The Seller hereby
agrees to provide to the Company copies of each notice and certificate the
Seller receives pursuant to the Sale and Servicing Agreement insofar as such
notice or certificate relates to the Rights (including each Servicer's
Certificate delivered for each Distribution Date pursuant thereto). In
addition, the Seller hereby agrees to sell any vehicle that is received by the
Company at any time in satisfaction of a Fixed Value Payment or Eligible
Investment Fixed Value Payment on behalf and for the benefit of the Company.
(b) The Seller hereby agrees that it will not, without the prior
written consent of the Company, enter into any amendment to the Sale and
Servicing Agreement or the Trust Agreement.
(c) The Seller shall not, prior to the date which is one year and
one day after the termination of the Sale and Servicing Agreement, acquiesce,
petition or otherwise invoke or cause the Company to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Company under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Company or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of
the Company.
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ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment. This Agreement may be amended from time
to time by a written amendment duly executed and delivered by the Seller and
the Company, with the consent of the Indenture Trustee, but without the consent
of the Noteholders or the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Seller or the
Company; provided, however, that such amendment will not, as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee, materially and adversely
affect the interest of any Noteholder or Certificateholder. This Agreement may
also be amended by the Seller and the Company with the consent of the Indenture
Trustee, the consent of the Holders of Notes evidencing at least a majority of
the Outstanding Amount of the Notes and the consent of the Holders (as defined
in the Trust Agreement) of Certificates evidencing not less than a majority of
the Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Seller or the Company;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables distributions that are required to be made for the
benefit of Noteholders or Certificateholders or (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Notes and Certificate Balance, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and the Holders (as defined
in the Trust Agreement) of all the outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Seller shall furnish written notification of the substance of such amendment or
consent to each of the Rating Agencies.
SECTION 6.02. Waivers. No failure or delay on the part of the
Company in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other or further exercise thereof or
the exercise of any other power, right or remedy.
SECTION 6.03. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been duly
given upon receipt (a) in the case of the Seller, to Chrysler Financial
Corporation, 27777 Franklin Road, Southfield, Michigan 48034, Attention of
Secretary ((810) 958-3060) and (b) in the case of the Company, to
__________________________________________; or as to each of the foregoing, at
such other address as shall be designated by written notice to the other party.
SECTION 6.04. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Company, the
Servicer, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any
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legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 6.05. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 6.06. Representations of the Seller and the Company. The
respective agreements, representations, warranties and other statements by the
Seller and the Company set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the execution of this
Agreement.
SECTION 6.07. Headings. The various headings in this Agreement are
included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
SECTION 6.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.09. Counterparts. This Agreement may be executed in two
or more counterparts and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
* * * * * * * * * * * * * * * * * * * * * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers duly authorized as of the date and
year first above written.
CHRYSLER FINANCIAL CORPORATION
By: ______________________________
Name:
Title:
(________________________________)
By: ______________________________
Name:
Title:
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