AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1997
REGISTRATION NO. 333-31093
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________________
CHRYSLER FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
MICHIGAN 38-0961430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(248) 948-3060
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
CHRISTOPHER A. TARAVELLA, ESQ.
CHRYSLER FINANCIAL CORPORATION
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(248) 948-3060
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
____________________________________
COPY TO:
RENWICK D. MARTIN, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 839-5319
____________________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective as
determined by market conditions.
____________________________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offer. / / _______________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
____________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING AMOUNT OF
SECURITIES TO BE REGISTERE REGISTERED UNIT/(2)/ PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Asset Backed Securities . . . . . $8,000,000,000/(1)/ 100% $8,000,000,000/(2)/ $2,424,243/(3)/
</TABLE>
(1) $580,050,210.82 aggregate principal amount of Asset Backed Securities
registered by the Registrant under Registration Statement No. 33-55789
referred to below and not previously sold is carried forward in this
Registration Statement pursuant to Rule 429. A registration fee of
$200,016.97 in connection with such unsold amount of Asset Backed Securities
was paid previously under the foregoing Registration Statement.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Previously paid.
____________________________________
PURSUANT TO RULE 429, THE PROSPECTUS AND FORMS OF PROSPECTUS SUPPLEMENT
CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATE TO, AND THIS
REGISTRATION STATEMENT CONSTITUTES A POST-EFFECTIVE AMENDMENT TO,
REGISTRATION STATEMENT NO. 33-55789, WHICH BECAME EFFECTIVE ON OCTOBER 21,
1994, AND ANY UNSOLD SECURITIES REGISTERED THEREUNDER.
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.
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. The
features applicable to any actual series of Asset Backed Securities may
include any features specified in the Prospectus.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT TO THE ACCOMPANYING PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 1, 1997
PROSPECTUS SUPPLEMENT
(To Prospectus dated , 199_)
$
PREMIER AUTO TRUST 199 -
$ % ASSET BACKED CERTIFICATES, CLASS A
($ % ASSET BACKED CERTIFICATES, CLASS B)
CHRYSLER FINANCIAL CORPORATION
SELLER AND 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" and 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 liability company (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 THE
PRICE TO PUBLIC(1) DISCOUNT 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 .
(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.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
CERTIFICATES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING AND THE PURCHASE OF
CERTIFICATES TO COVER SYNDICATE SHORT POSITIONS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING" HEREIN.
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.
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.
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 and Servicer Chrysler Financial Corporation (the "Seller",
the "Servicer" or "CFC").
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 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
CFC at a later date using credit criteria
different from those which were applied to the
Initial Receivables and may be of a different
credit quality and seasoning. In addition,
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").
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 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 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 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 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 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 Repurchase").
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 "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 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 LLP ("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.
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 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 CFC 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 CFC.
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.
Each Subsequent Receivable must satisfy the eligibility criteria
specified in the Agreement at the time of its addition. However, Subsequent
Receivables may have been originated by CFC at a later date using credit
criteria different from those which were applied to the Initial Receivables
and may be of a different credit quality and seasoning. In addition, an
increasing percentage of the Subsequent Receivables may be Fixed Value
Receivables or Receivables generated under the Market Value Pricing program.
Therefore, following the transfer of Subsequent Receivables to the Trust, the
characteristics of the entire Receivables Pool included in the Trust may vary
significantly from those of the Initial Receivables. See "The Receivables
Pool" herein and "The Receivables Pools" in the Prospectus.
Social, Economic and Other Factors. The ability of CFC 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; Financial Condition of the Seller
and Chrysler Corporation. CFC is not generally obligated to make any payments
in respect of the Securities or the Receivables. However, if CFC were to
cease acting as Servicer, delays in processing payments on the Receivables and
information in respect thereof could occur and result in delays in payments
to the Securityholders.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
reported earnings before income taxes, extraordinary item, and the cumulative
effect of a change in accounting principle of $___ billion in 199__, compared
with $___ billion in 199__. Net earnings for 199__ were $___ billion, or
$____ per common share, compared with $___ billion, or $____ per common share
in 199__.
Chrysler also reported earnings before income taxes and extraordinary
item of $_____ million in the fourth quarter of 199__, compared with $_____
million in the fourth quarter of 199__. Net earnings for the fourth quarter
of 199__ were $___ million, or $____ per common share, compared with $_____
million, or $____ per common share in the fourth quarter of 199__.
CFC achieved net earnings of $___ million in 199__ compared to $___
million and $___ million in 199__ and 199__, respectively. The increase in
net earnings for 199__ compared to 199__ primarily reflects net margin
improvements partially offset by an increase in the provision for credit
losses. The increase in net earnings for 199__ compared to 199__ primarily
reflects higher levels of automotive financing, lower operating expenses and
lower costs of bank facilities.
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 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 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 ($300) and (ii) as of the applicable Cutoff Date, was not or will not
be more than 30 days past due. As of the applicable Cutoff Date, no Obligor
on any Receivable was or will have been noted in the related records of the
Servicer as being the subject of a bankruptcy proceeding, and no Obligor on
any Receivable will have financed a Financed Vehicle under CFC's "New-Finance
Buyer Plan" program. No selection procedures believed by the Seller to be
adverse to Certificateholders were or will be used in selecting the
Receivables.
The obligation of the Trust to purchase the Subsequent Receivables on a
Subsequent Transfer Date will be subject to the Receivables in the Trust,
including the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria: (i) not more than
% of the principal balances of the Receivables in the Trust will represent
vehicles financed at CFC's used vehicle rates, and (ii) the weighted average
APR of the Receivables in the Trust will not be less than %, unless the
Seller increases the Reserve Account Initial Deposit by certain specified
amounts. In addition, such obligation will be subject to the Receivables,
including the Subsequent Receivables to be transferred to the Trust on such
Subsequent Transfer Date, having a weighted average remaining term not
greater than months. Such criteria will be based on the
characteristics of the Initial Receivables on the Initial Cutoff Date and any
Subsequent Receivables on the related Subsequent Cutoff Dates. In addition,
no Receivable will be sold to the Trust if such Receivable has been
repurchased by the Seller through the exercise of optional repurchase
provisions contained in other securitization transactions.
The Initial Receivables will represent approximately % of the
aggregate initial principal balance of the Certificates. However, except for
the criteria described in the preceding paragraphs, there will be no required
characteristics of the Subsequent Receivables. Therefore, following the
transfer of Subsequent Receivables to the Trust, the aggregate
characteristics of the entire Receivables Pool, including the composition of
the Receivables, the distribution by annual percentage rate ("APR") and the
geographic distribution described in the following tables, may vary
significantly from those of the Initial Receivables.
The composition, distribution by APR and geographic distribution of the
Initial Receivables as of the Initial Cutoff Date are as set forth in the
following tables.
COMPOSITION OF THE INITIAL RECEIVABLES AS OF THE
INITIAL CUTOFF DATE
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE AVERAGE
APR OF AGGREGATE NUMBER OF REMAINING ORIGINAL PRINCIPAL
RECEIVABLES PRINCIPAL BALANCE RECEIVABLES TERM TERM BALANCE
<S> <C> <C> <C> <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%.......................
</TABLE>
GEOGRAPHIC DISTRIBUTION OF THE INITIAL RECEIVABLES
AS OF THEIR RESPECTIVE INITIAL CUTOFF DATES
<TABLE>
<CAPTION>
Percentage of Aggregate Percentage of Aggregate
State(1) Principal Balance(2) State(1) Principal Balance(2)
<S> <C> <C> <C>
Alabama . . . . . . . . . Montana . . . . . . . . .
Alaska . . . . . . . . . Nebraska . . . . . . . .
Arizona . . . . . . . . . Nevada . . . . . . . . .
Arkansas . . . . . . . . New Hampshire . . . . . .
California . . . . . . . New Jersey . . . . . . .
Colorado . . . . . . . . New Mexico . . . . . . .
Connecticut . . . . . . . New York . . . . . . . .
Delaware . . . . . . . . North Carolina . . . . .
District of Columbia . . North Dakota . . . . . .
Florida . . . . . . . . . Ohio . . . . . . . . . .
Georgia . . . . . . . . . Oklahoma . . . . . . . .
Hawaii . . . . . . . . . Oregon . . . . . . . . .
Idaho . . . . . . . . . . Pennsylvania . . . . . .
Illinois . . . . . . . . Rhode Island . . . . . .
Indiana . . . . . . . . . South Carolina . . . . .
Iowa . . . . . . . . . . South Dakota . . . . . .
Kansas . . . . . . . . . Tennessee . . . . . . . .
Kentucky . . . . . . . . Texas . . . . . . . . . .
Louisiana . . . . . . . . Vermont . . . . . . . . .
Maine . . . . . . . . . . Virginia . . . . . . . .
Maryland . . . . . . . . Washington . . . . . . .
Massachusetts . . . . . . West Virginia . . . . . .
Michigan . . . . . . . . Wisconsin . . . . . . . .
Minnesota . . . . . . . . Wyoming . . . . . . . . .
Mississippi . . . . . . . Utah . . . . . . . . . .
Missouri . . . . . . . .
</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 CFC's new vehicle
rates, which apply to new and certain previously owned vehicles; the
remainder represent vehicles financed at CFC's used vehicle rates.
Approximately % of the aggregate principal balance of the Initial
Receivables represent financing of vehicles manufactured or distributed by
Chrysler.
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 CFC 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 CFC. 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 DECEMBER 31,
1996 1995 1994
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . . . . 1,679,880 $21,197 1,653,533 $20,913 1,444,736 $16,977
Period of Delinquency
31-60 Days . . . . . . . . 65,297 $843 55,507 $720 25,888 $293
61 Days or More . . . . . . 8,175 118 6,792 100 2,085 27
Total Delinquencies . . . . . 73,472 $961 62,299 $820 27,973 $320
Total Delinquencies
as a Percent of
the Portfolio . . . . . . . 4.37% 4.53% 3.77% 3.92% 1.94% 1.88%
</TABLE>
<TABLE>
<CAPTION> AT DECEMBER 31,
1993 1992 1991
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . . . . 1,352,218 $14,116 1,344,799 $12,082 1,437,451 $11,994
Period of Delinquency
31-60 Days . . . . . . . . 16,350 $153 15,964 $134 21,025 $180
61 Days or More . . . . . . 1,383 15 1,376 13 2,048 20
Total Delinquencies . . . . . 17,733 $168 17,340 $147 23,073 $200
Total Delinquencies as a
Percent of the Portfolio . 1.31% 1.19% 1.29% 1.22% 1.61% 1.67%
</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 CFC continues
to service.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding
During the Period . . . . $21,062 $19,486 $15,517 $12,882 $11,818 $12,709
Average Number of Contracts
Outstanding During the
Period . . . . . . . . . 1,671,405 1,572,963 1,396,497 1,341,084 1,382,898 1,517,178
Percent of Contracts
Acquired During the
Period with Recourse
to the Dealer . . . . . . 9.05% 14.8% 17.0% 16.2% 15.8% 21.7%
Repossessions as a Percent
of Average Number of
Contracts Outstanding . . . 3.82% 3.05% 2.36% 2.15% 2.31% 2.63%
Net Losses as a Percent of
Liquidations(2)(3) . . . 3.17% 2.25% 1.38% 1.34% 1.71% 2.28%
Net Losses as a Percent of
Average Amount
Outstanding(2) . . . . . 1.68% 1.16% 0.73% 0.75% 0.97% 1.21%
</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 CFC continues to service.
(2) Net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any
recoveries on contracts charged off in the period or any prior periods,
including any losses resulting from disposition expenses and any losses
resulting from the failure to recover commissions to dealers with
respect to contracts that are prepaid or charged off.
(3) 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.
CHRYSLER FINANCIAL CORPORATION
Information regarding Chrysler Financial Corporation is set forth under
"Chrysler Financial Corporation" in the Prospectus. In addition, as of
____________, 199__, the Seller had approximately _____ employees and was
managing $____ billion in finance receivables and provided financial services
to automobile dealers and their customers through ___ zone offices in the
United States. During 199__, the Seller financed or leased approximately
_______ new and used vehicles at retail, including approximately _______ new
Chrysler passenger cars and light duty trucks, representing ___% of
Chrysler's U.S. retail and fleet deliveries. The Seller also financed at
wholesale approximately _________ new Chrysler passenger cars and light duty
trucks, representing ___% of Chrysler's U.S. factory unit sales for the year
ended ____________, 199__.
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.
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.
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 CFC at a later date
using credit criteria different from those which were applied to the Initial
Receivables. See "Special Considerations -- The Receivables and the
Pre-Funding Account" and "The Receivables Pool" herein.
ACCOUNTS
In addition to the Accounts referred to under "Description of the
Transfer and Servicing Agreements -- Accounts" in the Prospectus, the
Servicer will also establish and will maintain with the Trustee, the Payahead
Account, the Pre-Funding Account and the Reserve Account, in the name of the
Trustee on behalf of the Certificateholders. The Reserve Account will not be
part of the Trust.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the
Servicer will be 1.00% per annum of the Pool Balance as of the first day of
the Collection Period (after giving effect to distributions to be made on the
following 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.
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 (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.
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.
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:
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
UNDERWRITERS CLASS A CERTIFICATES CLASS B CERTIFICATES
$ $
Total . . . . . . . . $ $
The Seller has been advised by the Underwriters that they propose
initially to offer the (Class A) Certificates to the public at the prices set
forth herein, and to certain dealers at such price less the initial
concession not in excess of % per (Class A) Certificate. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of %
per (Class A) Certificate to certain other dealers. After the initial public
offering of the (Class A) Certificates, the public offering prices and such
concessions may be changed.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain
legal matters relating to the Certificates will be passed upon for the
Underwriters and certain federal income tax and other matters will be passed
upon for the Trust by ( ). ( may from time to
time render legal services to CFC and its affiliates).
INDEX OF TERMS
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
APR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Certificate Prepayment Amount . . . . . . . . . . . . . . . . . . . . . . S-
Certificate Prepayment Premium . . . . . . . . . . . . . . . . . . . . . S-
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
CFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Distributable Amount . . . . . . . . . . . . . . . . . . . . . . S-
Class A Interest Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class A Interest Distributable Amount . . . . . . . . . . . . . . . . . . S-
Class A Pass Through-Rate . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Principal Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class A Principal Distributable Amount . . . . . . . . . . . . . . . . . S-
Class B Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Distributable Amount . . . . . . . . . . . . . . . . . . . . . . S-
Class B Interest Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class B Interest Distributable Amount . . . . . . . . . . . . . . . . . . S-
Class B Pass Through Rate . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Principal Carryover Shortfall . . . . . . . . . . . . . . . . . . S-
Class B Principal Distributable Amount . . . . . . . . . . . . . . . . . S-
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Federal Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Distribution Date . . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . . . S-
Financed Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Funding Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Initial Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Initial Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Initial Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Interest Distribution Amount . . . . . . . . . . . . . . . . . . . . . . S-
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidated Receivables . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Mandatory Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . S-
MMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pre Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Principal Distribution Amount . . . . . . . . . . . . . . . . . . . . . . S-
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Realized Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Reserve Account Initial Deposit . . . . . . . . . . . . . . . . . . . . . S-
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
SFAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Specified Reserve Account Balance . . . . . . . . . . . . . . . . . . . . S-
Subsequent Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . S-
Subsequent Receivables . . . . . . . . . . . . . . . . . . . . . . . . . S-
Subsequent Transfer Date . . . . . . . . . . . . . . . . . . . . . . . . S-
Total Distribution Amount . . . . . . . . . . . . . . . . . . . . . . . . S-
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . S-
<TABLE>
<CAPTION>
<S> <C> <C>
=================================== ====================================
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 PAGE
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 PREMIER AUTO TRUST 199 -
THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AT ANY TIME DOES NOT IMPLY $
THAT INFORMATION HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT % ASSET BACKED CERTIFICATES, CLASS A
TO ITS DATE.
$
_____________________ (% ASSET BACKED CERTIFICATES, CLASS B)
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
CHRYSLER FINANCIAL CORPORATION
PAGE SELLER AND SERVICER
Reports to Certificateholders . . S-
Summary of Terms . . . . . . . . S-
Special Considerations . . . . . S-
The Trust . . . . . . . . . . . . S-
The Receivables Pool . . . . . . S-
Chrysler Financial Corporation. . S-
Weighted Average Life of the
Certificates . . . . . . . . . S-
Description of the Certificates . S-
ERISA Considerations . . . . . . S-
Underwriting . . . . . . . . . . S- ---------------------------
Legal Opinions . . . . . . . . . S-
Index of Terms . . . . . . . . . S- PROSPECTUS SUPPLEMENT
PROSPECTUS ---------------------------
Available Information . . . . . .
Incorporation of Certain
Documents by Reference . . . .
Summary of Terms . . . . . . . .
Special Considerations . . . . .
The Trusts . . . . . . . . . . .
The Receivables Pools . . . . . .
Weighted Average Life of the
Securities . . . . . . . . . .
Pool Factors and Trading
Information . . . . . . . . . .
Use of Proceeds . . . . . . . . .
Chrysler Financial Corporation .
Description of the Notes . . . .
Description of the Certificates .
Certain Information Regarding
the Securities . . . . . . . .
Description of the Transfer
and Servicing Agreements . . .
Certain Legal Aspects of the
Receivables . . . . . . . . . .
Certain Federal Income Tax
Consequences . . . . . . . . .
Certain State Tax Consequences
with respect to Trusts
for which a Partnership
Election Is Made . . . . . . .
ERISA Considerations . . . . . .
Plan of Distribution . . . . . .
Legal Opinions . . . . . . . . .
Index of Terms . . . . . . . . .
_____________________
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 , 199
ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS
OR SUBSCRIPTIONS.
==================================== ==================================
</TABLE>
Subject to Completion, dated August 1, 1997
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 the
registration or qualification under the securities laws of any such State.
PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED __________ __, 199__)
$_____________
PREMIER AUTO TRUST 199__-__
____% ASSET BACKED NOTES, CLASS A-2
____% ASSET BACKED NOTES, CLASS A-3
____% ASSET BACKED NOTES, CLASS A-4
____% ASSET BACKED NOTES, CLASS B
CHRYSLER FINANCIAL CORPORATION, SELLER AND SERVICER
------------------------
Premier Auto Trust 199__-__ (the "Trust") will be governed pursuant to
an Amended and Restated Trust Agreement to be dated as of __________ __,
199__, among Chrysler Financial Corporation (the "Seller"), Premier
Receivables L.L.C., an indirectly wholly-owned subsidiary of the Seller (the
"Company"), and Chase Manhattan Bank Delaware, 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"), $___________
aggregate principal amount of Class A-3 ____% Asset Backed Notes (the "Class
A-3 Notes"), $___________ aggregate principal amount of Class A-4 ____% Asset
Backed
(Cover continued on following page)
------------------------
THE NOTES REPRESENT OBLIGATIONS OF THE TRUST ONLY AND DO NOT REPRESENT
OBLIGATIONS OF OR INTERESTS IN CHRYSLER FINANCIAL CORPORATION,
THE COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NONE
OF THE NOTES 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.
<TABLE>
<CAPTION>
Original Price to Underwriting Proceeds to
Principal Amount Public(1) Discount the Seller(1)(2)
<S> <C> <C> <C> <C>
Per Class A-2 Note . . . $ % % %
Per Class A-3 Note . . . $ % % %
Per Class A-4 Note . . . $ % % %
Per Class B Note . . . . $ % % %
Total . . . . . . . . . . $ $ $ $
</TABLE>
(1) Plus accrued interest, if any, from __________ __, 199__.
(2) Before deducting expenses, estimated to be $_______.
------------------------
The Offered Notes are offered subject to prior sale and subject to the
Underwriters' right to reject any order in whole or in part. It is expected
that delivery of the Offered Notes will be made in book-entry form only
through the facilities of The Depository Trust Company and Cedel Bank,
societe anonyme and the Euroclear System on or about __________ __, 199__.
------------------------
Underwriters of the Offered Class A Notes
UNDERWRITERS OF THE CLASS B NOTES
------------------------
The date of this Prospectus Supplement is __________ __, 199__.
(Continued from previous page)
Notes (the "Class A-4 Notes") and, together with the Class A-1 Notes, Class
A-2 Notes and Class A-3 Notes (the "Class A Notes"), and $__________
aggregate principal amount of Class B ____% Asset Backed Notes (the "Class B
Notes") and, together with the Class A Notes (the "Notes") pursuant to an
Indenture to be dated as of __________ __, 199__, between the Trust and The
First National Bank of Chicago, as Indenture Trustee. The Class A-1 Notes are
not being offered hereby. The Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class B Notes are collectively referred to herein as the "Offered
Notes". The Class B Notes will be subordinated to the Class A Notes to the
extent provided herein. 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 __________ __, 199__,
transferred to the Trust by the Seller on the Closing Date. The Notes will be
secured by the assets of the Trust pursuant to the Indenture, subject to the
release of certain assets as collateral to the extent provided herein.
Interest on the Notes will accrue at the respective fixed per annum
interest rates specified above. Interest on the Notes will generally be
payable on the sixth day of each month or, if any such day is not a Business
Day, on the next succeeding Business Day (each, a "Distribution Date"),
commencing __________ __, 199__. Principal of the Notes will be payable on
each Distribution Date to the extent described herein; however, no principal
payments will be made (i) on the Class A-2 Notes until the Class A-1 Notes
have been paid in full, (ii) on the Class A-3 Notes until the Class A-2 Notes
have been paid in full, (iii) on the Class A-4 Notes until the Class A-3
Notes have been paid in full or (iv) on the Class B Notes until the Class A-4
Notes have been paid in full.
Each class of Notes 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 could occur earlier than such dates as described herein. In
addition, the Class A-4 Notes and Class B Notes will be subject to redemption
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.
(Application will be made to list the Offered Notes on the Luxembourg
Stock Exchange.)
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 OFFERED NOTES. 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 OFFERED NOTES 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.
Certain persons participating in this offering may engage in
transactions that stabilize, maintain, or otherwise affect the price of the
Offered Notes. Such transactions may include stabilizing and the purchase of
Offered Notes to cover syndicate short positions. For a description of these
activities, see "Underwriting" herein.
REPORTS TO NOTEHOLDERS
Unless and until Definitive Notes 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 Offered Notes. 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.
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.
Issuer Premier Auto Trust 199__-__ (the "Trust" or the "Issuer"), a
Delaware business trust to be governed pursuant to an Amended
and Restated Trust Agreement dated as of __________ __, 199__
(as amended and supplemented from time to time, the "Trust
Agreement"), among the Seller, the Owner Trustee and Premier
Receivables L.L.C., a Michigan limited liability company that
is indirectly wholly-owned by the Seller (the "Company").
Seller Chrysler Financial Corporation (the "Seller" or "CFC").
Servicer CFC (in such capacity, the "Servicer").
Indenture __________________________________, as trustee under
Trustee 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 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: (i) Class
A-1 ______% Asset Backed Notes (the "Class A-1 Notes") in the
aggregate initial principal amount of $___________; (ii) Class
A-2 ____% Asset Backed Notes (the "Class A-2 Notes") in the
aggregate initial principal amount of $___________; (iii)
Class A-3 ____% Asset Backed Notes (the "Class A-3 Notes") in
the aggregate initial principal amount of $___________; (iv)
Class A-4 ____% Asset Backed Notes (the "Class A-4 Notes") in
the aggregate initial principal amount of $___________ and (v)
Class B ____% Asset Backed Notes (the "Class B Notes") in the
aggregate initial principal amount of $__________. The Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and, Class A-4
Notes are collectively referred to herein as the "Class A
Notes", and the Class A Notes and the Class B Notes are
collectively referred to herein as the "Notes". The Class A-1
Notes are not being offered hereby, and it is expected that
all of the Class A-1 Notes will be purchased on __________ __,
199__ (the "Closing Date") by CFC. The Class A-2 Notes, Class
A-3 Notes, Class A-4 Notes and Class B Notes are referred to
herein collectively as the "Offered Notes."
The Notes will be secured by the assets of the Trust pursuant
to the Indenture.
The
Receivables On the Closing Date, the Trust will purchase
Receivables having an aggregate principal balance of
approximately $________________ (the "Initial Pool
Balance") as of __________ __, 199__ (the "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"), between
the Trust and CFC, as Seller and Servicer. See
"Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables"
herein and in the Prospectus. The Receivables have
been 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 Cutoff Date, the weighted
average annual percentage rate of the Receivables
was approximately _____%, the weighted average
remaining maturity of the Receivables was
approximately _____ months, and the weighted average
original maturity of the Receivables was
approximately _____ months. No Receivable has a
scheduled maturity later than __________ __, 20__
(the "Final Scheduled Maturity Date"). See "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 received from Obligors, 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 sixth day of each month or,
if any such day is not a Business Day, on the
next succeeding Business Day (each, a
"Distribution Date"), commencing __________ __,
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 Class A-1 Notes will bear interest at the
rate of ______% per annum (the "Class A-1
Rate"), the Class A-2 Notes will bear interest
at the rate of ____% per annum (the "Class
A-2 Rate"), the Class A-3 Notes will bear
interest at the rate of ____% per annum (the
"Class A-3 Rate"), the Class A-4 Notes will
bear interest at the rate of ____% per annum
(the "Class A-4 Rate") and the Class B Notes
will bear interest at the rate of ____% per annum
(the "Class B Rate").
The interest rates for the various classes of
Notes are referred to herein collectively as
"Interest Rates".
C. Interest Interest on the outstanding principal amount of
the Notes will accrue at the applicable Interest
Rate from the Closing Date (in the case of the
first Distribution Date) or from the sixth day
of the month preceding the month of a
Distribution Date to and including the fifth day
of the month of such Distribution Date (each
an "Interest Accrual Period"). Interest on each
class of Notes (other than the Class A-1 Notes)
will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
Interest on the Class A-1 Notes will be
calculated on the basis of the actual number
of days in each Interest Accrual Period divided
by 360. See "Description of the Notes - Payments
of Interest". Notwithstanding the Events of
Default described in the Prospectus under the
caption "Description of the Indenture -- The
Indenture -- Events of Default; Rights upon
Event of Default", until the principal amount
of the Class A-4 Notes has been paid in full,
the failure to pay interest due on the Class B
Notes will not be an Event of Default.
D. Principal Principal of the Notes will be payable on each
Distribution Date in an amount equal to the Noteholders'
Principal Distributable Amount for the calendar month
(the "Collection Period") preceding such Distribution
Date (in the case of the first Distribution Date, the
period from and including __________ __, 199__ to and
including __________ __, 199__) to the extent of funds
available therefor. The "Noteholders' Principal
Distributable Amount" will equal the sum of (i) the
Regular Principal Distribution Amount (less, during the
Collateral Release Period described below under
"Overcollateralization and Release of Collateral", the
Cash Release Amount) plus (ii) the Accelerated Principal
Distribution Amount. The "Regular Principal Distribution
Amount" with respect to any Distribution Date will equal
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 Transfer
and Servicing Agreements -- Distributions". The
"Accelerated Principal Distribution Amount" with respect
to a Distribution Date will equal the portion, if any, of
the Total Distribution Amount for the related Collection
Period that remains after payment of (a) the Servicing
Fee (together with any portion of the Servicing Fee that
remains unpaid from prior Distribution Dates), (b) the
interest due on the Notes, (c) the Regular Principal
Distribution Amount, and (d) the amount, if any, required
to be deposited in the Reserve Account on such
Distribution Date.
On the Business Day immediately preceding each Distribution Date (a
"Determination Date"), the Indenture Trustee shall determine the
amount in the Collection Account available for distribution on the
related Distribution Date. Payments to Noteholders will be made on
each Distribution Date in accordance with such determination. The
Servicing Fee in respect of a Collection Period (together with any
portion of the Servicing Fee that remains unpaid from prior
Distribution Dates) will be paid on the Distribution Date such
Collection Period out of collections for such Collection Period.
No principal payments will be made (i) on the Class A-2 Notes until
the Class A-1 Notes have been paid in full; (ii) on the Class A-3
Notes until the Class A-2 Notes have been paid in full; (iii) on
the Class A-4 Notes until the Class A-3 Notes have been paid in
full; or (iv) on the Class B Notes until the Class A-4 Notes have
been paid in full.
The outstanding principal amount of the Class A-1 Notes, to the
extent not previously paid, will be payable on the _____________
Distribution Date (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 __________
Distribution Date (the "Class A-2 Final Scheduled Distribution
Date"); the outstanding principal amount of the Class A-3 Notes, to
the extent not previously paid, will be payable on the ___________
Distribution Date (the "Class A-3 Final Scheduled Distribution
Date"); the outstanding principal amount of the Class A-4 Notes, to
the extent not previously paid, will be payable on the __________
Distribution Date (the "Class A-4 Final Scheduled Distribution
Date"); and the outstanding principal amount of the Class B Notes,
to the extent not previously paid, will be payable on the
______________ Distribution Date (the "Class B Final Scheduled
Distribution Date").
E. Optional Redemption The Class A-4 Notes and Class B 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-4
Notes and Class B Notes plus accrued and unpaid
interest thereon. See "Description of the Notes
-- Optional Redemption" herein.
Overcollateralization and
Release of Collateral The Initial Pool Balance ($________________)
will exceed the initial aggregate principal
amount of the Notes ($_____________) by an
amount equal to $_____________ (the "Initial
Overcollateralization Amount"), which amount is
approximately __% of the initial aggregate
principal amount of the Notes. Unless offset by
losses on the Receivables, the distribution of
the Accelerated Principal Distribution Amount,
if any, on a Distribution Date is expected to
cause the aggregate principal amount of the
Notes to decrease faster than the Pool Balance
decreases, thereby increasing the
Overcollateralization Amount and the
Overcollateralization Percentage. The
"Overcollateralization Amount" in respect of a
Distribution Date is equal to (a) the Pool
Balance as of the beginning of the preceding
Collection Period (the "Related Pool Balance")
minus (b) the aggregate outstanding principal
amount of the Notes after giving effect to
payments made on the Notes on the preceding
Distribution Date (the "Note Amount"). The
"Overcollateralization Percentage" in respect
of a Distribution Date is the percentage
derived from a fraction, the numerator of which
is the Overcollateralization Amount for such
Distribution Date and the denominator of which
is the Related Pool Balance. Subject to the
conditions set forth below, on each
Distribution Date, commencing with the First
Release Distribution Date, certain amounts of
cash and Receivables will be released to the
Trust, free of the lien of the Indenture, and
thereupon paid or transferred to the Company.
Any such cash and Receivables released to
the Company will not be available to make
payments on the Notes.
The release of cash and Receivables to the Trust (and then to the
Company) is subject to the satisfaction of all of the following
conditions:
(1) No release will be permitted until the Distribution Date
(the "First Release Distribution Date") on which the
Overcollateralization Amount is at least equal to:
(Initial Overcollateralization Amount)
plus
((_%) x (Related Pool Balance minus
Initial Overcollateralization Amount))
(2) Subject to condition (4) below, the aggregate principal
balance of Receivables released in respect of a Distribution Date
will equal:
Overcollateralization Amount
less
Targeted Overcollateralization Amount.
The "Targeted Overcollateralization Amount" for a Distribution Date
is equal to:
(Note Amount)
____________ minus (Note Amount)
( (____%) )
(3) Subject to condition (4) below, the amount of cash
released on a Distribution Date (the "Cash Release Amount") will
equal (____%) of the Regular Principal Distribution Amount for such
Distribution Date. However, on any Distribution Date the Cash
Release Amount and any Receivables will be released only after the
Noteholders shall have received principal in an amount at least
equal to (____%) of the Regular Principal Distributable Amount for
such Distribution Date.
(4) The cumulative amount of cash and principal balances of
Receivables released shall not exceed the Initial
Overcollateralization Amount. Consequently, when such cumulative
amount has been released, there will be no further release of cash
or Receivables to the Trust pursuant to the release provisions
described above, and the full Regular Principal Distribution Amount
will thereafter again be distributable as principal to the
Noteholders. The period during which such releases are permitted is
the "Collateral Release Period".
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 equal to
$__________ (the "Specified Reserve Account
Balance"), which is __% of the initial aggregate
principal amount of the Notes. If, after the
Collateral Release Period, the Overcollateralization
Percentage at any time equals at least ____%, then
the Specified Reserve Account Balance will be
$__________, which is ____% of the initial aggregate
principal amount of the Notes.
Funds will be withdrawn from the Reserve Account 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. 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
and the deposit of the Noteholders' Distributable Amount into the
Note Distribution Account. The Reserve Account will be maintained
as an account in the name of the Indenture Trustee.
Certain 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 will be released to the Company (except to the
extent described under "Description of the Transfer and Servicing
Agreements -- Reserve Account").
Collection Account; Priority
of Payments; Subordination
of Class B Notes Except under certain conditions described herein or
as otherwise acceptable to each Rating Agency, 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 related Collection Period,
together with any unpaid Servicing Fees from prior
Distribution Dates, to the Servicer, (ii) the
Noteholders' Interest Distributable Amount and the
Noteholders' Principal Distributable Amount into the
Note Distribution Account and (iii) the remaining
balance, if any, to the Reserve Account.
On each Distribution Date, the amount in the Note Distribution
Account will be applied, first, to pay interest on the Class A
Notes and to pay the Noteholders' Principal Distributable Amount
(up to the outstanding principal amount of the Class A Notes) as
principal of the Class A Notes in the order described herein and,
second, to pay interest on the Class B Notes and, after the
principal amount of the Class A-4 Notes has been
reduced to zero, to pay the Noteholders' Principal Distributable
Amount (less any portion thereof applied to the Class A-4 Notes on
such Distribution Date) as principal of the Class B Notes (up to
the outstanding principal amount of the Class B Notes).
Tax Status In the opinion of Brown & Wood LLP ("Federal Tax
Counsel"), for federal income tax purposes, the Offered
Notes will be characterized as debt, and the Trust will
not be characterized as an association (or a publicly
traded partnership) taxable as a corporation. Each
Noteholder, by the acceptance of a Note, will agree to
treat the Notes as indebtedness. Alternative
characterizations of the Trust and the Class B Notes are
possible, but would not generally result in materially
adverse tax consequences to Class B Noteholders. See
"Certain Federal Income Tax Consequences" herein and
"Certain Federal Income Tax Consequences" and "Certain
State Tax Consequences" in the Prospectus for additional
information concerning the application of federal income
and Michigan tax laws to the Trust and the Notes.
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.
Rating of the Offered
Notes It is a condition to the issuance of the Notes that the
Offered Notes (other than the Class B Notes) be rated in the
highest investment rating category, and that the Class B Notes
be rated at least in the "A" category or its equivalent, by at
least two nationally recognized rating agencies. There can be
no assurance that a rating will not be lowered or withdrawn by
a rating agency if circumstances so warrant.
SPECIAL CONSIDERATIONS
Limited Liquidity. There is currently no secondary market for the Notes
offered hereby. Each Underwriter currently intends to make a market in the
Notes offered hereby, 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 Noteholders with liquidity of investment or
that it will continue for the life of the Notes offered hereby.
Trust's Relationship to the Seller; Financial Condition of the Seller
and Chrysler Corporation. CFC is not generally obligated to make any payments
in respect of the Notes or the Receivables. However, if CFC were to cease
acting as Servicer, delays in processing payments on the Receivables and
information in respect thereof could occur and result in delays in
payments to the Noteholders.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
reported earnings before income taxes, extraordinary item, and the cumulative
effect of a change in accounting principle of $___ billion in 199__, compared
with $___ billion in 199__. Net earnings for 199__ were $___ billion, or
$____ per common share, compared with $___ billion, or $____ per common share
in 199__.
Chrysler also reported earnings before income taxes and extraordinary
item of $_____ million in the fourth quarter of 199__, compared with $_____
million in the fourth quarter of 199__. Net earnings for the fourth quarter
of 199__ were $___ million, or $____ per common share, compared with $_____
million, or $____ per common share in the fourth quarter of 199__.
CFC achieved net earnings of $___ million in 199__ compared to $___
million and $___ million in 199__ and 199__, respectively. The increase in
net earnings for 199__ compared to 199__ primarily reflects net margin
improvements partially offset by an increase in the provision for credit
losses. The increase in net earnings for 199__ compared to 199__ primarily
reflects higher levels of automotive financing, lower operating expenses and
lower costs of bank facilities.
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 of the Class B Notes; Limited Assets. Distributions of
interest and principal on the Class B Notes will be subordinated in priority
of payment to interest and principal due on the Class A Notes. Consequently,
the Class B Noteholders will not receive any payments on a Distribution Date
unless the full amount of interest on and principal of the Class A Notes due
on such Distribution Date has been paid to the Class A Noteholders. The Class
B Noteholders will not receive any distributions of principal until the
Distribution Date on which all of the Class A-4 Notes have been paid in full.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables and the
Reserve Account. Holders of the Notes must rely for repayment upon payments
on the Receivables and, if and to the extent available, amounts on deposit in
the Reserve Account. 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, 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.
Ratings of the Notes. It is a condition to the issuance of the Notes
that each class of the Class A Notes be rated in the highest investment
rating category, and that the Class B Notes be rated at least in the "A"
category 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 Notes, inasmuch as such rating does not comment as to
market price or suitability for a particular investor. The ratings of the
Notes address the likelihood of the payment of principal and interest on the
Notes pursuant to their terms. 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, (iii) making payments
on the Notes and (iv) engaging in other activities that are necessary or
suitable to accomplish the foregoing or are incidental thereto or connected
therewith.
The Trust will initially be capitalized with equity (exclusive of the
amounts deposited in the Reserve Account) equal to $__________, which is the
difference between the aggregate principal amount of the Receivables as of
the Cutoff Date and the initial aggregate principal amount of the Notes. The
equity in the Trust (including the right to receive distributions from the
Reserve Account) will be evidenced by certificates issued by the Trust to the
Company, which may thereafter hold such equity or sell or otherwise transfer
it. In the case of any such sale or transfer to another entity, such entity
may become the "Company" for purposes of the events described under
"Description of the Transfer and Servicing Agreements -- Insolvency Events"
in the Prospectus and for other purposes. The net proceeds from the sale of
the Notes will be used by the Trust to purchase the Receivables from the
Seller pursuant to the Sale and Servicing Agreement.
If the protection provided to the investment of the Noteholders by the
Reserve Account is insufficient, the Trust will look only to the Obligors on
the Receivables and the proceeds from the repossession and sale of Financed
Vehicles which secure defaulted Receivables. In such event, certain factors,
such as the Trust's not having first priority perfected security interests in
some of the Financed Vehicles, may affect the Trust's ability to realize on
the collateral securing the Receivables, and thus may reduce the proceeds to
be distributed to Noteholders with respect to the Notes. See "Description of
the Transfer and Servicing Agreements -- Distributions" and "-- Reserve
Account" herein and "Certain Legal Aspects of the Receivables" in the
Prospectus.
The Trust's principal offices are in Wilmington, Delaware, in care of
Chase Manhattan Bank Delaware, as Owner Trustee, at the address listed below
under "-- The Owner Trustee".
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the Trust as of
the Closing Date, as if the issuance and sale of the Notes had taken place on
such date:
Class A-1 Notes $
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
Equity
------------------
Total $
THE OWNER TRUSTEE
_____________________________ is the Owner Trustee under the Trust
Agreement. _____________________________ is a Delaware banking corporation
and its principal offices are located at
_______________________________________________________. 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 only the
Receivables purchased on the Closing Date. The Receivables were purchased,
directly or indirectly, by the Seller from Dealers in the ordinary course of
business and were selected from the Seller's portfolio for inclusion in the
Receivables Pool by several criteria, some of which are set forth in the
Prospectus under "The Receivables Pools", as well as the requirement that, as
of the Cutoff Date, each Receivable (i) had a principal balance of at least
($300) and (ii) was not more than 30 days past due (an account is not
considered past due if the amount past due is less than 10% of the scheduled
monthly payment). As of the Cutoff Date, no Obligor on any Receivable was
noted in the related records of the Seller as being the subject of a
bankruptcy proceeding, and no Obligor on any Receivable financed a Financed
Vehicle under the Seller's "New-Finance Buyer Plan" program. No selection
procedures believed by the Seller to be adverse to Noteholders were used in
selecting the Receivables.
Set forth in the following tables is information concerning the
composition, distribution by annual percentage rate ("APR") and the
geographic distribution of the Receivables Pool as of the Cutoff Date.
PREMIER AUTO TRUST 199__-__
COMPOSITION OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE AVERAGE
APR OF AGGREGATE NUMBER OF REMAINING ORIGINAL PRINCIPAL
RECEIVABLES PRINCIPAL BALANCE RECEIVABLES TERM TERM BALANCE
<S> <C> <C> <C> <C> <C>
% $ $
</TABLE>
PREMIER AUTO TRUST 199__-__
DISTRIBUTION BY APR OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
APR RANGE RECEIVABLES BALANCE BALANCE(1)
<S> <C> <C> <C>
</TABLE>
___________________
(1) Percentages may not add to 100.0% because of rounding.
PREMIER AUTO TRUST 199_-_
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
Percent of
Aggregate
Principal Percent of Aggregate
State(2) Balance(1) State(2) Principal Balance(1)
<S> <C> <C> <C>
</TABLE>
___________________
(1) Percentages may not add to 100.0% because of rounding.
(2) Based on physical addresses of the dealers originating the receivables.
Approximately _____% of the aggregate principal balance of the
Receivables, constituting _____% of the number of the Receivables, represent
previously titled vehicles. Approximately _____% of the aggregate principal
balance of the Receivables represent financing of vehicles manufactured or
distributed by Chrysler. All of the Receivables are Simple Interest
Receivables. Approximately ____% of the Receivables are Fixed Value
Receivables. See "The Receivables Pools" in the Prospectus for a further
description of the characteristics of 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 CFC continues to service. There can be no assurance that the
delinquency, repossession and net loss experience on the Receivables will be
comparable to that set forth below.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
AT DECEMBER 31,
1996 1995 1994
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . . . . 1,679,880 $21,197 1,653,533 $20,913 1,444,736 $16,977
Period of Delinquency
31-60 Days . . . . . . . . 65,297 $843 55,507 $720 25,888 $293
61 Days or More . . . . . . 8,175 118 6,792 100 2,085 27
Total Delinquencies . . . . . 73,472 $961 62,299 $820 27,973 $320
Total Delinquencies
as a Percent of
the Portfolio . . . . . . . 4.37% 4.53% 3.77% 3.92% 1.94% 1.88%
</TABLE>
<TABLE>
<CAPTION> AT DECEMBER 31,
1993 1992 1991
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Portfolio . . . . . . . . . . 1,352,218 $14,116 1,344,799 $12,082 1,437,451 $11,994
Period of Delinquency
31-60 Days . . . . . . . . 16,350 $153 15,964 $134 21,025 $180
61 Days or More . . . . . . 1,383 15 1,376 13 2,048 20
Total Delinquencies . . . . . 17,733 $168 17,340 $147 23,073 $200
Total Delinquencies as a
Percent of the Portfolio . 1.31% 1.19% 1.29% 1.22% 1.61% 1.67%
</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 CFC continues
to service.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Average Amount Outstanding
During the Period . . . . $21,062 $19,486 $15,517 $12,882 $11,818 $12,709
Average Number of Contracts
Outstanding During the
Period . . . . . . . . . 1,671,405 1,572,963 1,396,497 1,341,084 1,382,898 1,517,178
Percent of Contracts
Acquired During the
Period with Recourse
to the Dealer . . . . . . 9.05% 14.8% 17.0% 16.2% 15.8% 21.7%
Repossessions as a Percent
of Average Number of
Contracts Outstanding . . . 3.82% 3.05% 2.36% 2.15% 2.31% 2.63%
Net Losses as a Percent of
Liquidations(2)(3) . . . 3.17% 2.25% 1.38% 1.34% 1.71% 2.28%
Net Losses as a Percent of
Average Amount
Outstanding(2) . . . . . 1.68% 1.16% 0.73% 0.75% 0.97% 1.21%
</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 CFC continues to service.
(2) Net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any
recoveries on contracts charged off in the period or any prior periods,
including any losses resulting from disposition expenses and any losses
resulting from the failure to recover commissions to dealers with
respect to contracts that are prepaid or charged off.
(3) 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. By
aggregate principal balance, approximately ____% of the Receivables represent
contracts with recourse to Dealers. The Seller applies underwriting standards
to the purchase of contracts without regard to whether recourse to Dealers is
provided. Based on its experience, the Seller believes that there is no
material difference between the rates of delinquency and repossession on
contracts with recourse against Dealers as compared to contracts without
recourse against Dealers. However, the net loss experience of contracts
without recourse against Dealers is higher than that of contracts with
recourse against Dealers because, under its recourse obligation, the Dealer
is responsible to the Seller for payment of the unpaid balance of the
contract, provided that the Seller repossesses the vehicle from the retail
buyer and returns it to the Dealer within a specified time. In the event of a
Dealer's bankruptcy, a bankruptcy trustee might attempt to characterize
recourse sales of contracts as loans to the Dealer secured by the contracts.
Such an attempt, if successful, could result in payment delays or losses on
the affected Receivables.
CHRYSLER FINANCIAL CORPORATION
Information regarding the Seller is set forth under "Chrysler Financial
Corporation" in the Prospectus. In addition, as of ____________, 199__, the
Seller had approximately _____ employees and was managing $____ billion in
finance receivables and provided financial services to automobile dealers and
their customers through ___ zone offices in the United States. During 199__,
the Seller financed or leased approximately _______ new and used vehicles at
retail, including approximately _______ new Chrysler passenger cars and light
duty trucks, representing ___% of Chrysler's U.S. retail and fleet
deliveries. The Seller also financed at wholesale approximately _________ new
Chrysler passenger cars and light duty trucks, representing ___% of
Chrysler's U.S. factory unit sales for the year ended ____________, 199__.
WEIGHTED AVERAGE LIFE OF THE NOTES
Information regarding certain maturity and prepayment considerations
with respect to the Securities is set forth under "Weighted Average Life of
the Securities" in the Prospectus. No principal payments will be made on the
Class A-2 Notes until all Class A-1 Notes have been paid in full; no
principal payments will be made on the Class A-3 Notes until all Class A-2
Notes have been paid in full; no principal payments will be made on the Class
A-4 Notes until all Class A-3 Notes have been paid in full and no principal
payments will be made on the Class B Notes until the Class A-4 Notes have
been paid in full. See "Description of the Notes -- Payments of Principal"
herein. As the rate of payment of principal of each class of Notes depends
primarily on the rate of payment (including prepayments) of the principal
balance of the Receivables, final payment of any class of the Notes could
occur significantly earlier than their respective final scheduled
Distribution Dates. In addition, the rate of payment
of principal of each class of Notes will be affected by the Accelerated
Principal Distribution Amounts applied to the payment of the principal of the
Notes and, during the Collateral Release Period, the reduction in the amount
of the Regular Principal Distribution Amount that is applied to the payment
of principal of the Notes. Noteholders will bear the risk of being able to
reinvest principal payments on the Notes at yields at least equal to the
yields on their respective Notes.
DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued pursuant to the terms of the Indenture, 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 Notes. The following summary describes certain terms of the Notes and the
Indenture. The summary does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the Notes
and the Indenture. The following summary supplements, and to the extent
inconsistent therewith, replaces the description of the general terms and
provisions of the Notes of any given series and the related Indenture set
forth in the Prospectus, to which description reference is hereby made. The
First National Bank of Chicago, a national banking association, will be the
Indenture Trustee under the Indenture.
PAYMENTS OF INTEREST
Each class of Notes will constitute (Fixed Rate Securities), as such
term is defined under "Certain Information Regarding the Securities -- Fixed
Rate Securities" in the Prospectus. Interest on the principal balances of the
classes of the Notes will accrue at their respective per annum Interest Rates
and will be payable to the Noteholders monthly on each Distribution Date,
commencing ____________, 199_. Interest on the outstanding principal amount
of the Notes will accrue at the applicable Interest Rate from the Closing
Date (in the case of the first Distribution Date) or from the sixth day of
the month preceding the month of a Distribution Date to and including the
fifth day of the month of the Distribution Date (each an "Interest Accrual
Period"). Interest on the Notes (other than the Class A-1 Notes) will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Interest on the Class A-1 Notes will be calculated on the basis of the actual
number of days in each Interest Accrual Period divided by 360. Interest
payments on the Notes will generally be derived from the Total Distribution
Amount remaining after the payment of the Servicing Fee and from the Reserve
Account. See "Description of the Transfer and Servicing Agreements --
Distributions" and "-- Reserve Account" herein.
Interest payments to all classes of Class A 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 Class A Noteholders will
receive their ratable share (based upon the aggregate amount of interest due
to such class of Class A Noteholders) of the aggregate amount available to be
distributed in respect of interest on the Class A Notes. The Class B
Noteholders will receive interest on the Class B Notes only to the extent of
the funds remaining after payment of principal and interest due on the Class
A Notes. However, notwithstanding the Events of Default described in the
Prospectus under the caption "Description of the Indenture -- The Indenture
- -- Events of Default; Rights upon Event of Default", until the principal
amount of the Class A-4 Notes has been paid in full, the failure to pay
interest due on the Class B Notes will not be an Event of Default.
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 Regular Principal
Distribution Amount (less the Cash Release Amount during the Collateral
Release Period) plus (ii) the Accelerated Principal Distribution Amount. The
"Regular Principal Distribution Amount" with respect to any Distribution Date
will equal the sum of 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 plus the principal
balances of defaulted Receivables written off in respect of such Collection
Period, subject to certain limitations. The "Accelerated Principal
Distribution Amount" with respect to any Distribution Date will equal the
portion, if any, of the Total Distribution Amount for the related Collection
Period that remains after payment of (a) the Servicing Fee, (b) the
Noteholders' Interest Distributable Amount, (c) the Regular Principal
Distribution Amount, and (d) the amount, if any, required to be deposited in
the Reserve Account on such Distribution Date. Principal payments on the
Notes will generally be derived from the Total Distribution Amount and the
amount, if any, in the Reserve Account remaining after the payment of the
Servicing Fee and the Noteholders' Interest Distributable Amount and,
in the case of any Accelerated Principal Distribution Amount, the
amount, if any, required to be deposited into the Reserve Account. See
"Description of the Transfer and Servicing Agreements -- Distributions"
and "-- Reserve Account" herein.
On the Business Day immediately preceding each Distribution Date (a
"Determination Date"), the Indenture Trustee shall determine the amount in
the Collection Account for the related Collection Period allocable to
interest and the amount allocable to principal on an actual basis, and
payments to Noteholders on the following Distribution Date will be based on
such allocation.
On each Distribution Date, principal payments on the Notes will be
applied in the following order of priority: (i) to the principal balance of
the Class A-1 Notes until the principal balance of the Class A-1 Notes is
reduced to zero; (ii) to the principal balance of the Class A-2 Notes until
the principal balance of the Class A-2 Notes is reduced to zero; (iii) to the
principal balance of the Class A-3 Notes until the principal balance of the
Class A-3 Notes is reduced to zero; (iv) to the principal balance of the
Class A-4 Notes until the principal balance of the Class A-4 Notes is reduced
to zero; and (v) to the principal balance of the Class B Notes until the
principal balance of the Class B Notes has been reduced to zero. It is
expected that all of the Class A-1 Notes, which are not being offered hereby,
will be purchased by CFC, which may hold or later resell such Notes. 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 Scheduled Distribution Date; 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 principal balance of the
Class A-4 Notes, to the extent not previously paid, will be due on the Class
A-4 Final Scheduled Distribution Date; and the principal balance of the Class
B Notes, to the extent not previously paid, will be due on the Class B 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.
OPTIONAL REDEMPTION
The Class A-4 Notes and Class B 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 of the Class A-4 Notes and Class B
Notes will be equal to the unpaid principal amount of such Notes plus accrued
and unpaid interest thereon (the "Redemption Price").
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of the Sale and Servicing
Agreement, the Administration Agreement and the Trust Agreement
(collectively, the "Transfer and Servicing Agreements"). Forms of the
Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement. A copy of the Sale and Servicing Agreement will be
filed with the Commission following the issuance of the Notes. The summary
does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all the provisions of the Transfer and Servicing
Agreements. The following summary supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and provisions of
the Transfer and Servicing Agreements set forth in the Prospectus, to which
description reference is hereby made.
SALE AND ASSIGNMENT OF RECEIVABLES
Certain information regarding the conveyance of the Receivables by the
Seller to the Trust on the Closing Date pursuant to the Sale and Servicing
Agreement is set forth in the Prospectus under "Description of the Transfer
and Servicing Agreements -- Sale and Assignment of Receivables".
ACCOUNTS
No Payahead Account will be established in relation to the Trust because
all of the Receivables are Simple Interest Receivables. The assets of the
Trust also will not include a Pre-Funding Account. All other Accounts
referred to under "Description of the Transfer and Servicing Agreements --
Accounts" in the Prospectus, as well as a Reserve Account, will be
established by the Servicer and maintained with the Indenture Trustee in the
name of the Indenture Trustee on behalf of the Noteholders.
NO ADVANCES
The Servicer will not make Advances in respect of the Receivables.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the
Servicer will be 1.00% per annum of the Pool Balance as of the first day of
the related Collection Period. The Servicing Fee in respect of a Collection
Period (together with any portion of the Servicing Fee that remains unpaid
from prior Distribution Dates) will be paid on the Distribution Date
following such Collection Period out of collections for such Collection
Period. See "Description of the Transfer and Servicing Agreements --
Servicing Compensation and Payment of Expenses" in the Prospectus.
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 Regular Principal Distribution Amount
(other than the portion thereof attributable to Realized Losses). "Realized
Losses" means the excess of the principal balance of any Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
The "Interest Distribution Amount" on any 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 interest; (ii) all proceeds of the liquidation of defaulted
Receivables ("Liquidated Receivables"), net of expenses incurred by the
Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Liquidated Receivables ("Liquidation
Proceeds"), to the extent attributable to interest due thereon in accordance
with the Servicer's customary servicing procedures, and all recoveries in
respect of Liquidated Receivables which were written off in prior Collection
Periods; (iii) the 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 (iv) Investment Earnings for such Distribution
Date. The Interest Distribution Amount shall be determined on the related
Determination Date on an actual basis.
The "Regular Principal Distribution Amount" on any 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; (ii) all Liquidation Proceeds
attributable to the principal amount of Receivables which became Liquidated
Receivables during such Collection Period in accordance with the Servicer's
customary servicing procedures, plus the amount of Realized Losses with
respect to such Liquidated Receivables; (iii) to the extent attributable to
principal, the 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; (iv) partial prepayments
relating to refunds of extended warranty protection plan costs or of physical
damage, credit life or disability insurance policy premiums, but only if such
costs or premiums were financed by the respective Obligor as of the date of
the original contract; and (v) on the Distribution Date immediately following
the Final Scheduled Maturity Date (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 on an actual basis.
The Interest Distribution Amount and the Regular Principal Distribution
Amount on any Distribution Date shall exclude 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.
Deposits to the Distribution Account. On each Distribution Date, the
Servicer 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 payment of the Servicing Fee for
the related Collection Period and all unpaid Servicing Fees from prior
Collection Periods, 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; and
(iv) the remaining balance, if any, to the Reserve Account.
For purposes hereof, the following terms shall have the following
meanings:
"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 Accrual Period on each class of Notes at the respective
Interest Rate for such class on the outstanding principal balance of the
Notes of such class on the immediately preceding Distribution Date (or,
in the case of the first Distribution Date, on the Closing
Date), after giving effect to all payments of principal to the
Noteholders of such class on or prior to such Distribution Date.
"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 Accrual 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; (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; (iv) on the Class A-4 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-4 Notes to zero; and (v) on the Class B
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 B
Notes to zero.
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to each Distribution Date, the sum of (i) the Regular Principal
Distribution Amount (less the Cash Release Amount for such Distribution
Date during the Collateral Release Period) and (ii) the Accelerated
Principal Distribution Amount.
"Noteholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date, the excess of the Noteholders' Monthly
Principal Distributable Amount and any outstanding Noteholders'
Principal Carryover Shortfall from the preceding Distribution Date over
the amount in respect of principal that is actually deposited in the
Note Distribution Account.
On each Distribution Date, all amounts on deposit in the Note
Distribution Account (other than Investment Earnings) will be generally paid
in the following order of priority:
(i) to the applicable Class A Noteholders, accrued and unpaid
interest on the outstanding principal balance of the applicable class of
Notes at the applicable Interest Rate;
(ii) the Noteholders' Principal Distributable Amount in the
following order of priority:
(a) to the Class A-1 Noteholders in reduction of principal
until the principal balance of the Class A-1 Notes has been reduced
to zero;
(b) to the Class A-2 Noteholders in reduction of principal
until the principal balance of the Class A-2 Notes has been reduced
to zero;
(c) to the Class A-3 Noteholders in reduction of principal
until the principal balance of the Class A-3 Notes has been reduced
to zero;
(d) to the Class A-4 Noteholders in reduction of principal
until the principal balance of the Class A-4 Notes has been reduced
to zero; and
(iii) to the Class B Noteholders, accrued and unpaid interest on
the outstanding principal balance of the Class B Notes at the Class B
Rate; and
(iv) to the Class B Noteholders in reduction of principal until
the principal balance of the Class B Notes has been reduced to zero.
OVERCOLLATERALIZATION AND RELEASE OF COLLATERAL
The Initial Pool Balance ($________________) will exceed the initial
aggregate principal amount of the Notes ($_____________) by an amount equal
to $_____________ (the "Initial Overcollateralization Amount"), which amount
is approximately __% of the initial aggregate principal amount of the Notes.
Unless offset by losses on the Receivables, the distribution of the
Accelerated Principal Distribution Amount, if any, on a Distribution Date is
expected to cause the aggregate principal amount of the Notes to decrease
faster than the Pool Balance decreases, thereby increasing the
Overcollateralization Amount and the Overcollateralization Percentage. The
"Overcollateralization Amount" in respect of a Distribution Date is equal to
(a) the Pool Balance as of the beginning of the preceding Collection Period
(the "Related Pool Balance") minus (b) the aggregate outstanding principal
amount of the Notes after giving effect to payments made on the Notes on the
preceding Distribution Date (the "Note Amount"). The "Overcollateralization
Percentage" in respect of a Distribution Date is the percentage derived from
a fraction, the numerator of which is the Overcollateralization Amount for
such Distribution Date and the denominator of which is the Related Pool
Balance. Subject to the conditions set forth below, on each Distribution
Date, commencing with the First Release Distribution Date, certain amounts of
cash and Receivables will be released to the Trust, free of the lien of the
Indenture, and thereupon paid or transferred to the Company. Any such cash
and Receivables released to the Company will not be available to make
payments on the Notes.
The release of cash and Receivables to the Trust (and then to the
Company) is subject to the satisfaction of all of the following conditions:
(1) No release will be permitted until the Distribution Date (the
"First Release Distribution Date") on which the Overcollateralization Amount
is at least equal to:
(Initial Overcollateralization Amount)
plus
((_%) X (Related Pool Balance minus Initial Overcollateralization Amount))
(2) Subject to condition (4) below, the aggregate principal balance of
Receivables released in respect of a Distribution Date will equal:.
Overcollateralization Amount less Targeted Overcollateralization Amount
The "Targeted Overcollateralization Amount" for a Distribution Date is equal
to:
(Note Amount)
____________ minus (Note Amount)
( (____%) )
(3) Subject to condition (4) below, the amount of cash released on such
Distribution Date (the "Cash Release Amount") will equal (___%) of the
Regular Principal Distribution Amount for such Distribution Date. However, on
any Distribution Date the Cash Release Amount and any Receivables will be
released only after the Noteholders shall have received principal in an
amount at least equal to (____%) of the Regular Principal Distributable
Amount for such Distribution Date.
(4) The cumulative amount of cash and principal balances of Receivables
released shall not exceed the Initial Overcollateralization Amount.
Consequently, when such cumulative amount has been released, there will be no
further release of cash or Receivables to the Trust pursuant to the release
provisions described above, and the full Regular Principal Distribution
Amount will thereafter again be distributable as principal to the
Noteholders. The period during which such releases are permitted is the
"Collateral Release Period".
RESERVE ACCOUNT
The protection afforded to the Noteholders will be effected both by the
Overcollateralization Amount and by the establishment of the Reserve Account.
The Reserve Account will be created with an initial deposit by the Seller on
the Closing Date of cash or Eligible Investments in the amount of $__________
(the "Specified Reserve Account Balance"), which is ____% of the initial
aggregate principal amount of the Notes. If, after the Collateral Release
Period, the Overcollateralization Percentage at any time equals at least
____%, then the Specified Reserve Account Balance will be $__________, which
is ____% of the initial aggregate principal amount of the Notes.
Amounts held from time to time in the Reserve Account will continue to
be held for the benefit of Noteholders. On each Distribution Date, funds will
be withdrawn from the Reserve Account to the extent that the Total
Distribution Amount (after the payment of the Servicing Fee) with respect to
any Collection Period is less than the Noteholders' Distributable Amount and
will be deposited in the Note Distribution Account. 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 and the
deposit of the Noteholders' Distributable Amount into the Note Distribution
Account.
If the amount on deposit in the Reserve Account on any Distribution Date
(after giving effect to all deposits therein or other 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 shall instruct the Indenture Trustee to
distribute such excess to the Company. Upon any distribution to the Company
of amounts from the Reserve Account, the Noteholders will not have any rights
in, or claims to, such amounts. Subsequent to any reduction or withdrawal by
any Rating Agency of its rating of any class of Class A 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 Class A Noteholders as an accelerated payment of principal on such
Distribution Date.
After the payment in full, or the provision for such payment, of (i) all
accrued and unpaid interest on the Notes and (ii) the outstanding principal
balance of the Notes, any funds remaining on deposit in the Reserve Account,
subject to certain limitations, will be paid to the Company.
The Overcollateralization Amount and the Reserve Account are intended to
enhance the likelihood of receipt by Noteholders of the full amount of
principal and interest due them and to decrease the likelihood that the
Noteholders will experience losses. However, in certain circumstances, the
Reserve Account could be depleted. If the amount required to be withdrawn
from the Reserve Account to cover shortfalls in collections on the
Receivables exceeds the amount of available cash in the Reserve Account,
Noteholders could incur losses or a temporary
shortfall in the amounts distributed to the Noteholders could result, which
could, in turn, increase the average life of the Notes.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Brown & Wood LLP, counsel for the Underwriters and
special tax counsel for the Trust, for federal income tax purposes, the
Offered Notes will be characterized as debt, and the Trust will not be
characterized as an association (or a publicly traded partnership) taxable as
a corporation. If, contrary to the above opinion, the IRS successfully
asserted that the Class B Notes did not represent debt for federal income tax
purposes, such Notes might be treated as equity interests in the Trust. In
the event the Class B Notes were treated as interests in a partnership, the
consequences governing the Certificates as equity interests in a partnership
described in the Prospectus under "TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS
MADE -- Tax Consequences to Holders of the Certificates" would apply to the
holders of such Notes.
ERISA CONSIDERATIONS
The Offered Notes may be purchased by an employee benefit plan or an
individual retirement account (a "Plan") subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"). A fiduciary of a Plan
must determine that the purchase of an Offered Note is consistent with its
fiduciary duties under ERISA and does not result in a nonexempt prohibited
transaction as defined in Section 406 of ERISA or Section 4975 of the Code.
For additional information regarding treatment of the Offered Notes under
ERISA, see "ERISA Considerations" in the Prospectus.
The Offered Notes may not be purchased with the assets of a Plan if the
Seller, the Indenture Trustee, the Owner Trustee or any of their affiliates
(a) has investment or administrative discretion with respect to such Plan
assets; (b) has authority or responsibility to give, or regularly gives,
investment advice with respect to such Plan assets for a fee and pursuant to
an agreement or understanding that such advice (i) will serve as a primary
basis for investment decisions with respect to such Plan assets and (ii) will
be based on the particular investment needs for such Plan; or (c) is an
employer maintaining or contributing to such Plan.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to cause the
Trust to sell to each of the Underwriters named below (collectively, the
"Underwriters"), and each of the Underwriters has severally agreed to
purchase, the principal amount of the Offered Notes set forth opposite its
name below:
Class A-2 Notes
$
Total . . . . . . . . . . . . . . . . . . . . . $
Class A-3 Notes
Principal
Amount
$
Total . . . . . . . . . . . . . . . . . . . . . $
Class A-4 Notes
Principal
Amount
$
Total . . . .. . . . . . . . . . . . . . . . . . $
Class B Notes
Principal
Amount
$
Total . . . . . . . . . . . . . . . . . . . . . . $
The Seller has been advised by the Underwriters that they propose
initially to offer the Offered Notes to the public at the prices set forth
herein, and to certain dealers at such prices less the initial concession not
in excess of _____% per Class A-2 Note, _____% per Class A-3 Note, _____% per
Class A-4 Note and _____% per Class B Note. The Underwriters may allow and
such dealers may reallow a concession not in excess of _____% per Class A-2
Note, _____% per Class A-3 Note, _____% per Class A-4 Note and _____% per
Class B Note to certain other dealers. After the initial public offering of
the Offered Notes, the public offering price and such concessions may be
changed.
Until the distribution of the Offered Notes is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Offered Notes. As an exception to
these rules, the Underwriters are permitted to engage in certain transactions
that stabilize the price of the Offered Notes. Such transactions consist of
bids or purchases for the purpose of pegging, fixing or maintaining the price
of the Offered Notes.
If the Underwriters create a short position in the Offered Notes in
connection with the offering, i.e., if they sell more Offered Notes than are
set forth on the cover page of this Prospectus Supplement, the Underwriters
may reduce that short position by purchasing Offered Notes in the open
market.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases.
Neither the Seller nor any of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the prices of the Offered Notes. In
addition, neither the Seller nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
Each Underwriter has represented and agreed that (a) it has not offered
or sold, and will not offer or sell, any Offered Notes to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
that do not constitute an offer to the public in the United Kingdom for the
purposes of the Public Offers of Securities Regulations 1995, (b) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 of Great Britain with respect to anything done by it in
relation to the Offered Notes in, from or otherwise involving the United
Kingdom and (c) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document in connection with the issue of the
Offered Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or is a person to whom the document may otherwise lawfully be issued or
passed on.
Upon receipt of a request by an investor who has received an electronic
Prospectus Supplement and Prospectus from an Underwriter or a request by such
investor's representative within the period during which there is an
obligation to deliver a Prospectus Supplement and Prospectus, the Seller or
the Underwriter will promptly deliver, or cause to be delivered, without
charge, a paper copy of the Prospectus Supplement and Prospectus.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain
legal matters relating to the Offered Notes will be passed upon for the
Underwriters and certain federal income tax and other matters will be passed
upon for the Trust by Brown & Wood LLP, New York, New York. Brown & Wood LLP
may from time to time render legal services to Chrysler Financial Corporation
and its affiliates.
INDEX OF TERMS
Accelerated Principal Distribution Amount . . . . . . . . . . . . . . . . S-
APR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cash Release Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
CEDEL Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
CFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-1 Final Scheduled Distribution Date . . . . . . . . . . . . . . . S-
Class A-1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-1 Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-2 Final Scheduled Distribution Date . . . . . . . . . . . . . . . S-
Class A-2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-2 Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-3 Final Scheduled Distribution Date . . . . . . . . . . . . . . . S-
Class A-3 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-3 Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-4 Final Scheduled Distribution Date . . . . . . . . . . . . . . . S-
Class A-4 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class A-4 Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Final Scheduled Distribution Date . . . . . . . . . . . . . . . . S-
Class B Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Class B Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collateral Release Period . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
CTAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Depositaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
EITF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
ESI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Euroclear Operator . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Euroclear Participants . . . . . . . . . . . . . . . . . . . . . . . . . S-
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Federal Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Distribution Date . . . . . . . . . . . . . . . . . . . . S-
Final Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . . . S-
First Release Distribution Date . . . . . . . . . . . . . . . . . . . . . S-
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Initial Overcollateralization Amount . . . . . . . . . . . . . . . . . . S-
Initial Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . . . . . . S-
Interest Distribution Amount . . . . . . . . . . . . . . . . . . . . . . S-
Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidated Receivables . . . . . . . . . . . . . . . . . . . . . . . . . S-
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Michigan Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Note Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Noteholders' Distributable Amount . . . . . . . . . . . . . . . . . . . . S-
Noteholders' Interest Carryover Shortfall . . . . . . . . . . . . . . . . S-
Noteholders' Interest Distributable Amount . . . . . . . . . . . . . . . S-
Noteholders' Monthly Interest Distributable Amount . . . . . . . . . . . S-
Noteholders' Monthly Principal Distributable Amount . . . . . . . . . . . S-
Noteholders' Principal Carryover Shortfall . . . . . . . . . . . . . . . S-
Noteholders' Principal Distributable Amount . . . . . . . . . . . . . . . S-
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Offered Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Overcollateralization Amount . . . . . . . . . . . . . . . . . . . . . . S-
Overcollateralization Percentage . . . . . . . . . . . . . . . . . . . . S-
Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
PEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Realized Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Regular Principal Distribution Amount . . . . . . . . . . . . . . . . . . S-
Related Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Sale and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . S-
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Specified Reserve Account Balance . . . . . . . . . . . . . . . . . . . . S-
Targeted Overcollateralization Amount . . . . . . . . . . . . . . . . . . S-
Terms and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Thrifty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Total Distribution Amount . . . . . . . . . . . . . . . . . . . . . . . . S-
Transfer and Servicing Agreements . . . . . . . . . . . . . . . . . . . . S-
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . S-
Subject to completion, dated August 1, 1997
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 the registration or qualification under the securities laws
of any such State.
PROSPECTUS
- ----------
PREMIER AUTO TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
---------------------
CHRYSLER FINANCIAL CORPORATION
SELLER AND 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 (each, a "Trust").
Each Trust will be formed pursuant to either (i) a Trust Agreement to be
entered into among Chrysler Financial Corporation ("CFC"), as seller, the
Trustee specified in the related Prospectus Supplement (the "Trustee") and an
entity which will be specified in the related Prospectus Supplement and which
initially will be owned, directly or indirectly, by CFC (such entity, as
identified in the related Prospectus Supplement, the "Company"), or (ii) a
Pooling and Servicing Agreement to be entered into between the Trustee and
CFC, as seller and servicer. A Trust may issue one or more series of
Securities. If a series of Securities includes Notes, such Notes 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 or, if the related Trust issues more than one series of
Securities, a separate subdivision of such Trust allocated to such series of
Certificates. 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 and may include
certain other assets, all as described herein and in the related Prospectus
Supplement (collectively, with respect to a series of Securities issued by
such Trust, the "Series Trust Property"). If the Trust issues more than one
series of Securities, the Securities of a series will be supported solely by
the Series Trust Property allocated to such series and will not have any
rights in or claim on, or receive any payments from, the Series Trust
Property allocated to any other series of Securities issued by such Trust.
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 Trustee or the Indenture
Trustee, which will be used to purchase additional motor vehicle retail
installment sale contracts (the "Subsequent Receivables") from CFC 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. 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 and/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, 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 ____________, 199_.
AVAILABLE INFORMATION
Chrysler Financial Corporation, as originator of each Trust, has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement (together with all amendments and exhibits thereto, referred to
herein as the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to any Notes and the
Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement which may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; and at the Commission's regional
offices at Citicorp Center, 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661 and Seven World Trade Center, New York, New York 10048. Copies
of the Registration Statement may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including Chrysler Financial
Corporation, that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by Chrysler Financial Corporation, as originator of
the Trust referred to in the accompanying Prospectus Supplement, pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities offered by such Trust shall be
deemed to be incorporated by reference in this Prospectus. Any statement
contained herein or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Chrysler Financial Corporation 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: 248-948-3058).
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".
Issuer . . . . . . . . . . . . . With respect to each series of
Securities, the trust (referred to
herein as the "Trust" or the
"Issuer") formed or 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 or
a Pooling and Servicing Agreement
(as amended and supplemented from
time to time, the "Pooling and
Servicing Agreement") between the
Trustee and Chrysler Financial
Corporation, as Seller and
Servicer. A Trust may issue on or
more series of Securities.
Seller . . . . . . . . . . . . . Chrysler Financial Corporation
("CFC" or, in its capacity as
seller, the "Seller").
Servicer . . . . . . . . . . . . Chrysler Financial Corporation (in
such capacity, the "Servicer").
Trustee . . . . . . . . . . . . . With respect to each series of
Securities, the Trustee specified
in the related Prospectus
Supplement.
Indenture Trustee . . . . . . . . With respect to any applicable
series of Securities, the
Indenture Trustee specified in
the related Prospectus Supplement.
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"), and may or
may not include any Certificates.
The related Prospectus Supplement
will specify which class or
classes, if any, of Notes of the
related series are being offered
thereby. If a Trust issues more
than one series of Notes, the
Notes of a series will be secured
solely by the Series Trust
Property allocated to such series
and will not have any rights in or
claims on, or receive any payments
from, the Series Trust Property
allocated to any other series of
Securities issued by such Trust.
Unless otherwise specified in the
related Prospectus Supplement,
Notes will be available for
purchase in denominations of
$1,000 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 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 allocated to a series
of Notes (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", the
outstanding Notes of such series
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 in
respect of a series 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 of such series 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 of such series 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 or
may not include any Notes. The
related Prospectus Supplement will
specify which class or classes, if
any, of the Certificates are being
offered thereby. A Trust may
issue one or more series of
Certificates with or without
Notes. In such a case,
Certificates of a series will be
supported solely by the Series
Trust Property allocated to such
series and will not have any
rights in or claims on, or receive
any payments from, the Series
Trust Property allocated to any
other series of Securities issued
by such Trust.
Unless otherwise specified in the
related Prospectus Supplement,
Certificates will be available for
purchase in a minimum denomination
of $20,000 and will be available
in book-entry form only. Unless
otherwise specified in the related
Prospectus Supplement,
Certificateholders 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.
If the Servicer exercises its
option to purchase the Receivables
of a Trust allocated to a series
of Securities (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 of such series
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 in
respect of a series will include a
Pre-Funding Account,
Certificateholders of such series
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 of such
series 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. In
addition, the property of a Trust
may include (i) notes and/or
certificates that were issued by a
prior Trust but were not then
offered pursuant to this
Prospectus ("Previously Issued
Securities") and/or (ii) the right
to receive collections in respect
of Receivables owned by one or
more prior Trusts that would
otherwise be released to the
Company. In the case of a Trust
that issues more than one series
of Securities, such property will
be allocated to a single series of
Securities issued by such Trust
(as so allocated, "Series Trust
Property"). Series Trust Property
will support only the single
series of Securities to which it
has been allocated and will not
benefit or result in any payments
on any other series of Securities
issued by the related Trust or any
other Trust.
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 between
CFC, as Seller and 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
between CFC, as Seller and
Servicer, and the Trustee. A
Prospectus 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 relating to
a series will also include amounts
on deposit in certain trust
accounts relating solely to such
series, 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") in
respect of the related series 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.
To the extent provided in the
related Prospectus Supplement, for
a period of time specified in such
Prospectus Supplement (the
"Revolving Period") collections of
principal on the Receivables for
the related series may be applied
to purchase additional Receivables
("Additional Receivables") from
the Seller for such series.
The Receivables arise or will
arise from loans originated by
motor vehicle dealers (the
"Dealers") and purchased by the
Seller, directly or indirectly,
pursuant to agreements with the
Dealers. 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 Agreement, as
applicable, and described herein
and in the related Prospectus
Supplement.
Credit Enhancement, If and to the extent specified in
Cash Flow Enhancement and the related Prospectus Supplement,
Liquidity Arrangements . . . . . 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, overcollateralization,
letters of credit, credit or
liquidity facilities, surety
bonds, guaranteed investment
contracts, swaps (including
without limitation currency
swaps), other interest rate
protection agreements, repurchase
obligations (including without
limitation put options), yield
supplement agreements, liquidity
arrangements, 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, cash
flow enhancement or liquidity
arrangement 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 a series of Securities 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 of such series
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 With respect to each series of
Agreements . . . . . . . . . . . Securities, the Seller will sell
the related Receivables to the
related 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.
CFC will undertake certain
administrative duties under an
Administration Agreement with
respect to any Trust that has
issued Notes.
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 included in each Trust
or Series Trust Property 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 In connection with the sale of
Obligations . . . . . . . . . . . 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 the related
Financed Vehicle after the Closing
Date.
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
Receivable 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 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. In
respect of any such series, each
Noteholder, by the acceptance of a
Note of such series, will agree to
treat such Note as indebtedness,
and each Certificateholder, if the
Certificates are not retained
solely by the Seller or an
affiliate thereof, 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 tax
purposes. Alternative character-
izations 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, the Notes of any series
and any Certificates issued by a
Trust that is a grantor trust and
are not subordinated to any other
class of Certificates will be
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.
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.
A case decided by the United States Court of Appeals for the Tenth
Circuit contains language to the effect that accounts sold by an entity that
subsequently became bankrupt remained property of the debtor's bankruptcy
estate because the sale of accounts is treated as a "security interest" that
must be perfected under the Uniform Commercial Code ("UCC"). Although the
Contracts constitute chattel paper rather than accounts under the UCC, sale
of chattel paper, like sales of accounts, must be perfected under Article 9
of the UCC. If CFC were to become a debtor under any insolvency law and a
court were to follow the reasoning of the Tenth Circuit Court of Appeals and
apply such reasoning to chattel paper, the Owner Trust (and thus the
Indenture Trustee) or the Grantor Trust (and thus the Trustee), as
applicable, could experience a delay in or reduction of collections on the
Contracts, and the Noteholders and/or the Certificateholders could incur a
loss on their investment as a result.
With respect to each Trust that is not a grantor trust, if the related
Prospectus Supplement so specifies, upon the occurrence of an Insolvency
Event with respect to the Company (which, unless otherwise specified in the
related Prospectus Supplement, will be a wholly-owned subsidiary of the
Seller or a limited liability company of which the Seller and/or one or more
of its wholly-owned subsidiaries are members, 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 related Collection Account of such Trust. If
the proceeds from the liquidation of the Receivables and any amounts on
deposit in the related Reserve Account, the related Note Distribution
Account, if any, and the related Certificate Distribution Account, if
any, with respect to any such Trust and any amounts available from any
credit enhancement are not sufficient to pay the Notes, if any, and the
Certificates, if any, of each related series in full, the amount of
principal returned to any Noteholders or the Certificateholders of each
series of such Trust 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 and its Affiliates. None of CFC,
Chrysler Corporation ("Chrysler") or any of 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
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 CFC were to cease acting as
Servicer, delays in processing payments on the Receivables and information in
respect thereof could occur and result in delays in payments to the
Securityholders.
The related Prospectus Supplement may set forth certain additional
information regarding CFC and Chrysler. In addition, CFC 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 CFC 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 Notes and/or Certificates of a series may be subordinated in
priority of payment to interest and principal due on one or more classes of
Notes of such series, and distributions of interest and principal on one or
more classes of Certificates may be subordinated in priority of payment to
interest and principal due on the Notes, if any, and 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 CFC, the applicable Trustee, any
Indenture Trustee or any other person or entity. Moreover, in the case of a
Trust that issues more than one series of Securities, the Securities of a
series issued by such Trust will be supported solely by the Series Trust
Property allocated to such series and will not have any rights in or claim
on, or receive any payments from, the Series Trust Property allocated to any
other series of Securities issued by such Trust. Consequently, holders of
the Securities of any series must rely for repayment upon payments on solely
the Receivables allocated to such series 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 for such series, 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, 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 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
Receivables Pool and "-- Insolvency Event" regarding the possible sale (if
provided for in the related Prospectus Supplement) of the Receivables
owned by a Trust that is not a grantor trust if an Insolvency Event with
respect to the applicable Company occurs.
Issuance in Series. A single Trust may issue more than one series of
Notes and/or Certificates. The provisions of the Indenture for a series of
Notes or the supplement to a Trust Agreement for a series of Certificates
issued by a Trust will not be subject to the consent of prior review by the
holders of a series of Notes and/or Certificates that have been previously
issued by such Trust. However, the issuance of a subsequent series of
Securities by the same Trust will be subject to the condition that each
Rating Agency that rated a prior series of Securities issued by such Trust
must indicate that the issuance of such subsequent series of Securities will
not cause such Rating Agency to reduce or withdraw its rating of any such
prior series of Securities. There can be no assurance, however, that the
issuance of a subsequent series of Securities by a Trust will not have some
effect on a prior series of Securities issued by such Trust.
Risk of Commingling. With respect to each series of Securities, 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 for such series within two business days
of receipt thereof. However, in the event that CFC 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 CFC 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 for
such series 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,
if any, 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, if any, 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 a series of Securities will be initially
represented by one or more certificates registered in the name of Cede & Co.
("Cede"), or any other nominee for DTC set forth in the related Prospectus
Supplement (Cede, or such other nominee, "DTC's Nominee"), 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".
THE TRUSTS
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 allocated to a series of Securities issued by such
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 CFC, directly or
indirectly, pursuant to agreements with Dealers ("Dealer Agreements"). Such
Receivables will continue to be serviced by the Servicer and evidence
indirect financing made available by the Seller to the Obligors. On the
applicable Closing Date, after the issuance of the Securities of a series,
the Seller will sell the Initial Receivables of the applicable Receivables
Pool to the Trust to the extent, if any, specified in the related Prospectus
Supplement. To the extent so provided in the related Prospectus Supplement,
Subsequent Receivables allocable to such series of Securities will be
conveyed to the Trust as frequently as daily during the Funding Period and
Additional Receivables allocable to such series of Securities may be conveyed
to the Trust during the Revolving Period. Any Subsequent Receivables or
Additional Receivables so conveyed will also be assets of the applicable
Trust allocated solely to such series of Securities, subject to the prior
rights of the related Indenture Trustee and the related Noteholders, if any,
therein. The property of each Trust allocated to a series of Securities
issued by such Trust will also include (i) such amounts as from time to time
may be held in separate trust accounts established and maintained pursuant to
the related Sale and Servicing Agreement or Pooling and Servicing Agreement
and the proceeds of such accounts, as described herein and in the related
Prospectus Supplement; (ii) security interests in the Financed Vehicles and
any other interest of the Seller in such Financed Vehicles; (iii) the rights
to proceeds from claims on certain physical damage, credit life and
disability insurance policies covering the Financed Vehicles or the Obligors,
as the case may be; (iv) the interest of the Seller in any proceeds from
recourse to Dealers on Receivables or Financed Vehicles with respect to which
the Servicer has determined that eventual repayment in full is unlikely; (v)
any property that shall have secured a Receivable and that shall have been
acquired by the applicable Trust; and (vi) any and all proceeds of the
foregoing (as allocated to such series of Securities and together the
Receivables Pool allocated to such series and payments thereon, the "Series
Trust Property"). To the extent specified in the related Prospectus
Supplement, a Pre-Funding Account, a Reserve Account or other form of credit
enhancement or Previously Issued Securities may be a part of the property of
the Series Trust Property in a Trust or may be held by the Trustee or an
Indenture Trustee for the benefit of holders of the related Securities. If a
Trust issues more than one series of Securities, the Securities of a series
will be supported solely by the Series Trust Property allocated to such
series and will not have any rights in or claim on, or receive any payments
from, the Series Trust Property allocated to any other series of Securities
issued by such Trust. Additionally, pursuant to contracts between the Seller
and the Dealers, the Dealers have an obligation after origination to
repurchase Receivables as to which Dealers have made certain
misrepresentations.
The Servicer will continue to service the Receivables held by each Trust
and will receive fees for such services. See "Description of the Transfer and
Servicing Agreements -- Servicing Compensation and Payment of Expenses"
herein and in the related Prospectus Supplement. To facilitate the servicing
of the Receivables, each Trustee will authorize the Servicer to retain
physical possession of the Receivables held by each Trust and other documents
relating thereto as custodian for each such Trust. 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 series by the
subordination of the related Certificates, if any, and by the Reserve
Account, if any, or other credit enhancement for such series or the
protection provided to the related Certificateholders by any such Reserve
Account or other credit enhancement is insufficient, such Noteholders or
Certificateholders, as the case may be, would have to look principally to the
Obligors on the Receivables in the related Series Trust Property, the
proceeds from the repossession and sale of Financed Vehicles which secure
defaulted Receivables in the related Series Trust Property 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 such
Receivables, and thus may reduce the proceeds to be distributed to the
holders of the Securities of such series. See "Description of the Transfer
and Servicing Agreements -- Distributions", "-- Credit and Cash Flow
Enhancement" and "Certain Legal Aspects of the Receivables".
The principal offices of each Trust and the related Trustee will be
specified in the applicable Prospectus Supplement.
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale
of the related Securities is limited solely to the express obligations of
such Trustee set forth in the related Trust Agreement and the Sale and
Servicing Agreement or the related Pooling and Servicing Agreement, as
applicable. A Trustee may resign at any time, in which event the Servicer, or
its successor, will be obligated to appoint a successor trustee. The
Administrator of a Trust that is not a grantor trust and the Servicer in
respect of a Trust that is a grantor trust may also remove the Trustee if the
Trustee ceases to be eligible to continue as Trustee under the related Trust
Agreement or Pooling and Servicing Agreement, as applicable, or if the
Trustee becomes insolvent. In such circumstances, the Administrator or
Servicer, as applicable, will be obligated to appoint a successor trustee.
Any resignation or removal of a Trustee 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 Seller, directly or indirectly, 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 Seller 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 Receivables to be held by a Trust and allocated to a series of
Securities will be selected from the Seller's portfolio for inclusion in the
related Receivables Pool by several criteria, including that, unless
otherwise provided in the related Prospectus Supplement, each Receivable (i)
is secured by a new or used vehicle, (ii) was originated in the United
States, (iii) provides for level monthly payments (except for the last
payment, which may be minimally different from the level payments or which,
in the case of Fixed Value Receivables, may be a final fixed value payment)
that fully amortize the amount financed over its original term to maturity,
(iv) is a Precomputed Receivable or a Simple Interest Receivable and (v)
satisfies the other criteria, if any, set forth in the related Prospectus
Supplement. No selection procedures believed by the Seller to be adverse to
the Securityholders of any series were or will be used in selecting the
related Receivables.
"Precomputed Receivables" consist of either (i) monthly actuarial
receivables ("Actuarial Receivables") or (ii) receivables that provide for
allocation of payments according to the "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 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 CFC'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 CFC provided certain conditions are
satisfied or (iii) refinancing the fixed value payment in accordance with
certain conditions. With respect to Fixed Value Receivables, unless otherwise
provided in the related Prospectus Supplement, only the principal and
interest payments due prior to the final fixed value payment and not the
final fixed value payment will be included in such Trust; the final fixed
value payment will be sold by the Seller to the applicable Company. However,
in the case of a Trust that is not a grantor trust, such Company will have
the option to transfer the final fixed value payments with respect to the
related Fixed Value Receivables retained by such Company to such Trust and to
cause such Trust to issue certificates representing interests in such final
fixed value payments or indebtedness secured by such final fixed value
payments.
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed 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 and any finance
charges up to the date of final payment.
In the event of the prepayment in full (voluntarily or by acceleration)
of a Rule of 78's Receivable, under the terms of the contract, a "refund" or
"rebate" will be made to the obligor of the portion of the total amount of
payments then due and payable under the contract allocable to "unearned"
add-on interest, calculated in accordance with a method equivalent to the
Rule of 78's. If an Actuarial Receivable is prepaid in full, with minor
variations based upon state law, the Actuarial Receivable requires that the
rebate be calculated on the basis of a constant interest rate. If a Simple
Interest Receivable is prepaid, rather than receive a rebate, the obligor is
required to pay interest only to the date of prepayment. The amount of a
rebate under a Rule of 78's Receivable generally will be less than the amount
of a rebate on an Actuarial Receivable and generally will be less than the
remaining scheduled payments of interest that would have been due under a
Simple Interest Receivable for which all payments were made on schedule.
Unless otherwise provided in the related Prospectus Supplement, each
Trust will account for the Rule of 78's Receivables as if such Receivables
were Actuarial Receivables. Amounts received upon prepayment in full of a
Rule of 78's Receivable in excess of the then outstanding principal balance
of such Receivable and accrued interest thereon (calculated pursuant to the
actuarial method) will not be paid to the Noteholders or passed through to
the Certificateholders of the applicable series but will be paid to the
Servicer as additional servicing compensation.
Information with respect to each Receivables Pool will be set forth in
the related Prospectus Supplement, including, to the extent appropriate, the
composition, the distribution by APR and by the states of origination, the
portion of such Receivables Pool consisting of Precomputed Receivables and of
Simple Interest Receivables and the portion of such Receivables Pool secured
by new vehicles and by used vehicles.
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 CFC continues to
service) will be set forth in each Prospectus Supplement. There can be no
assurance that the delinquency, repossession and net loss experience on any
Receivables Pool will be comparable to prior experience or to such
information.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of the Notes, if any, and the Certificates, if
any, 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 Trust pursuant to the related Sale
and Servicing Agreement or Pooling and Servicing Agreement as a result of
breaches of representations and warranties and the Servicer will be obligated
to purchase Receivables from such Trust pursuant to such Sale and Servicing
Agreement or Pooling and Servicing Agreement as a result of breaches of
certain covenants. See "Description of the Transfer and Servicing Agreements
- -- Sale and Assignment of Receivables" and "-- Servicing Procedures". See
also "Description of the Transfer and Servicing Agreements -- Termination"
regarding the Servicer's option to purchase the Receivables from a Trust and
"-- Insolvency Event" regarding the possible sale (if provided for in the
related Prospectus Supplement) of the Receivables owned by a Trust that is
not a grantor trust if an Insolvency Event with respect to the Company
applicable to such Trust occurs.
In addition, a Prospectus Supplement may provide for a Revolving Period
during which principal collections in respect of the Receivables allocated to
the related series will be applied to purchase Additional Receivables for
inclusion in the related Series Trust Property rather than applied to make
distributions on the related Securities. Any such application would increase
the weighted average life of such Securities. Moreover, a Prospectus
Supplement may provide for a liquidity facility or similar arrangement under
which collections of principal may be invested in certain Eligible
Investments and distributed on the related Securities in planned amounts on
scheduled Distribution Dates.
In light of the above considerations, there can be no assurance as to
the amount of principal payments to be made on the Notes, if any, or the
Certificates, if any, of a given series on each Payment Date or Distribution
Date, as applicable, since such amount will depend, in part, on the amount of
principal collected on the related Receivables Pool during the applicable
Collection Period. Any reinvestment risks resulting from a faster or slower
incidence of prepayment of Receivables will be borne entirely by the
Noteholders, if any, and the Certificateholders, if any, of a given series.
The related Prospectus Supplement may set forth certain additional
information with respect to the maturity and prepayment considerations
applicable to the particular Receivables Pool and the related series of
Securities.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit
decimal which the Servicer will compute prior to each distribution with
respect to such class of Notes indicating the remaining outstanding principal
balance of such class of Notes, as of the applicable Payment Date (after
giving effect to payments to be made on such Payment Date), as a fraction of
the initial outstanding principal balance of such class of Notes. The
"Certificate Pool Factor" for each class of Certificates will be a
seven-digit decimal which the Servicer will compute prior to each
distribution with respect to such class of Certificates indicating the
remaining Certificate Balance of such class of Certificates, as of the
applicable Distribution Date (after giving effect to distributions to be made
on such Distribution Date), as a fraction of the initial Certificate Balance
of such class of Certificates. Each Note Pool Factor and each Certificate
Pool Factor will initially be 1.0000000 and thereafter will decline to
reflect reductions in the outstanding principal balance of the applicable
class of Notes, or the reduction of the Certificate Balance of the applicable
class of Certificates, as the case may be. A Noteholder's portion of the
aggregate outstanding principal balance of the related class of Notes is the
product of (i) the original denomination of such Noteholder's Note and (ii)
the applicable Note Pool Factor. A Certificateholder's portion of the
aggregate outstanding Certificate Balance for the related class of
Certificates is the product of (a) the original denomination of such
Certificateholder's Certificate and (b) the applicable Certificate Pool
Factor.
Unless otherwise provided in the related Prospectus Supplement with
respect to a series, the Noteholders, if any, and the Certificateholders, if
any, of such series will receive reports on or about each Payment Date
concerning with respect to the Collection Period immediately preceding such
Payment Date, payments received on the related Receivables, the related 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. In addition,
Securityholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date
permitted by law. See "Certain Information Regarding the Securities --
Reports to Securityholders".
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Securities of a series will be applied by the
applicable Trust (i) to the purchase of the Receivables and, if applicable,
any Previously Issued Securities from the Seller, (ii) to make the initial
deposit into the Reserve Account, if any, and (iii) to make the deposit of
the Pre-Funded Amount into the Pre-Funding Account, if any. Unless otherwise
specified in the related Prospectus Supplement, the Seller will use that
portion of such net proceeds paid to it with respect to such series of
Securities for general corporate purposes.
CHRYSLER FINANCIAL CORPORATION
CFC is a financial services organization, all of the common stock of
which is owned by Chrysler. CFC, 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. CFC 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. CFC's business is
substantially dependent upon the operations of Chrysler. In particular, lower
levels of production and sale of Chrysler's automotive products could result
in a reduction in the level of finance and insurance operations of CFC. See
"Special Considerations -- Trust's Relationship to the Seller; Financial
Condition of Chrysler Corporation" in the related Prospectus Supplement. The
related Prospectus Supplement will set forth certain additional information
with respect to CFC. CFC's executive offices are located at 27777 Franklin
Road, Southfield, Michigan 48034-8286, and its telephone number is (248)
948-3058.
CFC will warrant to each Trust in the related Sale and Servicing
Agreement or Pooling and Servicing Agreement that the sale of the applicable
Receivables by CFC to such Trust is a valid sale of such Receivables to such
Trust. In addition, CFC and such Trust will treat the transactions described
herein and in the related Prospectus Supplement as a sale of such Receivables
to such Trust and CFC will take all actions that are required to perfect the
Trust's ownership interest in such Receivables. Notwithstanding the
foregoing, if CFC were to become a debtor in a bankruptcy case and a creditor
or trustee in bankruptcy of such debtor or such debtor itself were to take
the position that the 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 CFC arising before the transfer of
Receivables to such Trust may have priority over such Trust's interest in
such Receivables. If the transactions contemplated herein are treated as a
sale, the Receivables would not be part of CFC's bankruptcy estate and would
not be available to CFC's creditors.
On December 31, 1995, Chrysler Credit Corporation ("CCC"), which had
been a wholly owned subsidiary of CFC and had provided retail, wholesale and
lease financing services to automobile dealers and their customers throughout
the United States and had originated and serviced CFC's motor vehicle loan
portfolio, was merged into CFC.
DESCRIPTION OF THE NOTES
GENERAL
With respect to each Trust that issues Notes, one or more classes of
Notes of the related series will be issued pursuant to the terms of an
Indenture, the forms of which have been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Notes and the
Indenture.
If a Trust issues more than one series of Notes, each such series may be
issued pursuant to a master Indenture. In such a case, the Notes of a series
will be secured solely by the Series Trust Property allocated to such series
and will not have any rights in or claims on, or receive any payments from,
the Series Trust Property allocated to any other series of Securities issued
by such Trust.
Unless otherwise specified in the related Prospectus Supplement, each
class of Notes will initially be represented by one or more Notes, in each
case registered in the name of the nominee of DTC (together with any
successor depository selected by the Trust, the "Depository") except as set
forth below. Unless otherwise specified in the related Prospectus Supplement,
the Notes will be available for purchase in denominations of $1,000 in
book-entry form only. The Seller has been informed by DTC that DTC's nominee
will be Cede, unless another nominee is specified in the related Prospectus
Supplement. Accordingly, such nominee is expected to be the holder of record
of the Notes of each class. Unless and until Definitive Notes are issued
under the limited circumstances described herein or in the related Prospectus
Supplement, no Noteholder will be entitled to receive a physical certificate
representing a Note. All references herein and in the related Prospectus
Supplement to actions by Noteholders refer to actions taken by DTC upon
instructions from its participating organizations (the "Participants") and
all references herein and in the related Prospectus Supplement to
distributions, notices, reports and statements to Noteholders refer to
distributions, notices, reports and statements to DTC or its nominee, as the
registered holder of the Notes, for distribution to Noteholders in
accordance with DTC's procedures with respect thereto. See "Certain
Information Regarding the Securities -- Book-Entry Registration" and "--
Definitive Securities".
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
Interest Rate and amount of or method of determining payments of principal
and interest with respect to each class of Notes of a series will be
described in the related Prospectus Supplement. The right of holders of any
class of Notes of a series to receive payments of principal and interest may
be senior or subordinate to the rights of holders of any other class or
classes of Notes of such series, as described in the related Prospectus
Supplement. Unless otherwise provided in the related Prospectus Supplement,
payments of interest on the Notes of such series will be made prior to
payments of principal thereon. To the extent provided in the related
Prospectus Supplement, a series may include one or more classes of Strip
Notes entitled to (i) principal payments with disproportionate, nominal or no
interest payments or (ii) interest payments with disproportionate, nominal or
no principal payments. Each class of Notes may have a different Interest
Rate, which may be a fixed, variable or adjustable Interest Rate (and which
may be zero for certain classes of Strip Notes), or any combination of the
foregoing. The related Prospectus Supplement will specify the Interest Rate
for each class of Notes of a series or the method for determining such
Interest Rate. See also "Certain Information Regarding the Securities --
Fixed Rate Securities" and "-- Floating Rate Securities". One or more classes
of Notes of a series may be redeemable in whole or in part under the
circumstances specified in the related Prospectus Supplement, including at
the end of the Funding Period (if any) or as a result of the Servicer's
exercising its option to purchase the related Receivables Pool.
To the extent specified in any Prospectus Supplement, one or more
classes of Notes of a given series may have fixed principal payment
schedules, as set forth in such Prospectus Supplement; Noteholders of such
Notes would be entitled to receive as payments of principal on any given
Payment Date the applicable amounts set forth on such schedule with respect
to such Notes, in the manner and to the extent set forth in the related
Prospectus Supplement. The aggregate initial principal amount of the Notes
and Certificates, if any, of a series may, after giving effect to the
purchase of all Subsequent Receivables, if any, be greater than the aggregate
initial principal balance of the Receivables in that series.
To the extent specified in the related Prospectus Supplement, payments
to Noteholders of two or more classes within a series in respect of interest
may have the same priority. Under certain circumstances, the amount available
for such payments could be less than the amount of interest payable on such
Notes on any of the dates specified for payments in the related Prospectus
Supplement (each, a "Payment Date", which may be the same date as each
Distribution Date as specified in the related Prospectus Supplement), in
which case the holders of such classes of Notes will receive its ratable
share (based upon the aggregate amount of interest due to such classes of
Noteholders) of the aggregate amount available to be distributed in respect
of interest on such Notes. See "Description of the Transfer and Servicing
Agreements -- Distributions" and "-- Credit and Cash Flow Enhancement".
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal
and interest, and any schedule or formula or other provisions applicable to
the determination thereof, of each such class will be set forth in the
related Prospectus Supplement. Payments in respect of principal and interest
of any class of Notes will be made on a pro rata basis among all the
Noteholders of such class. A series with Notes may provide for a Revolving
Period, during which collections of principal in respect of the Receivables
are not applied to payments of principal of such Notes, or may provide for a
liquidity facility of similar arrangement that permits one or more classes of
Notes to be paid in planned amounts on scheduled Distribution Dates.
THE INDENTURE
Master Indenture. If a Trust issues more than one series of Notes, such
a series may be issued pursuant to a base indenture and a series supplement
thereto that relates to such series of Notes (such base indenture together
with such series supplement being also referred to herein as an "Indenture").
Modification of Indenture. With respect to each Trust that has issued
Notes pursuant to an Indenture, the Trust and the Indenture Trustee may, with
the consent of the holders of a majority of the outstanding Notes of the
related series, execute a supplemental indenture to add provisions to, change
in any manner or eliminate any provisions of, the related Indenture, or
modify (except as provided below) in any manner the rights of the related
Noteholders.
Unless otherwise specified in the related Prospectus Supplement with
respect to a series of Notes, without the consent of the holder of each such
outstanding Note affected thereby. However, no supplemental indenture will:
(i) change the due date of any installment of principal of or interest on any
such Note or reduce the principal amount thereof, the interest rate specified
thereon or the redemption price with respect thereto or change any place of
payment where or the coin or currency in which any such Note or any interest
thereon is payable; (ii) impair the right to institute suit for the
enforcement of certain provisions of the related Indenture regarding payment;
(iii) reduce the percentage of the aggregate amount of the outstanding Notes
of such series, the consent of the holders of which is required for any such
supplemental indenture or the consent of the holders of which is required for
any waiver of compliance with certain provisions of the related Indenture or
of certain defaults thereunder and their consequences as provided for in such
Indenture; (iv) modify or alter the provisions of the related Indenture
regarding the voting of Notes held by the applicable Trust, any other obligor
on such Notes, the Seller or an affiliate of any of them; (v) reduce the
percentage of the aggregate outstanding amount of such Notes, the consent of
the holders of which is required to direct the related Indenture Trustee to
sell or liquidate the Receivables allocated to such series if the proceeds of
such sale would be insufficient to pay the principal amount and accrued but
unpaid interest on the outstanding Notes of such series; (vi) decrease the
percentage of the aggregate principal amount of such Notes required to amend
the sections of the related Indenture which specify the applicable percentage
of aggregate principal amount of the Notes of such series necessary to amend
such Indenture or certain other related agreements; or (vii) permit the
creation of any lien ranking prior to or on a parity with the lien of the
related Indenture with respect to any of the Series Trust Property securing
such Notes or, except as otherwise permitted or contemplated in such
Indenture, terminate the lien of such Indenture on any such collateral or
deprive the holder of any such Note of the security afforded by the lien of
such Indenture.
Unless otherwise provided in the applicable Prospectus Supplement, the
Trust and the applicable Indenture Trustee may also enter into supplemental
indentures, without obtaining the consent of the Noteholders of the related
series, for the purpose of, among other things, adding any provisions to or
changing in any manner or eliminating any of the provisions of the related
Indenture or of modifying in any manner the rights of such Noteholders;
provided that such action will not materially and adversely affect the
interest of any such Noteholder.
Events of Default; Rights upon Event of Default. With respect to the
Notes of a series, unless otherwise specified in the related Prospectus
Supplement, "Events of Default" under the related Indenture will consist of:
(i) a default for five days (or for such other longer period specified in the
related Prospectus Supplement) or more in the payment of any interest on any
such Note; (ii) a default in the payment of the principal of or any
installment of the principal of any such Note when the same becomes due and
payable; (iii) a default in the observance or performance of any covenant or
agreement of the applicable Trust made in the related Indenture and the
continuation of any such default for a period of 30 days after notice thereof
is given to such Trust by the applicable Indenture Trustee or to such Trust
and such Indenture Trustee by the holders of at least 25% in principal amount
of such Notes then outstanding; (iv) any representation or warranty made by
such Trust in the related Indenture or in any certificate delivered pursuant
thereto or in connection therewith having been incorrect in a material
respect as of the time made, and such breach not having been cured within 30
days after notice thereof is given to such Trust by the applicable Indenture
Trustee or to such Trust and such Indenture Trustee by the holders of at
least 25% in principal amount of such Notes then outstanding; or (v) certain
events of bankruptcy, insolvency, receivership or liquidation of the
applicable Trust. The amount of principal required to be paid to Noteholders
of such series under the related Indenture will generally be limited to
amounts available to be deposited in the applicable Note Distribution
Account. Therefore, unless otherwise specified in the related Prospectus
Supplement, the failure to pay principal on a class of Notes generally will
not result in the occurrence of an Event of Default until the final scheduled
Payment Date for such class of Notes.
In the case of a Trust that issues more than one series of Notes, an
Event of Default with respect to one such series of Notes will not of itself
constitute an Event of Default with respect to any such other series of
Notes.
If an Event of Default 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 Series Trust Property
allocated to such series, exercise remedies as a secured party, sell the
Receivables included in such Series Trust Property or elect to have the
applicable Trust maintain possession of such Receivables and continue to
apply collections on such Receivables as if there had been no declaration of
acceleration. Unless otherwise specified in the related Prospectus
Supplement, however, such Indenture Trustee is prohibited from selling the
related Receivables following an Event of Default, other than a default in
the payment of any principal of or a default for five days (or such longer
period specified in the related Indenture) or more in the payment of any
interest on any Note of such series, unless (i) the holders of all the
outstanding Notes of such series consent to such sale, (ii) the proceeds of
such sale are sufficient to pay in full the principal of and the accrued
interest on such outstanding Notes at the date of such sale or (iii) such
Indenture Trustee determines that the proceeds of such Receivables would not
be sufficient on an ongoing basis to make all payments on such Notes as such
payments would have become due if such obligations had not been declared due
and payable, and such Indenture Trustee obtains the consent of the holders of
66 2/3% of the aggregate outstanding amount of such Notes.
If a Trust issues more than one series of Notes, each such series of
Notes will be secured solely by the Series Trust Property allocated to such
series and will not have any rights in or claims on, or receive any payments
from, the Series Trust Property allocated to any other series of Securities
issued by such Trust.
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
series will have the right to direct the time, method and place of conducting
any proceeding or any remedy available to the applicable Indenture Trustee in
respect of such series, and the holders of a majority in principal amount of
such Notes then outstanding may, in certain cases, waive any default with
respect to such Notes, except a default in the payment of principal or
interest or a default in respect of a covenant or provision of such Indenture
that cannot be modified without the waiver or consent of all the holders of
such outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no
holder of a Note of any series will have the right to institute any
proceeding with respect to the related Indenture, unless (i) such holder
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 holders of a series of
Notes, by accepting such Notes, will covenant, to the extent legally
enforceable, that they will not at any time institute against the applicable
Trust any bankruptcy, reorganization or other proceeding under any federal or
state bankruptcy or similar law and that they do not have and will not assert
any claims against any Series Trust Property allocated to any other series of
Notes issued by such Trust.
With respect to any series of Notes issued by a Trust, neither the
related Indenture Trustee nor the related Trustee in its individual capacity,
nor any holder of a Certificate representing an ownership interest in such
Trust nor any of their respective owners, beneficiaries, agents, officers,
directors, employees, affiliates, successors or assigns will, in the absence
of an express agreement to the contrary, be personally liable for the payment
of the principal of or interest on such Notes or for the agreements of such
Trust contained in the applicable Indenture.
Certain Covenants. Each Indenture will provide that the related Trust
may not consolidate with or merge into any other entity, unless (i) the
entity formed by or surviving such consolidation or merger is organized under
the laws of the United States, any state or the District of Columbia, (ii)
such entity expressly assumes such Trust's obligation to make due and
punctual payments upon the Notes of the related series and the performance or
observance of every agreement and covenant of such Trust under the Indenture,
(iii) no Event of Default shall have occurred and be continuing immediately
after such merger or consolidation, (iv) such Trust has been advised that
the rating of the Notes or the Certificates of such series then in effect
would not be reduced or withdrawn by the Rating Agencies as a result of such
merger or consolidation and (v) such Trust has received an opinion of counsel
to the effect that such consolidation or merger would have no material
adverse federal income tax consequence to the Trust or to any related
Noteholder or Certificateholder.
With respect to each series of Notes issued by a Trust, such Trust will
not, among other things, (i) except as expressly permitted by the applicable
Indenture, the applicable Transfer and Servicing Agreements or certain
related documents with respect to such Trust and such series (collectively,
the "Related Documents"), sell, transfer, exchange or otherwise dispose of
any of the Series Trust Property allocated to such series, (ii) claim any
credit on or make any deduction from the principal and interest payable in
respect of the Notes of such series (other than amounts withheld under the
Code or applicable state law) or assert any claim against any present or
former holder of such Notes because of the payment of taxes levied or
assessed upon such Trust, (iii) dissolve or liquidate in whole or in part,
(iv) permit the validity or effectiveness of the related Indenture to be
impaired or permit any person to be released from any covenants or
obligations with respect to such Notes under such Indenture except as may be
expressly permitted thereby or (v) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance to be created on or extend
to or otherwise arise upon or burden such Series Trust Property or any part
thereof, or any interest therein or the proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust". No Trust
will incur, assume or guarantee any indebtedness other than indebtedness
incurred pursuant to one or more series of Notes issued by it and the related
Indentures, pursuant to any Advances made to it by the Servicer or otherwise
in accordance with the Related Documents.
Annual Compliance Statement. Each Trust will be required to file
annually with the related Indenture Trustee a written statement as to the
fulfillment of its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee for each
series of Notes will be required to mail each year to all related Noteholders
a brief report relating to its eligibility and qualification to continue as
Indenture Trustee under the related Indenture, any amounts advanced by it
under the Indenture, the amount, interest rate and maturity date of certain
indebtedness owing by the related Trust to the applicable Indenture Trustee
in its individual capacity, the property and funds physically held by such
Indenture Trustee as such and any action taken by it that materially affects
the related Notes and that has not been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be
discharged with respect to the Series Trust Property securing the related
Notes upon the delivery to the related Indenture Trustee for cancellation of
all such Notes or, with certain limitations, upon deposit with such Indenture
Trustee of funds sufficient for the payment in full of all such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the
related Prospectus Supplement. The Indenture Trustee for any series may
resign at any time, in which event the Issuer will be obligated to appoint a
successor trustee for such series. The Issuer may also remove any such
Indenture Trustee if such Indenture Trustee ceases to be eligible to continue
as such under the related Indenture or if such Indenture Trustee becomes
insolvent. In such circumstances, the Issuer will be obligated to appoint a
successor trustee for the applicable series of Notes. Any resignation or
removal of the Indenture Trustee 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, if so specified in the related Prospectus
Supplement, one or more classes of Certificates of the related series will be
issued pursuant to the terms of a Trust Agreement or a Pooling and Servicing
Agreement, a form of each of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Certificates and
the Trust Agreement or Pooling and Servicing Agreement, as applicable.
Unless otherwise specified in the related Prospectus Supplement and
except for the Certificates, if any, of a series purchased by the applicable
Company, each class of Certificates will initially be represented by one or
more Certificates registered in the name of the Depository, except as set
forth below. Unless otherwise specified in the related Prospectus Supplement
and except for the Certificates, if any, of a given series purchased by the
applicable Company, the Certificates will be available for purchase in
minimum denominations of $20,000 in book-entry form only. The Seller has been
informed by DTC that DTC's nominee will be Cede, unless another nominee is
specified in the related Prospectus Supplement. Accordingly, such nominee is
expected to be the holder of record of the Certificates of any series that
are not purchased by the related Company. Unless and until Definitive
Certificates are issued under the limited circumstances described herein or
in the related Prospectus Supplement, no Certificateholder (other than the
applicable Company) will be entitled to receive a physical certificate
representing a Certificate. All references herein and in the related
Prospectus Supplement to actions by Certificateholders refer to actions taken
by DTC upon instructions from the Participants and all references herein and
in the related Prospectus Supplement to distributions, notices, reports and
statements to Certificateholders refer to distributions, notices, reports and
statements to DTC or its nominee, as the case may be, as the registered
holder of the Certificates, for distribution to Certificateholders in
accordance with DTC's procedures with respect thereto. See "Certain
Information Regarding the Securities -- Book-Entry Registration" and " --
Definitive Securities". Any Certificates of a given series owned by the
applicable Company or its affiliates will be entitled to equal and
proportionate benefits under the applicable Trust Agreement, except that such
Certificates will be deemed not to be outstanding for the purpose of
determining whether the requisite percentage of Certificateholders have given
any request, demand, authorization, direction, notice, consent or other
action under the Related Documents (other than the commencement by the
related Trust of a voluntary proceeding in bankruptcy as described under
"Description of the Transfer and Servicing Agreements -- Insolvency Event").
If a Trust issues more than one series of Certificates, Certificates of
a series will be supported solely by the Series Trust Property allocated to
such series and will not have any rights in or claims on, or receive any
payments from, the Series Trust Property allocated to any other series of
Securities issued by such Trust.
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of
losses, Pass Through Rate and amount of or method of determining
distributions with respect to principal and interest of each class of
Certificates will be described in the related Prospectus Supplement.
Distributions of interest on such Certificates will be made on the dates
specified in the related Prospectus Supplement (each, a "Distribution Date")
and will be made prior to distributions with respect to principal of such
Certificates. To the extent provided in the related Prospectus Supplement, a
series may include one or more classes of Strip Certificates entitled to (i)
distributions in respect of principal with disproportionate, nominal or no
interest distributions or (ii) interest distributions with disproportionate,
nominal or no distributions in respect of principal. Each class of
Certificates may have a different Pass Through Rate, which may be a fixed,
variable or adjustable Pass Through Rate (and which may be zero for certain
classes of 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 series or the method for determining such Pass
Through Rate. See also "Certain Information Regarding the Securities -- Fixed
Rate Securities" and "-- Floating Rate Securities". Unless otherwise provided
in the related Prospectus Supplement, distributions in respect of the
Certificates of a series that includes Notes may be subordinate to payments
in respect of the Notes of such series as more fully described in the related
Prospectus Supplement. Distributions in respect of interest on and principal
of any class of Certificates will be made on a pro rata basis among all the
Certificateholders of such class.
In the case of a series of Certificates which includes two or more
classes of Certificates, the timing, sequential order, priority of payment or
amount of distributions in respect of interest and principal, and any
schedule or formula or other provisions applicable to the determination
thereof, of each such class shall be as set forth in the related Prospectus
Supplement. A series with Certificates may provide for a Revolving Period,
during which collections of principal on the Receivables are not applied to
distributions on the related Securities, or may provide for a liquidity
facility or similar arrangement that permits one or more classes of the
related Securities to be paid in planned amounts on scheduled Distribution
Dates. The aggregate initial principal amount of the Certificates and the
Notes, if any, of a series may, after giving effect to the purchase of all
Subsequent Receivables, if any, for such series be greater than the aggregate
initial principal balance of the Receivables in that series.
CERTAIN INFORMATION REGARDING THE SECURITIES
FIXED RATE SECURITIES
Each class of Securities (other than certain classes of Strip Notes or
Strip Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the applicable Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass Through Rate, as the case may be,
specified in the applicable Prospectus Supplement. Unless otherwise set forth
in the applicable Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the basis of a 360-day year 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 "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:
D X 360
Money Market Yield = ------------
X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the specified Index Maturity.
The "Calculation Date" pertaining to any Commercial Paper Rate
Determination Date shall be the first to occur of (a) the tenth calendar day
after such Commercial Paper Rate Determination Date or, if such day is not a
business day, the next succeeding business day or (b) the second business day
preceding the date any payment is required to be made for any period
following the applicable Interest Reset Date.
Federal Funds Rate Securities. Each Federal Funds Rate Security will
bear interest for each Interest Reset Period at the interest rate calculated
with reference to the Federal Funds Rate and the Spread or Spread Multiplier,
if any, specified in such Security and in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective
rate on the Interest Reset Date for such Interest Reset Period (a "Federal
Funds Rate Determination Date") for Federal Funds as published in H.15(519)
under the heading "Federal Funds (Effective)". In the event that such rate is
not published prior to 3:00 p.m., New York City time, on the Calculation Date
(as defined below) pertaining to such Federal Funds Rate Determination Date,
the "Federal Funds Rate" for such Interest Reset Period shall be the rate on
such Federal Funds Rate Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate". If by 3:00 p.m.,
New York City time, on such Calculation Date such rate is not yet published
in either H.15(519) or Composite Quotations, then the "Federal Funds Rate"
for such Interest Reset Period shall be the rate on such Federal Funds Rate
Determination Date made publicly available by the Federal Reserve Bank of New
York which is equivalent to the rate which appears in H.15(519) under the
heading "Federal Funds (Effective)"; provided, however, that if such rate is
not made publicly available by the Federal Reserve Bank of New York by 3:00
p.m., New York City time, on such Calculation Date, the "Federal Funds Rate"
for such Interest Reset Period will be the same as the Federal Funds Rate in
effect for the immediately preceding Interest Reset Period. In the case of a
Federal Funds Rate Security that resets daily, the interest rate on such
Security for the period from and including a Monday to but excluding the
succeeding Monday will be reset by the Calculation Agent for such Security on
such second Monday (or, if not a business day, on the next succeeding
business day) to a rate equal to the average of the Federal Funds Rates in
effect with respect to each such day in such week.
The "Calculation Date" pertaining to any Federal Funds Rate
Determination Date shall be the next succeeding business day.
LIBOR Securities. Each LIBOR Security will bear interest for each
Interest Reset Period at the interest rate calculated with reference to LIBOR
and the Spread or Spread Multiplier, if any, specified in such Security and
in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, with
respect to LIBOR indexed to the offered rates for U.S. dollar deposits,
"LIBOR" for each Interest Reset Period will be determined by the Calculation
Agent for any LIBOR Security as follows:
On the second London Banking Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Security will determine the arithmetic
mean of the offered rates for deposits in U.S. dollars for the period of
the Index Maturity specified in the applicable Prospectus Supplement,
commencing on such Interest Reset Date, which appear on Telerate Page
3750 at approximately 11:00 a.m., London time, on such LIBOR
Determination Date. "Telerate Page 3750" means the display page so
designated on the Dow Jones Telerate Service (or such other page as may
replace that page on that service, or such other service as may be
nominated as the information vendor, for the purpose of displaying
London interbank offered rates of major banks). If such rate appears on
Telerate Page 3750, LIBOR will be such rate. "LIBOR Business Day" as
used herein means a day that is both a Business Day (as defined in the
Indenture or Pooling and Servicing Agreement) and a day on which banking
institutions in the City of London, England are not required or
authorized by law to be closed. If on any LIBOR Determination Date the
offered rate does not appear on Telerate Page 3750, the Calculation
Agent will request each of the reference banks (which shall be major
banks that are engaged in transactions in the London interbank market
selected by the Calculation Agent) to provide the Calculation Agent with
its offered quotation for United States dollar deposits for the period
of the specified Index Maturity to prime banks in the London interbank
market as of 11:00 a.m., London time, on such date. If at least two
reference banks provide the Calculation Agent with such offered
quotations, LIBOR on such date will be the arithmetic mean, rounded
upwards, if necessary, to the nearest 1/100,000 of 1% (.0000001), with
five one-millionths of a percentage point rounded upward, of all such
quotations. If on such date fewer than two of the reference banks
provide the Calculation Agent with such offered quotations, LIBOR on
such date will be the arithmetic mean, rounded upwards, if necessary,
to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of
a percentage point rounded upward, of the offered per annum rates that
one or more leading banks in The City of New York selected by the
Calculation Agent are quoting as of 11:00 a.m., New York City time,
on such date to leading European banks for United States
dollar deposits for the period of the specified Index Maturity;
provided, however, that if such banks are not quoting as described
above, LIBOR for such date will be LIBOR applicable to the Interest
Reset Period immediately preceding such Interest Reset Period.
Treasury Rate Securities. Each Treasury Rate Security will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified in such Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Treasury Rate" for each Interest Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified in the applicable Prospectus
Supplement, as such rate shall be published in H.15(519) under the heading
"U.S. Government Securities -- Treasury bills -- auction average
(investment)" or, in the event that such rate is not published prior to 3:00
p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such Treasury Rate Determination Date, the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on such Treasury Rate Determination
Date as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury bills having the
specified Index Maturity are not published or reported as provided above by
3:00 p.m., New York City time, on such Calculation Date, or if no such
auction is held on such Treasury Rate Determination Date, then the "Treasury
Rate" for such Interest Reset Period shall be calculated by the Calculation
Agent for such Treasury Rate Security and shall be the yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City
time, on such Treasury Rate Determination Date, of three leading primary
United States government securities dealers selected by such Calculation
Agent for the issue of Treasury bills with a remaining maturity closest to
the specified Index Maturity; provided, however, that if the dealers selected
as aforesaid by such Calculation Agent are not quoting bid rates as mentioned
in this sentence, then the "Treasury Rate" for such Interest Reset Period
will be the same as the Treasury Rate for the immediately preceding Interest
Reset Period.
The "Treasury Rate Determination Date" for each Interest Reset Period
will be the day of the week in which the Interest Reset Date for such
Interest Reset Period falls on which Treasury bills would normally be
auctioned. Treasury bills are normally sold at auction on Monday of each
week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held
on the preceding Friday. If, as the result of a legal holiday, an auction is
so held on the preceding Friday, such Friday will be the Treasury Rate
Determination Date pertaining to the Interest Reset Period commencing in the
next succeeding week. If an auction date shall fall on any day that would
otherwise be an Interest Reset Date for a Treasury Rate Security, then such
Interest Reset Date shall instead be the business day immediately following
such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination
Date shall be 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.
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 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.
Cedel Bank, societe anonyme ("CEDEL") is incorporated under the laws of
Luxembourg as a professional depository. CEDEL holds securities for its
participating organizations ("CEDEL Participants") and facilitates the
clearance and settlement of securities transactions between CEDEL
Participants through electronic book-entry changes in accounts of CEDEL
Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in CEDEL in any of 28 currencies,
including United States dollars. CEDEL provides to its CEDEL Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. CEDEL interfaces with domestic markets in several countries. As a
professional depository, CEDEL is subject to regulation by the Luxembourg
Monetary Institute. CEDEL Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations
and may include the Underwriters. Indirect access to CEDEL is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a CEDEL Participant, either
directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need
for physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in
Euroclear in any of 32 currencies, including United States dollars. The
Euroclear System includes various other services, including securities
lending and borrowing, and interfaces with domestic markets in several
countries generally similar to the arrangements for cross-market transfers
with DTC. The Euroclear System is operated by Morgan Guaranty Trust Company
of New York, Brussels, Belgium office (the "Euroclear Operator" or
"Euroclear"), under contract with Euroclear Clearance System, S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by
the Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for the Euroclear System on
behalf of Euroclear Participants. Euroclear Participants include banks
(including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the Underwriters.
Indirect access to the Euroclear System is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within the Euroclear
System, withdrawal of securities and cash from the Euroclear System, and
receipts of payments with respect to securities in the Euroclear System. All
securities in the Euroclear System are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the Terms and Conditions only on
behalf of Euroclear Participants and has no record of or relationship with
persons holding through Euroclear Participants.
Distributions with respect to Securities held through CEDEL or Euroclear
will be credited to the cash accounts of CEDEL Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures,
to the extent received by its Depositary. Such distributions will be subject
to tax reporting in accordance with relevant United States tax laws and
regulations. See "Certain Federal Income Tax Consequences" and "Global
Clearance, Settlement and Tax Documentation Procedures" in Annex I to this
Prospectus. CEDEL or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a Security under the Indenture,
Trust Agreement or Pooling and Servicing Agreement, as applicable, on behalf
of a CEDEL Participant or Euroclear Participant only in accordance with its
relevant rules and procedures and subject to its Depositary's ability to
effect such actions on its behalf through DTC.
Cede, as nominee for DTC, will hold the Securities. CEDEL and Euroclear
will hold omnibus positions in the Securities on behalf of the CEDEL
Participants and the Euroclear Participants, respectively, through customers'
securities accounts in CEDEL's and Euroclear's names on the books of their
respective depositaries (collectively, the "Depositaries"), which in turn
will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC.
Transfers between DTC's participating organizations (the "Participants")
will occur in accordance with DTC rules. Transfers between CEDEL Participants
and Euroclear Participants will occur in the ordinary way in accordance with
their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through CEDEL
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (European time).
The relevant European international clearing system will, if the transaction
meets its settlement requirements, deliver instructions to its Depositary to
take action to effect final settlement on its behalf by delivering or
receiving securities in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC. CEDEL
Participants and Euroclear Participants may not deliver instructions directly
to the Depositaries.
Because of time-zone differences, credits of securities in CEDEL or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing will be reported to the
relevant CEDEL Participant or Euroclear Participant on such business day.
Cash received in CEDEL or Euroclear as a result of sales of securities by or
through a CEDEL Participant or a Euroclear Participant to a Participant will
be received with value on the DTC settlement date but will be available in
the relevant CEDEL or Euroclear cash account only as of the business day
following settlement in DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Securities among participants
of DTC, CEDEL and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued
at any time.
In the event that any of DTC, Cedel or Euroclear should discontinue its
services, the Administrator would seek an alternative depository (if
available) or cause the issuance of Definitive Notes to the owners thereof or
their nominees in the manner described in the Prospectus under "Certain
Information Regarding the Securities -- Definitive Securities".
DEFINITIVE SECURITIES
Unless otherwise specified in the related Prospectus Supplement, the
Notes, if any, and the Certificates of a given series will be issued in fully
registered, certificated form ("Definitive Notes" and "Definitive
Certificates", respectively, and collectively referred to herein as
"Definitive Securities") to Noteholders or Certificateholders or their
respective nominees, rather than to DTC or its nominee, only if (i) the
related Administrator or Trustee, as applicable, determines that DTC is no
longer willing or able to discharge properly its responsibilities as
depository with respect to such Securities and such Administrator or Trustee
is unable to locate a qualified successor (and if it is an Administrator that
has made such determination, such Administrator so notifies the Applicable
Trustee in writing), (ii) the Administrator or Trustee, as applicable, at its
option, elects to terminate the book-entry system through DTC or (iii) after
the occurrence of an Event of Default or a Servicer Default with respect to
such Securities, holders representing at least a majority of the
outstanding principal amount of the Notes or the Certificates, as the
case may be, of such series advise the Applicable Trustee through DTC in
writing that the continuation of a book-entry system through DTC (or a
successor thereto) with respect to such Notes or Certificates is no longer
in the best interest of the holders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Applicable Trustee will be required to notify all applicable
Securityholders of a given series through Participants of the availability of
Definitive Securities. Upon surrender by DTC of the definitive certificates
representing the corresponding Securities and receipt of instructions for
re-registration, the Applicable Trustee will reissue such Securities as
Definitive Securities to such Securityholders.
Distributions of principal of, and interest on, such Definitive
Securities will thereafter be made by the Applicable Trustee in accordance
with the procedures set forth in the related Indenture or the related Trust
Agreement or Pooling and Servicing Agreement, as applicable, directly to
holders of Definitive Securities in whose names the Definitive Securities
were registered at the close of business on the applicable Record Date
specified for such Securities in the related Prospectus Supplement. Such
distributions will be made by check mailed to the address of such holder as
it appears on the register maintained by the Applicable Trustee. The final
payment on any such Definitive Security, however, will be made only upon
presentation and surrender of such Definitive Security at the office or
agency specified in the notice of final distribution to the applicable
Securityholders.
Definitive Securities will be transferable and exchangeable at the
offices of the Applicable Trustee or of a registrar named in a notice
delivered to holders of Definitive Securities. No service charge will be
imposed for any registration of transfer or exchange, but the Applicable
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
LIST OF SECURITYHOLDERS
Unless otherwise specified in the related Prospectus Supplement with
respect to the Notes of any series, three or more holders of the Notes of
such series or one or more holders of such Notes evidencing not less than 25%
of the aggregate outstanding principal balance of such Notes may, by written
request to the related Indenture Trustee, obtain access to the list of all
Noteholders maintained by such Indenture Trustee for the purpose of
communicating with other Noteholders with respect to their rights under the
related Indenture or under such Notes. Such Indenture Trustee may elect not
to afford the requesting Noteholders access to the list of Noteholders if it
agrees to mail the desired communication or proxy, on behalf of and at the
expense of the requesting Noteholders, to all Noteholders of such series.
Unless otherwise specified in the related Prospectus Supplement with
respect to the Certificates of any series, three or more holders of the
Certificates of such series or one or more holders of such Certificates
evidencing not less than 25% of the Certificate Balance of such Certificates
may, by written request to the related Trustee, obtain access to the list of
all Certificateholders maintained by such Trustee for the purpose of
communicating with other Certificateholders with respect to their rights
under the related Trust Agreement or Pooling and Servicing Agreement or under
such Certificates.
REPORTS TO SECURITYHOLDERS
With respect to each series of Securities that includes Notes, on or
prior to each Payment Date, the Servicer will prepare and provide to the
related Indenture Trustee a statement to be delivered to the related
Noteholders on such Payment Date. With respect to each series of Securities
that includes Certificates, on or prior to each Distribution Date, the
Servicer will prepare and provide to the related Trustee a statement to be
delivered to the related Certificateholders. With respect to each series of
Securities, each such statement to be delivered to Noteholders, if any, will
include (to the extent applicable) the following information (and any other
information so specified in the related Prospectus Supplement) as to the
Notes of such series with respect to such Payment Date or the period since
the previous Payment Date, as applicable, and each such statement to be
delivered to Certificateholders, if any, will include (to the extent
applicable) the following information (and any other information so specified
in the related Prospectus Supplement) as to the Certificates of such series
with respect to such Distribution Date or the period since the previous
Distribution Date, as applicable:
(i) the amount of the distribution allocable to principal of each
class of such Notes and to the Certificate Balance of each class of such
Certificates, 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
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,
included in the related Series Trust Property that were repurchased in
such Collection Period;
(x) the balance of the related Reserve Account (if any) on such
date, after giving effect to changes therein on such date;
(xi) for each such date during the related Funding Period (if any),
the related remaining Pre-Funded Amount; and
(xii) for the first such date that is on or immediately following
the end of the Funding Period (if any), the amount of any related
remaining Pre-Funded Amount that has not been used to fund the purchase
of Subsequent Receivables and is being passed through as payments of
principal on the Securities of such series.
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 with respect to a series
of Securities and the Servicer will agree to service such Receivables, each
Trust Agreement (in the case of a grantor trust, the Pooling and Servicing
Agreement) pursuant to which a Trust will be created and Certificates, if
any, will be issued and each Administration Agreement pursuant to which CFC
will undertake certain administrative duties with respect to a series of
Notes (collectively, the "Transfer and Servicing Agreements"). Forms of the
Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. This summary
does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all the provisions of the Transfer and Servicing
Agreements.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified with respect to any series of Securities
in the related Prospectus Supplement (the "Closing Date"), the Seller will,
if so specified in such Prospectus Supplement, transfer and assign to the
applicable Trustee, without recourse, pursuant to a Sale and Servicing
Agreement or a Pooling and Servicing Agreement, as applicable, its entire
interest in the Initial Receivables, if any, of the related Receivables Pool,
including its security interests in the related Financed Vehicles. Each such
Receivable will be identified in a schedule appearing as an exhibit to such
Pooling and Servicing Agreement or Sale and Servicing Agreement (a "Schedule
of Receivables"). The applicable Trustee will, concurrently with such
transfer and assignment, execute and deliver the related Notes and/or
Certificates, as applicable. Unless otherwise provided in the related
Prospectus Supplement, the net proceeds received from the sale of the
Certificates and the Notes of a series will be applied to the purchase of the
related Receivables from the Seller and, to the extent specified in the
related Prospectus Supplement, to the deposit of the Pre-Funded Amount for
such series into the related Pre-Funding Account. The related Prospectus
Supplement for a series of Securities will specify whether, and the terms,
conditions and manner under which, Subsequent Receivables for such series
will be sold by the Seller to the applicable Trust from time to time during
any Funding Period for such series on each date specified as a transfer date
in the related Prospectus Supplement (each, a "Subsequent Transfer Date").
In each Sale and Servicing Agreement or Pooling and Servicing Agreement,
the Seller will represent and warrant to the applicable Trust, among other
things, that: (i) the information provided in the related Schedule of
Receivables is correct in all material respects; (ii) the Obligor on each
related Receivable is required to maintain physical damage insurance covering
the Financed Vehicle in accordance with the Seller's normal requirements;
(iii) as of the applicable Closing Date or the applicable Subsequent Transfer
Date, if any, to the best of its knowledge, the related Receivables are free
and clear of all security interests, liens, charges and encumbrances and no
offsets, defenses or counterclaims have been asserted or threatened; (iv) as
of the Closing Date or the applicable Subsequent Transfer Date, if any, each
of such Receivables is or will be secured by a first perfected security
interest in favor of the Seller in the Financed Vehicle; (v) each related
Receivable, at the time it was originated, complied and, as of the Closing
Date or the applicable Subsequent Transfer Date, if any, complies in all
material respects with applicable federal and state laws, including, without
limitation, consumer credit, truth in lending, equal credit opportunity and
disclosure laws; and (vi) any other representations and warranties that may
be set forth in the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, as of
the last day of the second (or, if the Seller elects, the first) month
following the discovery by or notice to the Seller of a breach of any
representation or warranty of the Seller that materially and adversely
affects the interests of the related Trust in any Receivable, the Seller,
unless the breach is cured, will repurchase such Receivable from such Trust
at a price equal to the unpaid principal balance owed by the Obligor thereon
plus interest thereon at the respective APR to the last day of the month of
repurchase (the "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 the related series for any
such uncured breach.
Pursuant to each Sale and Servicing Agreement or Pooling and Servicing
Agreement, to assure uniform quality in servicing the Receivables and to
reduce administrative costs, each Trust will designate the Servicer as
custodian to maintain possession, as such Trust's agent, of the related motor
vehicle retail installment sale contracts and any other documents relating to
the Receivables. The Seller's accounting records and computer systems will
reflect the sale and assignment of the related Receivables to the applicable
Trust, and Uniform Commercial Code ("UCC") financing statements reflecting
such sale and assignment will be filed.
ACCOUNTS
With respect to each Trust that issues one or more series of Notes, the
Servicer will establish and maintain with the related Indenture Trustee one
or more accounts, in the name of the Indenture Trustee on behalf of the
Noteholders and Certificateholders, if any, of such series, into which all
payments made on or with respect to the Receivables included in the Series
Trust Property for such series will be deposited (the "Collection Account").
The Servicer will establish and maintain with such Indenture Trustee an
account, in the name of such Indenture Trustee on behalf of such Noteholders,
into which amounts released from the Collection Account and any Pre-Funding
Account, Reserve Account or other credit enhancement for such series for
payment to such Noteholders will be deposited and from which all
distributions to such Noteholders will be made (the "Note Distribution
Account"). The Servicer will establish and maintain with the related Trustee
an account, in the name of such Trustee on behalf of such Certificateholders,
into which amounts released from the Collection Account and any Pre-Funding
Account, Reserve Account or other credit or cash flow enhancement for such
series for distribution to such Certificateholders will be deposited and from
which all distributions to such Certificateholders will be made (the
"Certificate Distribution Account"). With respect to each Trust that does not
issue Notes, the Servicer will also establish and maintain the Collection
Account and any other Trust Account in the name of the related Trustee on
behalf of the related Certificateholders. The Trust Accounts relating to a
series of Securities will not contain funds relating to any other series of
Securities.
If so provided in the related Prospectus Supplement, the Servicer will
establish for each series an additional account (the "Payahead Account"), in
the name of the related Indenture Trustee or Trustee, into which, to the
extent required by the Sale and Servicing Agreement, early payments by or on
behalf of Obligors on Precomputed Receivables allocated to such series will
be deposited until such time as the payment becomes due. Until such time as
payments are transferred from the Payahead Account to the Collection Account
for such series, they will not constitute collected interest or collected
principal and will not be available for distribution to the applicable
Noteholders or Certificateholders. The Payahead Account will initially be
maintained with the applicable Indenture Trustee or, in the case of each
Trust that does not issue Notes, the applicable Trustee.
Any other accounts to be established with respect to a series of
Securities, 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 for a series, funds
in any Reserve Account for such series may be invested in securities that
will not mature prior to the date of the next distribution with respect to
the Certificates or Notes of such series and will not be sold to meet any
shortfalls. Thus, the amount of cash in any Reserve Account at any time may
be less than the balance of the Reserve Account. If the amount required to be
withdrawn from any Reserve Account to cover shortfalls in collections on the
Receivables allocated to the related series (as provided in the related
Prospectus Supplement) exceeds the amount of cash in the Reserve Account, a
temporary shortfall in the amounts distributed to the related Noteholders or
Certificateholders of such series could result, which could, in turn,
increase the average life of the Notes or the Certificates of such series.
Except as otherwise specified in the related Prospectus Supplement,
investment earnings on funds deposited in the Trust Accounts, net of losses
and investment expenses (collectively, "Investment Earnings"), shall be
deposited in the applicable Collection Account on each Distribution Date or
Payment Date and shall be treated as collections of interest on the related
Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution have a credit rating
from each Rating Agency in one of its generic rating categories which
signifies investment grade. "Eligible Institution" means, with respect to a
Trust, (a) the corporate trust department of the related Indenture Trustee or
the related Trustee, as applicable, or (b) a depository institution organized
under the laws of the United States of America or any one of the states
thereof or the District of Columbia (or any domestic branch of a foreign
bank), (i) which has either (A) a long-term unsecured debt rating acceptable
to the Rating Agencies or (B) a short-term unsecured debt rating or
certificate of deposit rating acceptable to the Rating Agencies and (ii)
whose deposits are insured by the FDIC.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due
with respect to the Receivables held by any Trust in respect of a series and
will, consistent with the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, follow such collection procedures as it follows with
respect to comparable motor vehicle retail installment sale contracts it
services for itself or others. Consistent with its normal procedures, the
Servicer may, in its discretion, arrange with the Obligor on a Receivable to
extend or modify the payment schedule, but no such arrangement will, for
purposes of any Sale and Servicing Agreement or Pooling and Servicing
Agreement, modify the original due dates or the amount of the scheduled
payments or extend the final payment date of any Receivable beyond the Final
Scheduled Maturity Date (as such term is defined with respect to any
Receivables Pool in the related Prospectus Supplement) for the related
series. Some of such arrangements may result in the Servicer purchasing the
Receivable for the 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 series, the Servicer will deposit all payments on
the related Receivables (from whatever source) and all proceeds of such
Receivables collected during each collection period specified in the related
Prospectus Supplement (each, a "Collection Period") into the related
Collection Account within two business days after receipt thereof. However,
at any time that and for so long as (i) CFC is the Servicer, (ii) there
exists no Servicer Default and (iii) each other condition to making deposits
less frequently than daily as may be specified by the Rating Agencies or set
forth in the related Prospectus Supplement is satisfied, the Servicer 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
If so provided in the related Prospectus Supplement, to the extent the
collections of interest and principal on a Precomputed Receivable with
respect to a Collection Period fall short of the respective scheduled
payment, the Servicer will make a Precomputed Advance of the shortfall. The
Servicer will be obligated to make a Precomputed Advance on a Precomputed
Receivable only to the extent that the Servicer, in its sole discretion,
expects to recoup such advance from subsequent collections or recoveries on
such Receivable or other Precomputed Receivables in the related Receivables
Pool. The Servicer will deposit the Precomputed Advance in the applicable
Collection Account on or before the business day preceding the applicable
Distribution Date or Payment Date. The Servicer will recoup its Precomputed
Advance from subsequent payments by or on behalf of the respective Obligor or
from insurance or liquidation proceeds with respect to the Receivable and
will release its right to reimbursement in conjunction with its purchase of
the Receivable as Servicer, or, upon the determination that reimbursement
from the preceding sources is unlikely, will recoup its Precomputed Advance
from any collections made on other Precomputed Receivables in the related
Receivables Pool.
If so provided in the related Prospectus Supplement, on or before the
business day prior to each applicable Distribution Date or Payment Date, the
Servicer shall deposit into the related Collection Account as a Simple
Interest Advance an amount equal to the amount of interest that would have
been due on the Simple Interest Receivables allocated to a series at their
respective APRs for the related Collection Period (assuming that such Simple
Interest Receivables are paid on their respective due dates) minus the amount
of interest actually received on such Simple Interest Receivables during the
related Collection Period. If such calculation results in a negative number,
an amount equal to such amount shall be paid to the Servicer in reimbursement
of outstanding Simple Interest Advances. In addition, in the event that a
Simple Interest Receivable allocated to a series becomes a Liquidated
Receivable (as such term is defined in the related Prospectus Supplement),
the amount of accrued and unpaid interest thereon (but not including interest
for the then current Collection Period) shall be withdrawn from the
Collection Account for such series and paid to the Servicer in reimbursement
of outstanding Simple Interest Advances. No advances of principal will be
made with respect to Simple Interest Receivables.
As used herein, "Advances" means both Precomputed Advances and Simple
Interest Advances.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the Prospectus Supplement with respect to
any series, the Servicer will be entitled to receive the Servicing Fee for
each Collection Period in an amount equal to specified percentage per annum
(as set forth in the related Prospectus Supplement, the "Servicing Fee Rate")
of the Pool Balance for such series as of the first day of the related
Collection Period (the "Servicing Fee"). The Servicing Fee (together with any
portion of the Servicing Fee that remains unpaid from prior Distribution
Dates or Payment Dates) will be paid solely to the extent of the Interest
Distribution Amount for such series. However, the Servicing Fee will be paid
prior to the distribution of any portion of the Interest Distribution Amount
to the Noteholders or the Certificateholders of such series.
Unless otherwise provided in the related Prospectus Supplement with
respect to a given Trust, the Servicer will also collect and retain any late
fees, prepayment charges and other administrative fees or similar charges
allowed by applicable law with respect to the related Receivables and will be
entitled to reimbursement from such Trust for certain liabilities. Payments
by or on behalf of Obligors will be allocated to scheduled payments and late
fees and other charges in accordance with the Servicer's normal practices and
procedures.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of motor vehicle receivables as an agent
for their beneficial owner, including collecting and posting all payments,
responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information
to Obligors, paying costs of collections and disposition of defaults and
policing the collateral. The Servicing Fee also will compensate the Servicer
for administering the particular Receivables Pool, including making Advances,
accounting for collections and furnishing monthly and annual statements to
the related Trustee and Indenture Trustee with respect to distributions and
generating federal income tax information for such Trust and for the related
Noteholders and Certificateholders. The Servicing Fee also will reimburse the
Servicer for certain taxes, the fees of the related Trustee and Indenture
Trustee, if any, accounting fees, outside auditor fees, data processing costs
and other costs incurred in connection with administering the applicable
Receivables Pool.
DISTRIBUTIONS
With respect to each series of Securities, beginning on the Payment Date
or Distribution Date, as applicable, specified in the related Prospectus
Supplement, distributions of principal and interest (or, where applicable, of
principal or interest only) on each class of such Securities entitled thereto
will be made by the Applicable Trustee to the Noteholders and the
Certificateholders of such series. The timing, calculation, allocation,
order, source, priorities of and requirements for all payments to each class
of Noteholders and all distributions to each class of Certificateholders of
such series will be set forth in the related Prospectus Supplement.
With respect to each series, on each Payment Date and Distribution Date,
as applicable, collections on the related Receivables will be transferred
from the Collection Account to the Note Distribution Account, if any, and the
Certificate Distribution Account, if any, for distribution to Noteholders, if
any, and Certificateholders, if any, to the extent provided in the related
Prospectus Supplement. Credit enhancement, such as a Reserve Account, will be
available to cover any shortfalls in the amount available for distribution on
such date to the extent specified in the related Prospectus Supplement. As
more fully described in the related Prospectus Supplement, and unless
otherwise specified therein, distributions in respect of principal of a class
of Securities of a given series will be subordinate to distributions in
respect of interest on such class, and distributions in respect of one
or more classes of Certificates of such series may be subordinate to
payments in respect of Notes, if any, of such series or other classes of
Certificates of such series.
In the case of a Trust that issues more than one series of Securities,
the distributions on the Securities of any such series will be made solely
from funds in the Series Trust Property allocated to such series and not from
any other Series Trust Property.
Allocation of Collections on Receivables; 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. If so specified in a Prospectus Supplement, the amounts
of collections on the Receivables of a series that are allocable to interest
and principal, respectively, will first be 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 or Pooling and Servicing
Agreement, as applicable, and then any remaining amount in the Collection
Account shall be allocated to principal. Payments to Securityholders shall be
distributed on each Distribution Date or Payment Date in accordance with such
allocations, 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.
CREDIT AND CASH FLOW ENHANCEMENT; LIQUIDITY ARRANGEMENTS
The amounts and types of credit and cash flow enhancement arrangements
and the provider thereof, if applicable, with respect to each class of
Securities of a given series, if any, will be set forth in the related
Prospectus Supplement. If and to the extent provided in the related
Prospectus Supplement, credit and cash flow enhancement may be in the form of
subordination of one or more classes of Securities of a series, Reserve
Accounts, overcollateralization, letters of credit, credit or liquidity
facilities, surety bonds, guaranteed investment contracts, swaps (including
without limitation currency swaps), other interest rate protection
agreements, repurchase obligations (including without limitation put
options), yield supplement agreements, other agreements with respect to third
party payments or other support, cash deposits or such other arrangements as
may be described in the related Prospectus Supplement or any combination of
two or more of the foregoing. If specified in the applicable Prospectus
Supplement, credit or cash flow enhancement or any such other arrangement for
a class of Securities may cover one or more other classes of Securities of
the same series, and credit or cash flow enhancement or any such other
arrangement for a series of Securities may cover one or more other series of
Securities.
The presence of a Reserve Account and other forms of credit enhancement
for the benefit of any class or series of Securities is intended to enhance
the likelihood of receipt by the Securityholders of such class or series of
the full amount of principal and interest due thereon and to decrease the
likelihood that such Securityholders will experience losses. Unless
otherwise specified in the related Prospectus Supplement, the credit
enhancement for a class or series of Securities will not provide protection
against all risks of loss and will not guarantee repayment of the entire
principal balance and interest thereon. If losses occur which exceed the
amount covered by any credit enhancement or which are not covered by any
credit enhancement, Securityholders of any class or series will bear their
allocable share of deficiencies, as described in the related Prospectus
Supplement. In addition, if a form of credit enhancement covers
more than one series of Securities, Securityholders of any such series will
be subject to the risk that such credit enhancement will be exhausted by the
claims of Securityholders of other series.
Reserve Account. If so provided in the related Prospectus Supplement,
pursuant to the related Sale and Servicing Agreement or Pool and Servicing
Agreement, the Seller will establish for a series or class of Securities an
account, as specified in the related Prospectus Supplement (the "Reserve
Account"), which will be maintained with the related Trustee or Indenture
Trustee, as applicable. Unless otherwise provided in the related Prospectus
Supplement, the Reserve Account will be funded by an initial deposit by the
Seller on the Closing Date in the amount set forth in the related Prospectus
Supplement and, if the related series has a Funding Period, will also be
funded on each Subsequent Transfer Date to the extent described in the
related Prospectus Supplement. As further described in the related Prospectus
Supplement, the amount on deposit in the Reserve Account will be increased on
each Distribution Date or Payment Date thereafter up to the Specified Reserve
Account Balance (as defined in the related Prospectus Supplement) by the
deposit therein of the amount of collections on the related Receivables
remaining on each such Distribution Date or Payment Date after the payment of
all other required payments and distributions on such date. The related
Prospectus Supplement will describe the circumstances and manner under which
distributions may be made out of the Reserve Account, either to holders of
the Securities covered thereby or to the applicable Company.
NET DEPOSITS
As an administrative convenience, unless the Servicer is required to
remit collections daily (see "--Collections" above), the Servicer will be
permitted to make the deposit of collections, aggregate Advances and 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 series as if all deposits, distributions and transfers were
made individually. With respect to any Trust that issues both Certificates
and Notes, if the related Payment Dates do not coincide with Distribution
Dates, all distributions, deposits or other remittances made on a Payment
Date will be treated as having been distributed, deposited or remitted on the
Distribution Date for the applicable Collection Period for purposes of
determining other amounts required to be distributed, deposited or otherwise
remitted on such Distribution Date.
STATEMENTS TO TRUSTEES AND TRUST
Prior to each Distribution Date or Payment Date with respect to each
series of Securities, the Servicer will provide to the applicable Indenture
Trustee, if any, and the applicable Trustee as of the close of business on
the last day of the 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 CFC may not resign from its obligations and duties as
Servicer thereunder, except upon determination that CFC's performance of such
duties is no longer permissible under applicable law. No such resignation
will become effective until the related Indenture Trustee or Trustee, as
applicable, or a successor servicer has assumed CFC's servicing obligations
and duties under such Sale and Servicing Agreement or Pooling and Servicing
Agreement.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement
will further provide that neither the Servicer nor any of its directors,
officers, employees and agents will be under any liability to the related
Trust or the related Noteholders or Certificateholders for taking any action
or for refraining from taking any action pursuant to such Sale and Servicing
Agreement or Pooling and Servicing Agreement or for errors in judgment;
except that neither the Servicer nor any such person will be protected
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of the Servicer's
duties thereunder or by reason of reckless disregard of its obligations and
duties thereunder. In addition, each Sale and Servicing Agreement and Pooling
and Servicing Agreement will provide that the Servicer is under no obligation
to appear in, prosecute or defend any legal action that is not incidental to
the Servicer's servicing responsibilities under such Sale and Servicing
Agreement or Pooling and Servicing Agreement and that, in its opinion, may
cause it to incur any expense or liability.
Under the circumstances specified in each Sale and Servicing Agreement
and Pooling and Servicing Agreement , any entity into which the Servicer may
be merged or consolidated, or any entity resulting from any merger or
consolidation to which the Servicer is a party, or any entity succeeding to
the business of the Servicer or, with respect to its obligations as Servicer,
any corporation 50% or more of the voting stock of which is owned, directly
or indirectly, by Chrysler, which corporation or other entity in each of the
foregoing cases assumes the obligations of the Servicer, will be the
successor of the Servicer under such Sale and Servicing Agreement or Pooling
and Servicing Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement,
"Servicer Default" under each Sale and Servicing Agreement and Pooling and
Servicing Agreement will consist of (i) any failure by the Servicer to
deliver to the Applicable Trustee for deposit in any of the related Trust
Accounts or the related Certificate Distribution Account any required payment
or to direct the Applicable Trustee to make any required distributions
therefrom, which failure continues unremedied for 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 (B) to the Servicer or the
Seller, as the case may be, and to the Applicable Trustee by holders of Notes
or Certificates of such series, as applicable, evidencing not less than 25%
in principal amount of such outstanding Notes or of such Certificate Balance;
and (iii) the occurrence of an Insolvency Event with respect to the Servicer,
the Seller or any related Company. "Insolvency Event" means, with respect to
any Person, any of the following events or actions: certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings with respect to such Person and certain actions by such
Person indicating its insolvency, reorganization pursuant to bankruptcy
proceedings or inability to pay its obligations.
RIGHTS UPON SERVICER DEFAULT
In the case of any Trust that has issued Notes, unless otherwise
provided in the related Prospectus Supplement, as long as a Servicer Default
under a Sale and Servicing Agreement remains unremedied, the related
Indenture Trustee or holders of Notes of the related series evidencing not
less than 25% of principal amount of such Notes then outstanding may
terminate all the rights and obligations of the Servicer under such Sale and
Servicing Agreement, whereupon such Indenture Trustee or a successor servicer
appointed by such Indenture Trustee will succeed to all the responsibilities,
duties and liabilities of the Servicer under such Sale and Servicing
Agreement and will be entitled to similar compensation arrangements. In the
case of any Trust that has not issued Notes, unless otherwise provided in the
related Prospectus Supplement, as long as a Servicer Default under the
related Pooling and Servicing Agreement remains unremedied, the related
Trustee or holders of Certificates of the related series evidencing not less
than 25% of the principal amount of such Certificates then outstanding may
terminate all the rights and obligations of the Servicer under such Pooling
and Servicing Agreement, whereupon such Trustee or a successor servicer
appointed by such Trustee will succeed to all the responsibilities, duties
and liabilities of the Servicer under such Pooling and Servicing Agreement
and will be entitled to similar compensation arrangements. If, however, a
bankruptcy trustee or similar official has been appointed for the Servicer,
and no Servicer Default other than such appointment has occurred, such
trustee or official may have the power to prevent such Indenture Trustee,
such Noteholders, such Trustee or such Certificateholders from effecting a
transfer of servicing. In the event that such Indenture Trustee or Trustee is
unwilling or unable to so act, it may appoint, or petition a court of
competent jurisdiction for the appointment of, a successor with a net worth
of at least $100,000,000 and whose regular business includes the servicing of
motor vehicle receivables. Such Indenture Trustee or Trustee may make such
arrangements for compensation to be paid, which in no event may be greater
than the servicing compensation to the Servicer under such Sale and Servicing
Agreement or Pooling and Servicing Agreement.
WAIVER OF PAST DEFAULTS
With respect to each Trust that has issued Notes, unless otherwise
provided in the related Prospectus Supplement, the holders of Notes of a
series evidencing at least a majority in principal amount of the then
outstanding Notes of such series (or the holders of the Certificates of such
series evidencing not less than a majority of the outstanding Certificate
Balance, in the case of any Servicer Default which does not adversely affect
the related Indenture Trustee or such Noteholders) may, on behalf of all such
Noteholders and Certificateholders, waive any default by the Servicer in the
performance of its obligations under the related Sale and Servicing Agreement
and its consequences, except a Servicer Default in making any required
deposits to or payments from any of the Trust Accounts or to the Certificate
Distribution Account for such series in accordance with such Sale and
Servicing Agreement. With respect to each Trust that has not issued Notes,
holders of Certificates of a series evidencing not less than a majority of
the principal amount of such Certificates then outstanding may, on behalf of
all such Certificateholders, waive any default by the Servicer in the
performance of its obligations under the related Sale and Servicing Agreement
or Pooling and Servicing Agreement, except a Servicer Default in making any
required deposits to or payments from the Certificate Distribution Account or
the Trust Accounts for such series in accordance with such Pooling and
Servicing Agreement. No such waiver will impair such Noteholders' or
Certificateholders' rights with respect to subsequent defaults.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, each of
the Transfer and Servicing Agreements may be amended by the parties thereto,
without the consent of the related Noteholders or Certificateholders, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of such Transfer and Servicing Agreements or of
modifying in any manner the rights of such Noteholders or Certificateholders;
provided that such action will not, in the opinion of counsel satisfactory to
the related Trustee or Indenture Trustee, as applicable, materially and
adversely affect the interest of any such Noteholder or Certificateholder.
Unless otherwise specified in the related Prospectus Supplement, the Transfer
and Servicing Agreements may also be amended by the Seller, the Servicer, the
related Trustee and any related Indenture Trustee with the consent of the
holders of Notes evidencing at least a majority in principal amount of then
outstanding Notes, if any, of the related series and the holders of the
Certificates of such series evidencing at least a majority of the principal
amount of such Certificates then outstanding, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of such Transfer and Servicing Agreements or of modifying in any manner the
rights of such Noteholders or Certificateholders; provided, however, that no
such amendment may (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the related
Receivables or distributions that are required to be made for the benefit of
such Noteholders or Certificateholders or (ii) reduce the aforesaid
percentage of the Notes or Certificates of such series which are required to
consent to any such amendment, without the consent of the holders of all the
outstanding Notes or Certificates, as the case may be, of such series.
INSOLVENCY EVENT
Subject to the following paragraph, with respect to a Trust that is not
a grantor trust, if the related Prospectus so provides, upon the occurrence
of an Insolvency Event with respect to the Company in respect of such Trust,
the related Receivables of such Trust will be liquidated and the Trust will
be terminated 90 days after the date of such Insolvency Event, unless, before
the end of such 90-day period, the related Trustee shall have received
written instructions from (i) holders of each class of the Certificates
(other than such Company) of each series with respect to such Trust
representing more than 50% of the aggregate unpaid principal amount of each
such class (not including the principal amount of such Certificates held by
such Company), (ii) holders of each class of Notes, if any, of each series
with respect to such Trust representing more than 50% of the aggregate unpaid
principal amount of each such class and (iii) holders, if any, of
certificates representing more than 50% of the aggregate unpaid principal
amount of certificates representing interests in, or indebtedness secured by,
final fixed value payments with respect to the Fixed Value Receivables, if
any, initially purchased by such Company and subsequently added to such Trust
(such certificates or indebtedness being referred to herein as "Fixed Value
Securities"), to the effect that each such party disapproves of the
liquidation of such Receivables and termination of such Trust. Promptly after
the occurrence of an Insolvency Event with respect to such Company, notice
thereof is required to be given to such Noteholders, Certificateholders and
holders of Fixed Value Securities; provided that any failure to give such
required notice will not prevent or delay termination of such Trust. Upon
termination of any Trust, the related Trustee shall, or shall direct the
related Indenture Trustee to, promptly sell the assets of such Trust (other
than the Trust Accounts and Certificate Distribution Accounts) in a
commercially reasonable manner and on commercially reasonable terms. The
proceeds from any such sale, disposition or liquidation of the Receivables of
such Trust allocable to each series issued by such Trust will be treated as
collections on such Receivables and deposited in the related Collection
Account for such series. With respect to any series of such Trust, if the
proceeds from the liquidation of the Receivables allocated to such series and
any amounts on deposit in the Reserve Account (if any), the Payahead Account
(if any), the Note Distribution Account (if any) and the Certificate
Distribution Account for such series are not sufficient to pay the Notes, if
any, and the Certificates of such series in full, the amount of principal
returned to Noteholders and Certificateholders of such series will be reduced
and some or all of such Noteholders and Certificateholders will incur a loss.
Each Trust Agreement will provide that the applicable Trustee does not
have the power to commence a voluntary proceeding in bankruptcy with respect
to the related Trust without the unanimous prior approval of all
Certificateholders (including the applicable Company) of such Trust and the
delivery to such Trustee by each such Certificateholder (including such
Company) of a certificate certifying that such Certificateholder reasonably
believes that such Trust is insolvent.
PAYMENT OF NOTES
Upon the payment in full of all outstanding Notes of a series and the
satisfaction and discharge of the related Indenture, the related Trustee will
succeed to all the rights of the Indenture Trustee, and the
Certificateholders of such series will succeed to all the rights of the
Noteholders of such series, under the related Sale and Servicing Agreement,
except as otherwise provided therein.
COMPANY LIABILITY
If the related Prospectus Supplement so provides, the applicable Company
with respect to the related Trust will agree under the related Trust
Agreement to be liable directly to an injured party for the entire amount of
any losses, claims, damages or liabilities (other than those incurred by a
Noteholder or a Certificateholder in the capacity of an investor with respect
to such Trust) arising out of or based on the arrangement created by such
Trust Agreement as though such arrangement created a partnership under the
Delaware Revised Uniform Limited Partnership Act in which such Company was a
general partner.
TERMINATION
With respect to each series, the obligations of the Servicer, the
Seller, the related Trustee and the related Indenture Trustee, if any,
pursuant to the Transfer and Servicing Agreements will terminate upon the
earlier of (i) the maturity or other liquidation of the last related
Receivable included in the Series Trust Property allocated to such series and
the disposition of any amounts received upon liquidation of any such
remaining Receivables, (ii) the payment to Noteholders, if any, and
Certificateholders of such series of all amounts required to be paid to them
pursuant to the Transfer and Servicing Agreements and (iii) the occurrence of
either event described below.
Unless otherwise provided in the related Prospectus Supplement, in order
to avoid excessive administrative expense, the Servicer will be permitted at
its option to purchase from each Trust, as of the end of any applicable
Collection Period, if the then outstanding Pool Balance with respect to the
Receivables included in Series Trust Property allocated to a series is 10% or
less of the Initial Pool Balance (as defined in the related Prospectus
Supplement, the "Initial Pool Balance") of such series, all such remaining
Receivables at a price equal to the aggregate of the 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 of such series
is equal to or less than the percentage of the Initial Pool Balance of such
series specified in the related Prospectus Supplement, solicit bids for the
purchase of such Receivables remaining in such Trust and allocated to such
series, in the manner and subject to the terms and conditions set forth in
such Prospectus Supplement. If the Applicable Trustee receives satisfactory
bids as described in such Prospectus Supplement, then such remaining
Receivables will be sold to the highest bidder.
As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the events specified above, and the subsequent distribution to the
related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement or Pooling and Servicing Agreement
will effect early retirement of the Certificates of such series.
ADMINISTRATION AGREEMENT
CFC, in its capacity as administrator (the "Administrator"), will enter
into an agreement (as amended and supplemented from time to time, an
"Administration Agreement") with each Trust that issues Notes and the related
Indenture Trustee pursuant to which the Administrator will agree, to the
extent provided in such Administration Agreement, to provide the notices and
to perform other administrative obligations required by the related
Indenture. Unless otherwise specified in the related Prospectus Supplement
with respect to any such Trust, as compensation for the performance of the
Administrator's obligations under the applicable Administration Agreement and
as reimbursement for its expenses related thereto, the Administrator will be
entitled to a monthly administration fee in an amount equal to $200 per month
with respect to each series of Notes, or such other amount as may be set
forth in the related Prospectus Supplement (the "Administration Fee"), which
fee will be paid by the Servicer.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In states in which retail installment sale contracts such as the
Receivables evidence the credit sale of automobiles and light duty trucks by
dealers to obligors, the contracts also constitute personal property security
agreements and include grants of security interests in the vehicles under the
applicable UCC. Perfection of security interests in the automobiles and light
duty trucks financed by the Seller is generally governed by the motor vehicle
registration laws of the state in which the vehicle is located. In all states
in which the Receivables have been originated, a security interest in
automobiles and light duty trucks is perfected by obtaining the certificate
of title to the Financed Vehicle or notation of the secured party's lien on
the vehicles' certificate of title (in addition, in Louisiana, a copy of the
installment sale contract must be filed with the appropriate governmental
recording office).
All contracts originated or acquired by the Seller name the Seller or
CCC as obligee or assignee and as the secured party. The Seller also takes
all actions necessary under the laws of the state in which the financed
vehicle is located to perfect the Seller's or CCC's security interest in the
financed vehicle, including, where applicable, having a notation of its lien
or CCC's lien, as applicable, recorded on such vehicle's certificate of
title. Because the Seller continues to service the contracts, the obligors on
the contracts will not be notified of the sale to the Trust, and no action
will be taken to record the transfer of the security interest from CCC to the
Seller or from the Seller to the Trust by amendment of the certificates of
title for the Financed Vehicles or otherwise.
The Seller will assign its interests in the Financed Vehicles securing
the related Receivables to each Trust pursuant to the related Sale and
Servicing Agreement or Pooling and Servicing Agreement (as applicable).
However, because of the administrative burden and expense, neither the Seller
nor the related Trustee will amend any certificate of title to identify the
Trust as the new secured party on the certificate of title relating to a
Financed Vehicle. Also, the Seller will continue to hold any certificates
of title relating to the vehicles in its possession as custodian for
the Trust pursuant to the related Sale and Servicing Agreement or Pooling
and Servicing Agreement. See "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables".
In most states, an assignment such as that under each Sale and Servicing
Agreement or Pooling and Servicing Agreement is an effective conveyance of a
security interest without amendment of any lien noted on a vehicle's
certificate of title, and the assignee succeeds thereby to the assignor's
rights as secured party. However, by not identifying a Trust as the secured
party on the certificate of title, the security interest of such Trust in the
vehicle could be defeated through fraud or negligence. In such states, in the
absence of fraud or forgery by the vehicle owner or the Seller or
administrative error by state or local agencies, the notation of the Seller's
lien or CCC's lien on the certificates of title will be sufficient to protect
a Trust against the rights of subsequent purchasers of a Financed Vehicle or
subsequent lenders who take a security interest in a Financed Vehicle. If
there are any Financed Vehicles as to which the Seller failed to obtain or
assign to the Trust a perfected security interest, the security interest of
the Trust would be subordinate to, among others, the interests of subsequent
purchasers of the Financed Vehicles and holders of perfected security
interests therein. Such a failure, however, would constitute a breach of the
warranties of the Seller under the related Sale and Servicing Agreement or
Pooling and Servicing Agreement and would create an obligation of the Seller
to repurchase the related Receivable unless the breach were cured. See
"Description of the Transfer and Servicing Agreements -- Sale and Assignment
of Receivables" and "Special Considerations -- Certain Legal Aspects --
Security Interests in Financed Vehicles".
Under the laws of most states, the perfected security interest in a
vehicle would continue for four months after the vehicle is moved to a state
other than the state in which it is initially registered and thereafter until
the owner thereof re-registers the vehicle in the new state. A majority of
states generally require surrender of a certificate of title to re-register a
vehicle. Accordingly, a secured party must surrender possession if it holds
the certificate of title to the vehicle or, in the case of a vehicle
registered in a state providing for the notation of a lien on the certificate
of title but not possession by the secured party, the secured party would
receive notice of surrender if the security interest is noted on the
certificate of title. Thus, the secured party would have the opportunity to
re-perfect its security interest in the vehicle in the state of relocation.
In states that do not require a certificate of title for registration of a
motor vehicle, re-registration could defeat perfection. In the ordinary
course of servicing motor vehicle receivables, the Servicer takes steps to
effect re-perfection upon receipt of notice of re-registration or information
from the obligor as to relocation. Similarly, when an obligor sells a
vehicle, the Servicer must surrender possession of the certificate of title
or will receive notice as a result of its lien noted thereon and accordingly
will have an opportunity to require satisfaction of the related Receivable
before release of the lien. Under each Sale and Servicing Agreement and
Pooling and Servicing Agreement, the Servicer is obligated to take
appropriate steps, at the Servicer's expense, to maintain perfection of
security interests in the Financed Vehicles and is obligated to purchase the
related Receivable if it fails to do so.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected
security interest in a financed vehicle. The Code also grants priority to
certain federal tax liens over the lien of a secured party. The laws of
certain states and federal law permit the confiscation of vehicles by
governmental authorities under certain circumstances if used in unlawful
activities, which may result in the loss of a secured party's perfected
security interest in the confiscated vehicle. Under each Sale and Servicing
Agreement and Pooling and Servicing Agreement, the Seller will represent to
the related Trust that, as of the date the related Receivable is sold to such
Trust, each security interest in a Financed Vehicle is or will be prior to
all other present liens (other than tax liens and other liens that arise by
operation of law) upon and security interests in such Financed Vehicle.
However, liens for repairs or taxes could arise, or the confiscation of a
Financed Vehicle could occur, at any time during the term of a Receivable. No
notice will be given to the Trustee, any Indenture Trustee, any Noteholders
or the Certificateholders in respect of a given Trust if such a lien arises
or confiscation occurs.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the motor
vehicle retail installment sale contract has all the remedies of a secured
party under the UCC, except where specifically limited by other state laws.
Among the UCC remedies, the secured party has the right to perform self-help
repossession unless such act would constitute a breach of the peace.
Self-help is the method employed by the Servicer in most cases and is
accomplished simply by retaking possession of the financed vehicle. In the
event of default by the obligor, some jurisdictions require that the obligor
be notified of the default and be given a time period within which he may
cure the default prior to repossession. Generally, the right of reinstatement
may be exercised on a limited number of occasions in any
one-year period. In cases where the obligor objects or raises a defense to
repossession, or if otherwise required by applicable state law, a court order
must be obtained from the appropriate state court, and the vehicle must then
be repossessed in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held.
The obligor has the right to redeem the collateral prior to actual sale by
paying the secured party the unpaid principal balance of the obligation plus
reasonable expenses for repossessing, holding and preparing the collateral
for disposition and arranging for its sale, plus, in some jurisdictions,
reasonable attorneys' fees, or, in some states, by payment of delinquent
installments or the unpaid balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the vehicles generally will be applied first
to the expenses of resale and repossession and then to the satisfaction of
the indebtedness. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in those
states that do not prohibit or limit such judgments. However, the deficiency
judgment would be a personal judgment against the obligor for the shortfall,
and a defaulting obligor can be expected to have very little capital or
sources of income available following repossession. Therefore, in many cases,
it may not be useful to seek a deficiency judgment or, if one is obtained, it
may be settled at a significant discount.
Occasionally, after resale of a vehicle and payment of all expenses and
all indebtedness, there is a surplus of funds. In that case, the UCC requires
the creditor to remit the surplus to any holder of a lien with respect to the
vehicle or if no such lienholder exists or there are remaining funds, the UCC
requires the creditor to remit the surplus to the former owner of the
vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders and servicers
involved in consumer finance. These laws include the Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Procedures Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the
Texas Consumer Credit Code, state adoptions of the National Consumer Act and
of the Uniform Consumer Credit Code and state motor vehicle retail
installment sales acts, retail installment sales acts and other similar laws.
Also, state laws impose finance charge ceilings and other restrictions on
consumer transactions and require contract disclosures in addition to those
required under federal law. These requirements impose specific statutory
liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade
Commission (the "FTC Rule"), the provisions of which are generally duplicated
by the Uniform Consumer Credit Code, other statutes or the common law, has
the effect of subjecting a seller in a consumer credit transaction (and
certain related creditors and their assignees) to all claims and defenses
which the obligor in the transaction could assert against the seller of the
goods. Liability under the FTC Rule is limited to the amounts paid by the
obligor under the contract and the holder of the contract may also be unable
to collect any balance remaining due thereunder from the obligor.
Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, each Trust, as holder of the related Receivables, will be
subject to any claims or defenses that the purchaser of the applicable
Financed Vehicle may assert against the seller of the Financed Vehicle. Such
claims are limited to a maximum liability equal to the amounts paid by the
Obligor on the Receivable. If an Obligor were successful in asserting any
such claim or defense, such claim or defense would constitute a breach of the
Seller's warranties under the related Sale and Servicing Agreement or Pooling
and Servicing Agreement and would create an obligation of the Seller to
repurchase the Receivable unless the breach is cured. See "Description of the
Transfer and Servicing Agreements -- Sale and Assignment of Receivables".
Courts have applied general equitable principles to secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the
United States. Courts have generally upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale
by the creditor do not involve sufficient state action to afford
constitutional protection to borrowers.
Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, the Seller will warrant to the related Trust that each Receivable
complies with all requirements of law in all material respects. Accordingly,
if an Obligor has a claim against such Trust for violation of any law and
such claim materially and adversely affects such Trust's interest in a
Receivable, such violation would constitute a breach of the warranties of the
Seller under such Sale and Servicing Agreement or Pooling and Servicing
Agreement and would create an obligation of the Seller to repurchase the
Receivable unless the breach is cured. See "Description of the Transfer and
Servicing Agreements -- Sale and Assignment of Receivables".
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured
party to realize upon collateral or to enforce a deficiency judgment. For
example, in a Chapter 13 proceeding under the federal bankruptcy law, a court
may prevent a creditor from repossessing a vehicle, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the
market value of the vehicle at the time of bankruptcy (as determined by the
court), leaving the creditor as a general unsecured creditor for the
remainder of the indebtedness. A bankruptcy court may also reduce the monthly
payments due under a contract or change the rate of interest and time of
repayment of the indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain federal income tax
consequences of the purchase, ownership and disposition of the Notes and the
Certificates. The summary does not purport to deal with federal income tax
consequences applicable to all categories of holders, some of which may be
subject to special rules. For example, it does not discuss the tax treatment
of Noteholders or Certificateholders that are insurance companies, regulated
investment companies or dealers in securities. Moreover, there are no cases
or Internal Revenue Service ("IRS") rulings on similar transactions involving
both debt and equity interests issued by a trust with terms similar to those
of the Notes and the Certificates. As a result, the IRS may disagree with all
or a part of the discussion below. Prospective investors are urged to consult
their own tax advisors in determining the federal, state, local, foreign and
any other tax consequences to them of the purchase, ownership and disposition
of the Notes and the Certificates.
The following summary is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and judicial or ruling authority, all of which are
subject to change, which change may be retroactive. Each Trust will be
provided with an opinion of special Federal tax counsel to each Trust
specified in the related Prospectus Supplement ("Federal Tax Counsel"),
regarding certain federal income tax matters discussed below. An opinion of
Federal Tax Counsel, however, is not binding on the IRS or the courts. No
ruling on any of the issues discussed below will be sought from the IRS. For
purposes of the following summary, references to the Trust, the Notes, the
Certificates and related terms, parties and documents shall be deemed to
refer, unless otherwise specified herein, to each Trust and the Notes,
Certificates and related terms, parties and documents applicable to such
Trust.
The federal income tax consequences to Certificateholders will vary
depending on whether (i) an election is made to treat the Trust as a
partnership under the Code, (ii) all the certificates are retained by the
Seller or an affiliate thereof, or (iii) whether the Trust will be treated as
a grantor trust. The Prospectus Supplement for each series of Certificates
will specify whether a partnership election will be made or the Trust will be
treated as a grantor trust.
TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE
TAX CHARACTERIZATION OF THE TRUST AS A PARTNERSHIP
Federal Tax Counsel will deliver its opinion that a Trust for which a
partnership election is made will not be an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes. This
opinion will be based on the assumption that the terms of the Trust Agreement
and related documents will be complied with, and on counsel's conclusions
that the nature of the income of the Trust will exempt it from the rule that
certain publicly traded partnerships are taxable as corporations.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Federal Tax Counsel will, except as
otherwise provided in the related Prospectus Supplement, advise the Trust
that the Notes will be classified as debt for federal income tax purposes.
The discussion below assumes this characterization of the Notes is correct.
OID, Indexed Securities, etc. The discussion below assumes that all
payments on the Notes are denominated in U.S. dollars, and that the Notes are
not Indexed Securities or Strip Notes. Moreover, the discussion assumes that
the interest formula for the Notes meets the requirements for "qualified
stated interest" under Treasury regulations (the "OID regulations") relating
to original issue discount ("OID"), and that any OID on the Notes (i.e., any
excess of the principal amount of the Notes over their issue price) does not
exceed a de minimis amount (i.e., 1/4% of their principal amount multiplied
by the number of full years included in their term), all within the meaning
of the OID regulations. If these conditions are not satisfied with respect to
any given series of Notes, additional tax considerations with respect to such
Notes will be disclosed in the applicable Prospectus Supplement.
Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the Notes will not be considered issued
with OID. The stated interest thereon will be taxable to a Noteholder as
ordinary interest income when received or accrued in accordance with such
Noteholder's method of tax accounting. Under the OID regulations, a holder of
a Note issued with a de minimis amount of OID must include such OID in
income, on a pro rata basis, as principal payments are made on the Note. It
is believed that any prepayment premium paid as a result of a mandatory
redemption will be taxable as contingent interest when it becomes fixed and
unconditionally payable. A purchaser who buys a Note for more or less than
its principal amount will generally be subject, respectively, to the premium
amortization or market discount rules of the Code.
A holder of a Note that has a fixed maturity date of not more than one
year from the issue date of such Note (a "Short-Term Note") may be subject to
special rules. An accrual basis holder of a Short-Term Note (and certain cash
method holders, including regulated investment companies, as set forth in
Section 1281 of the Code) generally would be required to report interest
income as interest accrues on a straight-line basis over the term of each
interest period. Other cash basis holders of a Short-Term Note would, in
general, be required to report interest income as interest is paid (or, if
earlier, upon the taxable disposition of the Short-Term Note). However, a
cash basis holder of a Short-Term Note reporting interest income as it is
paid may be required to defer a portion of any interest expense otherwise
deductible on indebtedness incurred to purchase or carry the Short-Term Note
until the taxable disposition of the Short-Term Note. A cash basis taxpayer
may elect under Section 1281 of the Code to accrue interest income on all
nongovernment debt obligations with a term of one year or less, in which case
the taxpayer would include interest on the Short-Term Note in income as it
accrues, but would not be subject to the interest expense deferral rule
referred to in the preceding sentence. Certain special rules apply if a
Short-Term Note is purchased for more or less than its principal amount.
Sale or Other Disposition. If a Noteholder sells a Note, the holder
will recognize gain or loss in an amount equal to the difference between the
amount realized on the sale and the holder's adjusted tax basis in the Note.
The adjusted tax basis of a Note to a particular Noteholder will equal the
holder's cost for the Note, increased by any market discount, acquisition
discount, OID (including de minimis OID) and gain previously included by such
Noteholder in income with respect to the Note and decreased by the amount of
bond premium (if any) previously amortized and by the amount of principal
payments previously received by such Noteholder with respect to such Note.
Any such gain or loss will be capital gain or loss if the Note was held as a
capital asset, except for gain representing accrued interest and accrued
market discount not previously included in income. Capital losses generally
may be used only to offset capital gains. Proposed investors in the Notes
should consult their tax advisers concering recent legislation that reduces
the federal income tax rates on long-term capital gains for securities held
for more than eighteen months.
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 Trustee or other person who is
otherwise required to withhold U.S. tax with respect to the Notes with an
appropriate statement (on Form W-8 or a similar form), signed under penalties
of perjury, certifying that the beneficial owner of the Note is a foreign
person and providing the foreign person's name and address. If a Note is held
through a securities clearing organization or certain other financial
institutions, the organization or institution may provide the relevant signed
statement to the withholding agent; in that case, however, the signed
statement must be accompanied by a Form W-8 or substitute form provided by
the foreign person that owns the Note. If such interest is not portfolio
interest, then it will be subject to United States federal income at
graduated rates (if received by a non-U.S. person with effectively connected
income) and withholding tax at a rate of 30 percent, unless reduced or
eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) such gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days
or more in the taxable year and does not otherwise have a "tax home" within
the United States.
Backup Withholding. Each holder of a Note (other than an exempt holder
such as a corporation, tax-exempt organization, qualified pension and
profit-sharing trust, individual retirement account or nonresident alien who
provides certification as to status as a nonresident) will be required to
provide, under penalties of perjury, a certificate containing the holder's
name, address, correct federal taxpayer identification number and a statement
that the holder is not subject to backup withholding. Should a nonexempt
Noteholder fail to provide the required certification, the Trust will be
required to withhold 31 percent of the amount otherwise payable to the
holder, and remit the withheld amount to the IRS as a credit against the
holder's federal income tax liability.
Possible Alternative Treatments of the Notes. If, contrary to the
opinion of Federal Tax Counsel, the IRS successfully asserted that one or
more of the Notes did not represent debt for federal income tax purposes, the
Notes might be treated as equity interests in the Trust. If so treated, the
Trust might be treated as a publicly traded partnership taxable as a
corporation with the adverse consequences described above (and the publicly
traded partnership taxable as a corporation would not be able to reduce its
taxable income by deductions for interest expense on Notes recharacterized as
equity). Alternatively, and most likely in the view of Federal Tax Counsel,
the Trust would be treated as a publicly traded partnership that would not be
taxable as a corporation because it would meet certain qualifying income
tests. Nonetheless, treatment of the Notes as equity interests in such a
partnership could have adverse tax consequences to certain holders. For
example, income to certain tax-exempt entities (including pension funds)
would be "unrelated business taxable income", income to foreign holders
generally would be subject to U.S. tax and U.S. tax return filing and
withholding requirements, and individual holders might be subject to certain
limitations on their ability to deduct their share of Trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES
Treatment of the Trust as a Partnership. The Seller and the Servicer
will agree, and the Certificateholders will agree by their purchase of
Certificates, to treat the Trust and each separate Series Trust Property as a
partnership for purposes of federal and state income tax, franchise tax and
any other tax measured in whole or in part by income, with the assets of the
partnership being the assets held by the Trust, the partners of the
partnership being the Certificateholders (including the Company in its
capacity as recipient of distributions from the Reserve Account), and the
Notes being debt of the related partnership. However, the proper
characterization of the arrangement involving the Trust, the Certificates,
the Notes, the Seller, the Company and the Servicer is not clear because
there is no authority on transactions closely comparable to that contemplated
herein.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Company or the Trust. Any such
characterization would not result in materially adverse tax consequences to
Certificateholders as compared to the
consequences from treatment of the Certificates as equity in a partnership,
described below. The following discussion assumes that the Certificates
represent equity interests in a partnership.
Indexed Securities, etc. The following discussion assumes that all
payments on the Certificates are denominated in U.S. dollars, none of the
Certificates are Indexed Securities or Strip Certificates, and that a series
of Securities includes a single class of Certificates. If these conditions
are not satisfied with respect to any given series of Certificates,
additional tax considerations with respect to such Certificates will be
disclosed in the applicable Prospectus Supplement.
Partnership Taxation. As a partnership, the Trust will not be subject
to federal income tax. Rather, each Certificateholder will be required to
separately take into account such holder's allocated share of income, gains,
losses, deductions and credits of the Trust. The Trust's income will consist
primarily of interest and finance charges earned on the Receivables
(including appropriate adjustments for market discount, OID and bond premium)
and any gain upon collection or disposition of Receivables. The Trust's
deductions will consist primarily of interest accruing with respect to the
Notes, servicing and other fees, and losses or deductions upon collection or
disposition of Receivables.
The tax items of a partnership are allocable to the partners in
accordance with the Code, Treasury regulations and the partnership agreement
(here, the Trust Agreement and related documents). The Trust Agreement will
provide, in general, that the Certificateholders will be allocated taxable
income of the Trust for each month equal to the sum of (i) the interest that
accrues on the Certificates in accordance with their terms for such month,
including interest accruing at the Pass Through Rate for such month and
interest on amounts previously due on the Certificates but not yet
distributed; (ii) any Trust income attributable to discount on the
Receivables that corresponds to any excess of the principal amount of the
Certificates over their initial issue price; (iii) prepayment premium payable
to the Certificateholders for such month; and (iv) any other amounts of
income payable to the Certificateholders for such month. Such allocation will
be reduced by any amortization by the Trust of premium on Receivables that
corresponds to any excess of the issue price of Certificates over their
principal amount. All remaining taxable income of the Trust will be allocated
to the Company. Based on the economic arrangement of the parties, this
approach for allocating Trust income should be permissible under applicable
Treasury regulations, although no assurance can be given that the IRS would
not require a greater amount of income to be allocated to Certificateholders.
Moreover, even under the foregoing method of allocation, Certificateholders
may be allocated income equal to the entire Pass Through Rate plus the other
items described above even though the Trust might not have sufficient cash to
make current cash distributions of such amount. Thus, cash basis holders will
in effect be required to report income from the Certificates on the accrual
basis and Certificateholders may become liable for taxes on Trust income even
if they have not received cash from the Trust to pay such taxes. In addition,
because tax allocations and tax reporting will be done on a uniform basis for
all Certificateholders but Certificateholders may be purchasing Certificates
at different times and at different prices, Certificateholders may be
required to report on their tax returns taxable income that is greater or
less than the amount reported to them by the Trust.
All of the taxable income allocated to a Certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated
business taxable income" generally taxable to such a holder under the Code.
An individual taxpayer's share of expenses of the Trust (including fees
to the Servicer but not interest expense) would be miscellaneous itemized
deductions. Such deductions might be disallowed to the individual in whole or
in part and might result in such holder being taxed on an amount of income
that exceeds the amount of cash actually distributed to such holder over the
life of the Trust.
The Trust intends to make all tax calculations relating to income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the
Trust might be required to incur additional expense but it is believed that
there would not be a material adverse effect on Certificateholders.
Discount and Premium. It is believed that the Receivables were not
issued with OID, and, therefore, the Trust should not have OID income.
However, the purchase price paid by the Trust for the Receivables may be
greater or less than the remaining principal balance of the Receivables at
the time of purchase. If so, the Receivables will have been acquired at a
premium or discount, as the case may be. (As indicated above, the Trust will
make this calculation on an aggregate basis, but might be required to
recompute it on a Receivable-by-Receivable basis.)
If the Trust acquires the Receivables at a market discount or premium,
the Trust will elect to include any such discount in income currently as it
accrues over the life of the Receivables or to offset any such premium
against interest income on the Receivables. As indicated above, a portion of
such market discount income or premium deduction may be allocated to
Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Trust will
be deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. Pursuant to final Treasury regulations issued on May 9
1997, if such a termination occurs, the Trust will be considered to have
contributed the assets of the Trust (the "old partnership") to a new
partnership (the "new partnership") in exchange for interests in the
partnership. Such interests would be deemed distributed to the partners of
the old partnership in liquidation thereof, which would not constitute a sale
or exchange.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Certificates
sold. A Certificateholder's tax basis in a Certificate will generally equal
the holder's cost increased by the holder's share of Trust income (includible
in income) and decreased by any distributions received with respect to such
Certificate. In addition, both the tax basis in the Certificates and the
amount realized on a sale of a Certificate would include the holder's share
of the Notes and other liabilities of the Trust. A holder acquiring
Certificates at different prices may be required to maintain a single
aggregate adjusted tax basis in such Certificates, and, upon sale or other
disposition of some of the Certificates, allocate a portion of such aggregate
tax basis to the Certificates sold (rather than maintaining a separate tax
basis in each Certificate for purposes of computing gain or loss on a sale of
that Certificate).
Any gain on the sale of a Certificate attributable to the holder's share
of unrecognized accrued market discount on the Receivables would generally be
treated as ordinary income to the holder and would give rise to special tax
reporting requirements. The Trust does not expect to have any other assets
that would give rise to such special reporting requirements. Thus, to avoid
those special reporting requirements, the Trust will elect to include market
discount in income as it accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess will generally give rise
to a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the
Trust's taxable income and losses will be determined monthly and the tax
items for a particular calendar month will be apportioned among the
Certificateholders in proportion to the principal amount of Certificates
owned by them as of the close of the last day of such month. As a result, a
holder purchasing Certificates may be allocated tax items (which will affect
its tax liability and tax basis) attributable to periods before the actual
transaction.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or
losses of the Trust might be reallocated among the Certificateholders. The
Company is authorized to revise the Trust's method of allocation between
transferors and transferees to conform to a method permitted by future
regulations.
Section 754 Election. In the event that a Certificateholder sells its
Certificates at a profit (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 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.
TRUSTS IN WHICH ALL CERTIFICATES ARE RETAINED BY THE SELLER OR AN AFFILIATE
OF THE SELLER
TAX CHARACTERIZATION OF THE TRUST
Federal Tax Counsel will deliver its opinion that a Trust which issues
one or more classes of Notes to investors and all the Certificates of which
are retained by Seller or an affiliate thereof will not be an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes. This opinion will be based on the assumption that the terms of the
Trust Agreement and related documents will be complied with, and on counsel's
conclusions that the Trust will constitute a mere security arrangement for
the issuance of debt by the single Certificateholder.
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Federal Tax Counsel will, except as
otherwise provided in the related Prospectus Supplement, advise the Trust
that the Notes will be classified as debt for federal income tax purposes.
Assuming such characterization of the Notes is correct, the federal income
tax consequences to Noteholders described above under the heading "TRUSTS FOR
WHICH A PARTNERSHIP ELECTION IS MADE--Tax Consequences to Holders of the
Notes" would apply to the Noteholders.
If, contrary to the opinion of Federal Tax Counsel, the IRS successfully
asserted that one or more classes of Notes did not represent debt for federal
income tax purposes, such class or classes of Notes might be treated as
equity interests in the Trust. If so treated, the Trust might be treated as
a publicly traded partnership taxable as a corporation. Alternatively, and
more likely in the view of Federal Tax Counsel the Trust would most likely be
treated as a publicly traded partnership that would not be taxable as a
corporation because it would meet certain qualifying income tests.
Nonetheless, treatment of Notes as equity interests in such a
partnership could have adverse tax consequences to certain holders of such
Notes. For example, income to certain tax-exempt entities (including pension
funds) would be "unrelated business taxable income", income to foreign
holders may be subject to U.S. withholding tax and U.S. tax return filing
requirements, and individual holders might be subject to certain limitations
on their ability to deduct their share of Trust expenses. In the event one or
more classes of Notes were treated as interests in a partnership, the
consequences governing the Certificates as equity interests in a partnership
described above under "TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE--Tax
Consequences to Holders of the Certificates" would apply to the holders of
such Notes.
TRUSTS TREATED AS GRANTOR TRUSTS
TAX CHARACTERIZATION OF THE TRUST AS A GRANTOR TRUST
If a partnership election is not made, Federal Tax Counsel will deliver
its opinion that the Trust will not be classified as an association taxable
as a corporation and that such Trust will be classified as a grantor trust
under subpart E, Part I 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 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 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
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 eighteen months).
Grantor Trust Certificates will be "evidences of indebtedness" within
the meaning of Section 582(c)(1), so that gain or loss recognized from the
sale of a Grantor Trust Certificate by a bank or a thrift institution to
which such section applies will be treated as ordinary income or loss.
Non-U.S. Persons. Generally, to the extent that a Grantor Trust
Certificate evidences ownership in underlying Receivables that were issued on
or before July 18, 1984, interest or OID paid by the person required to
withhold tax under Section 1441 or 1442 to (i) an owner that is not a U.S.
Person (as defined below) or (ii) a Grantor Trust Certificateholder holding
on behalf of an owner that is not a U.S. Person will be subject to federal
income tax, collected by withholding, at a rate of 30% or such lower rate as
may be provided for interest by an applicable tax treaty. Accrued OID
recognized by the owner on the sale or exchange of such a Grantor Trust
Certificate also will be subject to federal income tax at the same rate.
Generally, such payments would not be subject to withholding to the extent
that a Grantor Trust Certificate evidences ownership in Receivables issued
after July 18, 1984, by natural persons if such Grantor Trust
Certificateholder complies with certain identification requirements
(including delivery of a statement, signed by the Grantor Trust
Certificateholder under penalties of perjury, certifying that such Grantor
Trust Certificateholder is not a U.S. Person and providing the name and
address of such Grantor Trust Certificateholder). Additional restrictions
apply to Receivables of where the obligor is not a natural person in order to
qualify for the exemption from withholding.
As used herein, a "U.S. Person" means a citizen or resident of the
United States, a corporation or a partnership organized in or under the laws
of the United States or any political subdivision thereof, an estate or
trust, the income of which from sources outside the United States is
includible in gross income for federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision of the administration of the trust and one or more United States
fiduciaries have the authority to control all substantial decisions of the
trust.
Information Reporting and Backup Withholding. The Servicer will furnish
or make available, within a reasonable time after the end of each calendar
year, to each person who was a Grantor Trust Certificateholder at any time
during such year, such information as may be deemed necessary or desirable to
assist Grantor Trust Certificateholders in preparing their federal income tax
returns, or to enable holders to make such information available to
beneficial owners or financial intermediaries that hold Grantor Trust
Certificates as nominees on behalf of beneficial owners. If a holder,
beneficial owner, financial intermediary or other recipient of a payment on
behalf of a beneficial owner fails to supply a certified taxpayer
identification number or if the Secretary of the Treasury determines that
such person has not reported all interest and dividend income required to be
shown on its federal income tax return, 31% backup withholding may be
required with respect to any payments. Any amounts deducted and withheld from
a distribution to a recipient would be allowed as a credit against such
recipient's federal income tax liability.
FASIT Legislation. During 1996, President Clinton signed into law the
"Small Business Job Protection Act of 1996" (the "Act"). The Act creates a
new type of entity for federal income tax purposes called a "financial asset
securitization investment trust" or "FASIT." Beginning in September of 1997,
the Act generally enables certain arrangements similar to a trust that is
treated as a partnership to elect to be treated as a FASIT. Under the Act, a
FASIT generally would avoid federal income taxation and could issue
securities substantially similar to the Securities and those securities would
be treated as debt for federal income tax purposes. If so provided in the
related Prospectus Supplement, the Trust Agreement or the Pooling and
Servicing Agreement, as applicable, will permit the Seller or the Trustee to
take the appropriate action, or will set forth certain conditions which, if
satisfied, will permit the Seller to amend such Trust Agreement or Pooling
and Servicing Agreement, in order to enable all or a portion of the Trust to
qualify as a FASIT and to permit a FASIT election to be made with respect
thereto, and to make such modifications to such Trust Agreement or Pooling
and Servicing Agreement as may be permitted by reason of the making of such
an election. However, there can be no assurance that the Seller or the
Trustee will or will not cause any permissible FASIT election to be made with
respect to a Trust or amend the related Trust Agreement or Pooling and
Servicing Agreement in connection with any election. Transition rules
provided for by the FASIT legislation contemplate that the entities in
existence on August 31, 1997 may elect to be taxed under the FASIT rules.
However, how such an election would be made and how outstanding interests of
such entity are to be treated subsequent to the election is not explained in
the FASIT legislation.
CERTAIN STATE TAX CONSEQUENCES
The activities of servicing and collecting the Receivables will be
undertaken throughout the United States by the Servicer, which is a Michigan
corporation. Because of the variation throughout the United States
in each state's tax laws based in whole or in part upon income, it is
impossible to predict tax consequences to holders of Notes and Certificates
in all of the state taxing jurisdictions in which they are already subject
to tax. Noteholders and Certificateholders are urged to consult their own
tax advisors with respect to state tax consequences arising out of the
purchase, ownership and disposition of Notes and Certificates.
* * *
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
NOTEHOLDER'S OR CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND
CERTIFICATES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX
LAWS.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit 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.
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 series and an underwriting agreement with
respect to the Certificates of such series (collectively, the "Underwriting
Agreements"), the Seller will agree to cause the related Trust to sell to the
underwriters named therein and in the related Prospectus Supplement, and each
of such underwriters will severally agree to purchase, the principal amount
of each class of Notes and Certificates, as the case may be, of the related
series set forth therein and in the related Prospectus Supplement.
In each of the Underwriting Agreements with respect to any given series
of Securities, the several underwriters will agree, subject to the terms and
conditions set forth therein, to purchase all the Notes and Certificates, as
the case may be, described therein which are offered hereby and by the
related Prospectus Supplement if any of such Notes and Certificates, as the
case may be, are purchased.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Notes and Certificates, as the case may be, being offered
thereby will be offered to the public and any concessions that may be offered
to certain dealers participating in the offering of such Notes and
Certificates or (ii) specify that the related Notes and Certificates, as the
case may be, are to be resold by the underwriters in negotiated transactions
at varying prices to be determined at the time of such sale. After the
initial public offering of any such Notes and Certificates, such public
offering prices and such concessions may be changed.
Each Underwriting Agreement will provide that the Seller will indemnify
the underwriters against certain civil liabilities, including liabilities
under the Securities Act, or contribute to payments the several underwriters
may be required to make in respect thereof.
Each Trust may, from time to time, invest the funds in its Trust
Accounts in Eligible Investments acquired from such underwriters or from the
Seller.
Pursuant to each Underwriting Agreement with respect to a given series
of Securities, the closing of the sale of any class of Securities subject to
such Underwriting Agreement will be conditioned on the closing of the sale of
all other such classes of Securities of that series.
The place and time of delivery for the Securities in respect of which
this Prospectus is delivered will be set forth in the related Prospectus
Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Securities of any series will be
passed upon for the related Trust and the Seller by the General Counsel of
the Seller.
INDEX OF TERMS
Actuarial Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applicable Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Base Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Calculation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Calculation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CD Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CD Rate Determination Date . . . . . . . . . . . . . . . . . . . . . . . . .
CD Rate Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificate Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificate Distribution Account . . . . . . . . . . . . . . . . . . . . . .
Certificate Pool Factor . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificateholders' Reconciliation Principal Adjustment Amount . . . . . . .
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Paper Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Paper Rate Determination Date . . . . . . . . . . . . . . . . . .
Commercial Paper Rate Security . . . . . . . . . . . . . . . . . . . . . . .
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity Indexed Securities . . . . . . . . . . . . . . . . . . . . . . . .
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Composite Quotations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency Indexed Securities . . . . . . . . . . . . . . . . . . . . . . . . .
Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dealer Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitive Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DTC's Nominee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Deposit Account . . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Institution . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Funds Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Funds Rate Determination Date . . . . . . . . . . . . . . . . . . . .
Federal Funds Rate Security . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Final Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . . . . .
Financed Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Rate Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Value Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Value Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating Rate Securities . . . . . . . . . . . . . . . . . . . . . . . . . .
FTC Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grantor Trust Certificateholders . . . . . . . . . . . . . . . . . . . . . .
Grantor Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . . .
H.15(519) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indexed Commodity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indexed Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indexed Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . .
Indexed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indirect Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insolvency Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest Reset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest Reset Period . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIBOR Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . .
LIBOR Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
London Banking Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money Market Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . .
Note Pool Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noteholders' Reconciliation Principal Adjustment Amount . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OID Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pass Through Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payahead Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payaheads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan Assets Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pooling and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . .
Pre-Funded Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precomputed Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precomputed Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Previously Issued Securities . . . . . . . . . . . . . . . . . . . . . . . .
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reuters Screen LIBO Page . . . . . . . . . . . . . . . . . . . . . . . . . .
Revolving Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rule of 78's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rule of 78's Receivables . . . . . . . . . . . . . . . . . . . . . . . . . .
Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale and Servicing Agreement . . . . . . . . . . . . . . . . . . . . . . . .
Schedule of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1286 Treasury Regulations . . . . . . . . . . . . . . . . . . . . . .
Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Series Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-Term Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Simple Interest Advance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Simple Interest Receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Spread Multiplier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Indexed Securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Strip Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strip Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent Transfer Date . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer and Servicing Agreements . . . . . . . . . . . . . . . . . . . . . .
Treasury bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury Rate Determination Date . . . . . . . . . . . . . . . . . . . . . .
Treasury Rate Security . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Securities
(the "Global Securities") will be available only in book-entry form.
Investors in the Global Securities may hold such Global Securities through
any of DTC, CEDEL or Euroclear. The Global Securities will be tradeable as
home market instruments in both the European and U.S. domestic markets.
Initial settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Offered Notes will be effected on a
delivery-against-payment basis through the respective Depositaries of CEDEL
and Euroclear (in such capacity) and DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet certain
requirements and deliver appropriate U.S. tax documents to the securities
clearing organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions acting on their
behalf as direct and indirect Participants in DTC. As a result, CEDEL and
Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold such positions in accounts
as DTC Participants.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to prior debt issues. Investors'
securities custody accounts will be credited with their holdings against
payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payments in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to book-entry
securities in same-day funds.
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant
to the account of a CEDEL Participant or a Euroclear Participant, the
purchaser will send instructions to CEDEL or Euroclear through a CEDEL
Participant or Euroclear Participant at least one business day prior to
settlement. CEDEL or Euroclear, as applicable, will instruct its Depositary
to receive the Global Securities against payment. Payment will include
interest accrued on the Global Securities from
and including the last coupon payment date to and excluding the settlement
date. Payment will then be made by such Depositary to the DTC Participant's
account against delivery of the Global Securities. After settlement has been
completed, the Global Securities will be credited to the applicable clearing
system and by the clearing system, in accordance with its usual procedures,
to the CEDEL Participant's or Euroclear Participant's account. The Global
Securities credit will appear the next day (European time) and the cash debit
will be back-valued to, and the interest on the Global Securities will accrue
from, the value date (which would be the preceding day when settlement
occurred in New York). If settlement is not completed on the intended value
date (i.e., the trade fails), the CEDEL or Euroclear cash debit will be
valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
pre-position funds for settlement, either from cash on hand or existing lines
of credit, as they would for any settlement occurring within CEDEL or
Euroclear. Under this approach, they may take on credit exposure to CEDEL or
Euroclear until the Global Securities are credited to their accounts one day
later.
As an alternative, if CEDEL or Euroclear has extended a line of credit
to them, CEDEL Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, CEDEL Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for
one day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one-day period may substantially
reduce or offset the amount of such overdraft charges, although this result
will depend on each CEDEL Participant's or Euroclear Participant's particular
cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities
to the respective Depositary for the benefit of CEDEL Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC Participant a cross-market
transaction will settle no differently than a trade between two DTC
Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, CEDEL Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing systems,
through their respective Depositaries, to a DTC Participant. The seller will
send instructions to CEDEL or Euroclear through a CEDEL Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, CEDEL or Euroclear will instruct their respective Depositaries, as
appropriate, to deliver the bonds to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from
and including the last coupon payment date to and excluding the settlement
date. The payment will then be reflected in the account of the CEDEL
Participant or Euroclear Participant the following day, and receipt of the
cash proceeds in the CEDEL Participant's or Euroclear Participant's account
would be back-valued to the value date (which would be the preceding day,
when settlement occurred in New York). Should the CEDEL Participant or
Euroclear Participant have a line of credit with its clearing system and
elect to be in debit in anticipation of receipt of the sale proceeds in its
account, the back-valuation will extinguish any overdraft charges incurred
over that one-day period. If settlement is not completed on the intended
value date (i.e., the trade fails), receipt of the cash proceeds in the CEDEL
Participant's or Euroclear Participant's account would instead be valued as
of the actual settlement date. Finally, day traders that use CEDEL or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to CEDEL Participants or Euroclear Participants should note that
these trades would automatically fail on the sale side unless affirmative
action were taken. At least three techniques should be readily available to
eliminate this potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would
give the Global Securities sufficient time to be reflected in their
CEDEL or Euroclear account in order to settle the sale side of the
trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant
is at least one day prior to the value date for the sale to the CEDEL
Participant or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through CEDEL
or Euroclear (or through DTC if the holder has an address outside the U.S.)
will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business in the chain of intermediaries between such
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (ii) such beneficial owner takes
one of the following steps to obtain an exemption or reduced tax rate:
Exemption of non-U.S. Persons (Form W-8). Beneficial owners of
Offered Notes that are non-U.S. Persons generally can obtain a complete
exemption from the withholding tax by filing a signed Form W-8
(Certificate of Foreign Status). If the information shown on Form W-8
changes, a new Form W-8 must be filed within 30 days of such change.
Exemption for non-U.S. Person with effectively connected income
(Form 4224). A non-U.S. Person, including a non-U.S. corporation or
bank with a U.S. branch, for which the interest income is effectively
connected with its conduct of a trade or business in the United States
can obtain an exemption from the withholding tax by filing Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with
the Conduct of Trade or Business in the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are beneficial owners of
Offered Notes residing in a country that has a tax treaty with the
United States can obtain an exemption or reduced tax rate (depending on
the treaty terms) by filing Form 1001 (Ownership, Exemption or Reduced
Rate Certificate). If the treaty provides only for a reduced rate,
withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the beneficial
owner of Offered Notes or such owner's agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The beneficial owner
of a Global Security or, in the case of a Form 1001 or a Form 4224
filer, such owner's agent, files by submitting the appropriate form to
the person through whom it holds the security (the clearing agency, in
the case of persons holding directly on the books of the clearing
agency). Form W-8 and Form 1001 are effective for three calendar years
and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, or (iv) a trust if a court within the United States
is able to exercise primary supervision of the administration of the trust
and one or more United States fiduciaries have the authority to control all
substantial decisions of the trust. This summary does not deal with all
aspects of U.S. federal income tax withholding that may be relevant to
foreign holders of the Global Securities. Investors are advised to consult
their own tax advisors for specific tax advice concerning their holding and
disposing of the Global Securities.
NO DEALER, SALESPERSON OR $_____________
OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE PREMIER AUTO TRUST
ANY REPRESENTATIONS, OTHER THAN 199_-_
THOSE CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE $___________
RELIED UPON AS HAVING BEEN ____% ASSET BACKED NOTES, CLASS
AUTHORIZED BY THE SELLER OR BY THE A-2
UNDERWRITERS. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO $___________
NOT CONSTITUTE AN OFFER TO SELL, ____% ASSET BACKED NOTES, CLASS
OR A SOLICITATION OF AN OFFER TO A-3
BUY, THE SECURITIES OFFERED HEREBY
TO ANYONE IN ANY JURISDICTION IN $___________
WHICH THE PERSON MAKING SUCH OFFER ____% ASSET BACKED NOTES, CLASS
OR SOLICITATION IS NOT QUALIFIED A-4
TO DO SO OR TO ANYONE TO WHOM IT $__________
IS UNLAWFUL TO MAKE ANY SUCH OFFER ____% ASSET BACKED NOTES, CLASS B
OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, CHRYSLER FINANCIAL CORPORATION
UNDER ANY CIRCUMSTANCES, CREATE AN SELLER AND SERVICER
IMPLICATION THAT INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF
THIS PROSPECTUS SUPPLEMENT OR ---------------------------------
PROSPECTUS.
_______________________ PROSPECTUS SUPPLEMENT
TABLE OF CONTENTS ---------------------------------
PROSPECTUS SUPPLEMENT
PAGE
---- (UNDERWRITERS)
Reports to Noteholders . . . . S-
Summary of Terms . . . . . . . S-
Special Considerations . . . . S-
The Trust . . . . . . . . . . . S-
The Receivables Pool . . . . . S-
Chrysler Financial Corporation S-
Weighted Average Life of
the Notes . . . . . . . . . . S-
Description of the Notes . . . S-
Description of the Transfer
and Servicing Agreements. . . . S-
Certain Federal Income Tax
Consequences. . . . . . . . . S-
ERISA Considerations . . . . . S-
Underwriting . . . . . . . . . S-
Legal Opinions . . . . . . . . S- ------------------------
Index of Terms . . . . . . . . S-
PROSPECTUS DATED ___________, 199_
Available Information . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . .
Summary of Terms . . . . . . . .
Special Considerations . . . . .
The Trusts . . . . . . . . . . .
The Receivables Pools . . . . . .
Weighted Average Life of the
Securities . . . . . . . . . . .
Pool Factors and Trading
Information . . . . . . . . . . .
Use of Proceeds . . . . . . . . .
Chrysler Financial Corporation .
Description of the Notes . . . .
Description of the Certificates .
Certain Information Regarding the
Securities . . . . . . . . . . .
Description of the Transfer and
Servicing Agreements . . . . . .
Certain Legal Aspects of the
Receivables . . . . . . . . . . .
Certain Federal Income Tax
Consequences . . . . . . . . . .
Certain State Tax Consequences
with Respect to Trusts
which Issue one or more Classes
of Notes . . . . . . . . . . . .
ERISA Considerations . . . . . .
Plan of Distribution . . . . . .
Legal Opinions . . . . . . . . .
Index of Terms . . . . . . . . .
Annex I . . . . . . . . . . . A-1
UNTIL 90 DAYS AFTER THE DATE
OF THIS PROSPECTUS SUPPLEMENT, ALL
DEALERS EFFECTING TRANSACTIONS IN
THE NOTES OFFERED BY THIS
PROSPECTUS SUPPLEMENT, WHETHER OR
NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO
DELIVER THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS
OR SUBSCRIPTIONS.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following is an itemized list of the estimated expenses to be
incurred in connection with the offering of the securities being offered
hereunder other than underwriting discounts and commissions.
Registration Fee . . . . . . . . . . . . . . . . . . . . . . $2,424,243.00
Printing Expenses . . . . . . . . . . . . . . . . . . . . . . 225,000.00
Trustee Fees and Expenses . . . . . . . . . . . . . . . . . . 172,500.00
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . 150,000.00
Accountants' Fees and Expenses . . . . . . . . . . . . . . . . 150,000.00
Rating Agencies' Fees . . . . . . . . . . . . . . . . . . . . 1,500,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 257.00
------------
Total . . . . . . . . . . . . . . . . . . . . . . . $4,622,000.00
- ---------------
* 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 person, 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 is or 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 actions or 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.
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 or is an officer or director of such corporation, or is
or was serving at there quest 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 such
person 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 or her 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.
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.
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 Trust Agreement (for issuance of more than one Series of
Certificates) among the Registrant, the Company and the Trustee (including
form of Certificate).
4.4 Form of Pooling and Servicing Agreement, including the Form of
Standard Terms and Conditions of Agreement, among the Registrant, the
Servicer and the Trustee (including forms of Certificates). Filed as Exhibit
4.3 to Registration Statement 33-58942 of Chrysler Financial Corporation and
incorporated herein by reference.
5.1 Opinion of Brown & Wood LLP with respect to legality.
5.2 Opinion of Richards, Layton & Finger with respect to legality.
8.1 Opinion of Brown & Wood LLP with respect to federal tax matters.
23.1 Consent of Brown & Wood LLP (included in its opinions filed as
Exhibits 5.1 and 8.1).
23.2 Consent of Richards, Layton & Finger (included in its opinion
filed as Exhibit 5.2).
*24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The First National Bank of Chicago.
25.2 Form of T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant and the
Trust.
99.2 Form of Administration Agreement among the Trust, the Administrator
and the Indenture Trustee. 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.
______________________________
*Previously filed.
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.
The Registrant hereby undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of that Act.
(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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Southfield and
State of Michigan, on the 31st day of July, 1997.
CHRYSLER FINANCIAL CORPORATION,
by: /s/ T.W. SIDLIK
-----------------------------
Name: T.W. Sidlik
Title: Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer:
/s/ T.W. Sidlik Chairman of the Board July 31, 1997
- -------------------------
T.W. Sidlik
Principal Financial Officer:
/s/ D.M. Cantwell Vice President and Treasurer July 31, 1997
- --------------------------
D.M. Cantwell
Principal Accounting Officer:
/s/ T.F. Gilman Vice President and Controller July 31, 1997
- --------------------------
T.F. Gilman
Signature Title Date
--------- ----- ----
Board of Directors:
* Director July 31, 1997
- -------------------------
T.P. Capo
* Director July 31, 1997
- -------------------------
D.L. Davis
* Director July 31, 1997
- -------------------------
W.J. O'Brien III
* Director July 31, 1997
- -------------------------
T.W. Sidlik
* Director July 31, 1997
- -------------------------
G.C. Valade
*By: /s/ B.C. Babbish
---------------------
B.C. Babbish
Attorney-in-Fact
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
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.
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 Trust Agreement (for issuance of more than one
Series of Certificates) among the Registrant, the Company
and the Trustee (including form of Certificate).
4.4 Form of Pooling and Servicing Agreement, including the Form of
Standard Terms and Conditions of Agreement, among the
Registrant, the Servicer and the Trustee (including forms of
Certificates). Filed as Exhibit 4.3 to Registration Statement
33-58942 of Chrysler Financial Corporation and incorporated
herein by reference.
5.1 Opinion of Brown & Wood LLP with respect to legality.
5.2 Opinion of Richards, Layton & Finger with respect to legality.
8.1 Opinion of Brown & Wood LLP with respect to federal tax
matters.
23.1 Consent of Brown & Wood LLP (included in its opinions filed as
Exhibits 5.1 and 8.1).
23.2 Consent of Richards, Layton & Finger (included in its opinion
filed as Exhibit 5.2).
*24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago.
25.2 Form of T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant and
the Trust.
99.2 Form of Administration Agreement among the Trust, the
Administrator and the Indenture Trustee. 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.
______________________________
*Previously filed.
EXHIBIT 4.1
INDENTURE
between
PREMIER AUTO TRUST 199_-_,
as Issuer
and
_______________________________,
as Indenture Trustee
(Series 199_-_)
Dated as of ______________, 199_
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . 9
ARTICLE II
The Notes
SECTION 2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Execution, Authentication and Delivery . . . . . . . . . . 10
SECTION 2.03. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.04. (Reserved) . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.05. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 12
SECTION 2.07. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . 13
SECTION 2.08. Payment of Principal and Interest; Defaulted
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Release of Collateral . . . . . . . . . . . . . . . . . . 14
SECTION 2.11. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.12. Notices to Clearing Agency . . . . . . . . . . . . . . . . 15
SECTION 2.13. Definitive Notes . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.14. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest . . . . . . . . . . . . 16
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . 16
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . 16
SECTION 3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . 18
SECTION 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . 18
SECTION 3.07. Performance of Obligations; Servicing of
Receivables . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.09. Annual Statement as to Compliance . . . . . . . . . . . . 21
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.11. Successor or Transferee . . . . . . . . . . . . . . . . . 23
SECTION 3.12. No Other Business . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . 23
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . 24
SECTION 3.17. Removal of Administrator . . . . . . . . . . . . . . . . . 24
SECTION 3.18. Restricted Payments . . . . . . . . . . . . . . . . . . . 24
SECTION 3.19. Notice of Events of Default . . . . . . . . . . . . . . . 24
SECTION 3.20. Further Instruments and Acts . . . . . . . . . . . . . . . 24
SECTION 3.21. Other Series of Notes . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . 24
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . 26
SECTION 4.03. Repayment of Moneys Held by Paying Agent . . . . . . . . . 26
ARTICLE V
Remedies
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee . . . . . . . . . . . . . 28
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . . 30
SECTION 5.05. Optional Preservation of the Receivables . . . . . . . . . 31
SECTION 5.06. Limitation of Suits . . . . . . . . . . . . . . . . . . . 32
SECTION 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest . . . . . . . . . . . . . . . . . . 32
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . . 33
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . 33
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . 33
SECTION 5.11. Control by Noteholders . . . . . . . . . . . . . . . . . . 33
SECTION 5.12. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 34
SECTION 5.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . 34
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . . 34
SECTION 5.15. Action on Notes . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.16. Performance and Enforcement of Certain
Obligations . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . 35
SECTION 6.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . 36
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . . 37
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . 37
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.06. Reports by Indenture Trustee to Holders . . . . . . . . . 37
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . 37
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . 38
SECTION 6.09. Successor Indenture Trustee by Merger . . . . . . . . . . 39
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . 40
SECTION 6.12. Preferential Collection of Claims
Against Issuer . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act
Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders . . . . . . . . . . . . . . . . . 41
SECTION 7.02. Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . . 42
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money . . . . . . . . . . . . . . . . . . . 42
SECTION 8.02. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.03. General Provisions Regarding Accounts . . . . . . . . . . 43
SECTION 8.04. Release of Trust Estate . . . . . . . . . . . . . . . . . 44
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.02. Supplemental Indentures with Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . 47
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . 48
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . 48
SECTION 9.06. Reference in Notes to Supplemental Indentures . . . . . . 48
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.02. Form of Redemption Notice . . . . . . . . . . . . . . . . 49
SECTION 10.03. Notes Payable on Redemption Date . . . . . . . . . . . . . 49
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. . . . . . . . . 49
SECTION 11.02. Form of Documents Delivered to Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.03. Acts of Noteholders . . . . . . . . . . . . . . . . . . . 52
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.05. Notices to Noteholders; Waiver . . . . . . . . . . . . . . 53
SECTION 11.06. Alternate Payment and Notice Provisions . . . . . . . . . 53
SECTION 11.07. Conflict with Trust Indenture Act . . . . . . . . . . . . 53
SECTION 11.08. Effect of Headings and Table of Contents . . . . . . . . . 54
SECTION 11.09. Successors and Assigns . . . . . . . . . . . . . . . . . . 54
SECTION 11.10. Separability . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . 54
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . . 54
SECTION 11.16. Trust Obligation . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.17. No Petition . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . . 55
SCHEDULE A - Schedule of Receivables
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
EXHIBIT A-4 - Form of Class A-4 Note
EXHIBIT A-5 - Form of Class B Note
EXHIBIT B - Form of Note Depository Agreement
INDENTURE dated as of ______________, 199_, between PREMIER AUTO TRUST
199_-_, a Delaware business trust (the "Issuer"), and
_________________________________, a _____________________, as trustee
and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1
_________% Asset Backed Notes (, Series 199_-_) (the "Class A-1 Notes"),
Class A-2 ________% Asset Backed Notes (, Series 199_-_) (the "Class A-2
Notes"), Class A-3 ________% Asset Backed Notes (, Series 199_-_) (the
"Class A-3 Notes"), Class A-4 ______% Asset Backed Notes (, Series 199_-_)
(the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes, the "Class A Notes"), and Class B ______%
Asset Backed Notes (, Series 199_-_) (the "Class B Notes" and, together with
the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to (a) the Receivables and all
moneys received thereon on and after ____________, 199_; (b) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in such Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on any physical
damage, credit life or disability insurance policies covering Financed
Vehicles or Obligors; (d) any proceeds with respect to the Receivables from
recourse to Dealers thereon with respect to which the Servicer has determined
in accordance with its customary servicing procedures that eventual payment
in full is unlikely; (e) any Financed Vehicle that shall have secured a
Receivable and that shall have been acquired by or on behalf of the Seller,
the Servicer, the Company or the Issuer; (f) all funds on deposit from time
to time in the Trust Accounts, including the Reserve Account Initial Deposit,
and in all investments and proceeds thereof (including all income thereon);
(g) the Sale and Servicing Agreement (including the Issuer's right to cause
the Seller to repurchase Standard Receivables or Fixed Value Receivables from
the Issuer under certain circumstances described therein); and (h) all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.
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 Financial Corporation, a Michigan
-------------
corporation, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
---------
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
------------------
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any
Vice President or more senior officer of the Administrator who is authorized
to act for the Administrator in matters relating to the Issuer and to be
acted upon by the Administrator pursuant to the Administration Agreement and
who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
---------------
the Sale and Servicing Agreement, the Purchase Agreement, the Administration
Agreement, the Note Depository Agreement and other documents and certificates
delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class A-1 Notes,
----------------
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"Business Day" means any day other than a Saturday, a Sunday or a day
------------
on which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to remain
closed.
"Certificate of Trust" means the certificate of trust of the Issuer
--------------------
substantially in the form of Exhibit B to the Trust Agreement.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
-------------
Notes and Class A-4 Notes.
"Class A-1 Interest Rate" means ________% per annum (computed on the
-----------------------
basis of the actual number of days in the Interest Accrual Period divided by
360).
"Class A-1 Notes" means the Class A-1 _________% Asset Backed Notes,
---------------
(Series 199_-_,) 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,
---------------
(Series 199_-_,) substantially in the form of Exhibit A-2.
"Class A-3 Interest Rate" means _____% per annum (computed on the basis
-----------------------
of a 360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 ______% Asset Backed Notes,
---------------
substantially in the form of Exhibit A-3.
"Class A-4 Interest Rate" means _____% per annum (computed on the basis
-----------------------
of a 360-day year consisting of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 ______% Asset Backed Notes,
---------------
(Series 199_-_,) substantially in the form of Exhibit A-4.
"Class B Interest Rate" means _______% per annum (computed on the basis
---------------------
of a 360-day year consisting of twelve 30-day months).
"Class B Notes" means the Class B _______% Asset Backed Notes, (Series
-------------
199_-_,) substantially in the form of Exhibit A-5.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means _________________, 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 _________________, a ___________, any successor in
-------
interest and any transferee of the Rights (as defined in the Purchase
Agreement) that becomes such transferee in accordance with Section 5.06 of
the Purchase Agreement.
"Corporate Trust Office" means the principal office of the Indenture
----------------------
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Agreement is
located at _________________________________________, Attention:
__________________________, or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders and the Issuer,
or the principal corporate trust office of any successor Indenture Trustee at
the address designated by such successor Indenture Trustee by notice to the
Noteholders and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of
-------
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.11.
----------------
"Event of Default" has the meaning specified in Section 5.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Executive Officer" means, with respect to any corporation, the Chief
-----------------
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Grant" means mortgage, pledge, bargain, warrant, alienate, remise,
-----
release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party
is or may be entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
------ ----------
registered on the Note Register.
"Indenture Trustee" means _________________________________, a ________
-----------------
__________________, as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person,
-----------
that the Person (a) is in fact independent of the Issuer, any other obligor
on the Notes, the Seller and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
-----------------------
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Interest Accrual Period" means, with respect to any Distribution Date
-----------------------
and the Notes, the period from and including the sixth day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) to and including the fifth day of the
month of such Distribution Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
-------------
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate or
the Class B 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" or "Issuer Request" means a written order or request
------------ --------------
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
----
Class A-4 Note or a Class B 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-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes and the Class B Notes, substantially in the form of Exhibit B.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
----------
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
------------- --------------
specified in Section 2.05.
"Officer's Certificate" means a certificate signed by any Authorized
---------------------
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered
to the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
------------------
may, except as otherwise expressly provided in this Indenture, be an employee
of or counsel to the Issuer and who shall be satisfactory to the Indenture
Trustee, and which opinion or opinions shall be addressed to the Indenture
Trustee as Indenture Trustee, shall comply with any applicable requirements
of Section 11.01 and shall be in form and substance satisfactory to the
Indenture Trustee.
"Outstanding" means, as of the date of determination, all Notes
-----------
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Basic Document, Notes owned by the Issuer, any other obligor upon the Notes,
the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
------------------
or Class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means __________________________, not in its individual
-------------
capacity but solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
------------
meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Note Distribution Account,
including payments of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" means a Distribution Date.
------------
"Person" means any individual, corporation, estate, partnership, joint
------
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
----------------
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
----------
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of
------------------
______________, 199_, between the Seller and the Company.
"Rating Agency Condition" means, with respect to any action, that each
-----------------------
Rating Agency shall have been given 10 days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer and the Issuer
in writing that such action will not result in a reduction or withdrawal of
the then current rating of the Notes.
"Rating Agency" means Moody's Investor's Service ("Moody's") and
-------------
Standard & Poor's Ratings Services ("Standard & Poor's"). If no such
organization or successor is any longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization or other
comparable Person designated by the Issuer, notice of which designation shall
be given to the Indenture Trustee, the Owner Trustee and the Servicer. Any
notice required to be given to a Rating Agency pursuant to this Agreement
shall also be given to Fitch Investors Service, L.P. and Duff & Phelps Credit
Rating Co., although, except as set forth above, neither shall be deemed to
be a Rating Agency for any purposes of this Agreement.
"Record Date" means, with respect to a Distribution Date or Redemption
-----------
Date, the close of business on the day immediately preceding such
Distribution Date or Redemption Date or, if Definitive Notes have been issued
pursuant to Section 2.13, the 15th day of the preceding month.
"Redemption Date" means, in the case of a redemption of the Notes
---------------
pursuant to Section 10.01, the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.01.
"Redemption Price" means in connection with a redemption of the Notes
----------------
pursuant to Section 10.01, an amount equal to the unpaid principal amount of
the Notes redeemed plus accrued and unpaid interest thereon at the weighted
average of the Interest Rates for each Class of Notes being so redeemed to
but excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is registered
-----------------
on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
-------------------
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
----------------------------
dated as of ______________, 199_, between the Issuer and Chrysler Financial
Corporation, as Seller and Servicer.
"Schedule of Receivables" means the list of the Standard Receivables and
-----------------------
the Fixed Value Receivables set forth in Schedule A (which Schedule may be in
the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" means Chrysler Financial Corporation, in its capacity as seller
------
under the Sale and Servicing Agreement, and its successor in interest.
"Servicer" means Chrysler Financial Corporation, in its capacity as
--------
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"State" means any one of the 50 States of the United States of America
-----
or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
------------------
"Telerate Page 3750" means the page so designated on the Dow Jones
------------------
Telerate Service or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor, for the
purpose of displaying London interbank offered rates of major banks.
"Trust Estate" means all money, instruments, rights and other property
------------
that are subject or intended to be subject to the lien and security interest
of this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
------------------- ---
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
---
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein
have the respective meanings set forth in the Sale and Servicing Agreement
for all purposes of this Indenture.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
The Notes
---------
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the
----
Class A-3 Notes, the Class A-4 Notes and the Class B Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be
in substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3,
Exhibit A-4 and Exhibit A-5, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and
Exhibit A-5 are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
--------------------------------------
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$_____________, Class A-2 Notes for original issue in an aggregate principal
amount of $_______________, Class A-3 Notes for original issue in an
aggregate principal amount of $_____________, Class A-4 Notes for original
issue in an aggregate principal amount of $_____________, and Class B Notes
for original issue in an aggregate principal amount of $_____________. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes and Class B Notes outstanding at any time may not
exceed such respective amounts except as provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000
and in integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of
the tenor of the definitive Notes in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Issuer shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.04. (Reserved)
SECTION 2.05. Registration; Registration of Transfer and Exchange.
---------------------------------------------------
The Issuer shall cause to be kept a register (the "Note Register") in which
the Issuer shall provide for the registration of Notes and the registration
of transfers of Notes. The Indenture Trustee initially shall be the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer
shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(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 the
Note.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
------------------------------------------
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall
be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
--------------------
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether
or not such Note be overdue, and none of the Issuer, the Indenture Trustee or
any agent of the Issuer or the Indenture Trustee shall be affected by notice
to the contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.
-----------------------------------------------------
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes shall accrue interest at the Class A-1
Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the
Class A-4 Interest Rate and the Class B Interest Rate, respectively, as set
forth in Exhibits A-1, A-2, A-3, A-4 and A-5, respectively, and such interest
shall be payable on each Distribution Date as specified therein, subject to
Section 3.01. Any installment of interest or principal payable on a Note
that is punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the Record Date by check mailed
first-class postage prepaid to such Person's address as it appears on the
Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.13, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee and
except for the final installment of principal payable with respect to such
Note on a Distribution Date or on the applicable class final scheduled
Distribution Date (and except for the Redemption Price for any Note called
for redemption pursuant to Section 10.01) which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall
be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in
Exhibits A-1, A-2, A-3, A-4 and A-5. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Indenture Trustee or Holders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02. All principal payments on each Class of Notes
shall be made pro rata to the Noteholders of such Class entitled thereto.
The Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be
mailed or transmitted by facsimile prior to such final Distribution Date and
shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for payment of such installment.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders
on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
a notice that states the special record date, the payment date and the amount
of defaulted interest to be paid.
SECTION 2.09. Cancellation. All Notes surrendered for payment,
------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Notes may be held or disposed of by the Indenture Trustee in accordance with
its standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided, that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.01 and the
---------------------
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and
Independent Certificates in accordance with TIA SectionSection 314(c) and
314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates
to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.11. Book-Entry Notes. The Notes, upon original issuance,
----------------
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Owner thereof will receive a
definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.13. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant
to Section 2.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 2.13,
the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect from
Note Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.13. Definitive Notes. If (i) the Administrator advises the
----------------
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-
Entry Notes and the Administrator is unable to locate a qualified successor,
(ii) the Administrator at its option advises the Indenture Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency
or (iii) after the occurrence of an Event of Default or a Servicer Default,
Owners of the Book-Entry Notes representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such Note
Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability
of Definitive Notes to Note Owners requesting the same. Upon surrender to
the Indenture Trustee of the typewritten Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
SECTION 2.14. Tax Treatment. The Issuer has entered into this
-------------
Indenture, and the Notes will be issued, with the intention that, for all
purposes including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness 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 all purposes including federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III
Covenants
---------
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
---------------------------------
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing
Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2
Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders, (iv) for the benefit of the Class A-4 Notes, to the Class A-4
Noteholders and (v) for the benefit of the Class B Notes, to the Class B
Noteholders; provided that on any Distribution Date no payment shall be made
on the Class B Notes until payments then due on the Class A Notes have been
made. Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of interest and/or principal shall be considered as having
been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
--------------------------------------
Section 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.02(c) shall
be made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day preceding each Distribution Date and
Redemption Date, the Issuer shall deposit or cause to be deposited in the
Note Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge
in the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Paying Agent, before being required to
make any such repayment, shall at the expense and direction of the Issuer
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Indenture Trustee shall also adopt and employ, at
the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the
State of __________ (unless it becomes, or any successor Issuer hereunder is
or becomes, organized under the laws of any other State or of the United
States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction)
and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes, the Collateral
and each other instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time
--------------------------
to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date,
---------------------------
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been
taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) On or before March 31, in each calendar year, beginning in ______,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been
taken with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the lien
and security interest created by this Indenture and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
March 31 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Sale and Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer and the Administrator
to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee or the Holders of at least a majority of
the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect
to such default. If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take
all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01
of the Sale and Servicing Agreement, the Issuer shall appoint a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in
such event will be released from such duties and obligations, such release
not to be effective until the date a new servicer enters into a servicing
agreement with the Issuer as provided below. Upon delivery of any such
notice to the Issuer, the Issuer shall obtain a new servicer as the Successor
Servicer under the Sale and Servicing Agreement. Any Successor Servicer
other than the Indenture Trustee shall (i) be an established financial
institution having a net worth of not less than $100,000,000 and whose
regular business includes the servicing of Contracts and (ii) enter into a
servicing agreement with the Issuer having substantially the same provisions
as the provisions of the Sale and Servicing Agreement applicable to the
Servicer. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new servicer, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a Successor Servicer. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations
set forth below and in the Sale and Servicing Agreement, and in accordance
with Section 8.02 of the Sale and Servicing Agreement, the Issuer shall enter
into an agreement with such successor for the servicing of the Receivables
(such agreement to be in form and substance satisfactory to the Indenture
Trustee). If the Indenture Trustee shall succeed to the Servicer's duties as
servicer of the Receivables as provided herein, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Servicer any one of its
affiliates, provided that it shall be fully liable for the actions and
omissions of such affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least
a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Seller under the Sale and Servicing Agreement; and (ii) that
any such amendment shall not (A) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, distributions that are required to
be made for the benefit of the Noteholders or (B) reduce the aforesaid
percentage of the Notes that is required to consent to any such amendment,
without the consent of the Holders of all the Outstanding Notes. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee or such Holders, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
------------------
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange
or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so
by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code) or assert any claim
against any present or former Noteholder by reason of the payment of the
taxes levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that
arise by operation of law, in each case on any of the Financed Vehicles
and arising solely as a result of an action or omission of the related
Obligor) or (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
---------------------------------
deliver to the Indenture Trustee, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year 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) Except as otherwise contemplated by Section 3.21, the Issuer shall
not convey or transfer any of its properties or assets, including those
included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and
(E) expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse federal
income or Michigan income or single business tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation
-----------------------
or merger of the Issuer in accordance with Section 3.10(a), the Person formed
by or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under this Indenture with the same effect as if such Person
had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Premier Auto Trust 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.
SECTION 3.12. No Other Business. Except as otherwise contemplated by
-----------------
Section 3.21, the Issuer shall not engage in any business other than
financing, purchasing, owning, selling and managing the Standard Receivables
and Fixed Value Receivables in the manner contemplated by this Indenture and
the Basic Documents and activities incidental thereto. The Issuer shall not
fund the purchase of any new Contracts.
SECTION 3.13. No Borrowing. Except as otherwise contemplated by
------------
Section 3.21, 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
(including Section 3.21), the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having
the effect of assuring another's payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any other
Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
------------------------
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
-------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest
or security or (iii) set aside or otherwise segregate any amounts for any
such purpose; provided, however, that the Issuer may make, or cause to be
made, (x) distributions as contemplated by, and to the extent funds are
available for such purpose under, the Sale and Servicing Agreement or the
Trust Agreement and (y) payments to the Indenture Trustee pursuant to
Section 1(a)(ii) of the Administration Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
---------------------------
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller
of its obligations under the Sale and Servicing Agreement and each default on
the part of the Company or the Seller of its obligations under the Purchase
Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
(SECTION 3.21. Issuance of Additional Series of Notes. The Issuer may,
--------------------------------------
at its election from time to time, issue one or more additional series of
notes that are secured motor vehicle retail installment sale contracts (or
securities based thereon) other than the Contracts and the Receivables. The
Noteholders hereby acknowledge and agree that they have no interest in or
claim on (directly or indirectly) the collateral or the trust estate (or any
asset thereof) that secures such additional series of notes.
The Issuer shall not issue any additional series of notes unless:
(i) immediately after giving effect to such issuance, no Default or
Event of Default shall have occurred and be continuing;
(ii) the Rating Agency Condition shall have been satisfied with respect
to such issuance;
(iii) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will not have any material adverse federal income or
Michigan income or single business tax consequence to the Issuer, any
Noteholder or any Certificateholder;
(iv) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that the
issuance of such additional series of notes satisfies the conditions of this
Section 3.21.)
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall cease to be of further effect with respect to the Notes except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon,
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.06 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
a. have become due and payable,
b. will become due and payable at the Class B Final
Scheduled Distribution Date within one year, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount sufficient
to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due
to the applicable final scheduled Distribution Date or Redemption Date
(if Notes shall have been called for redemption pursuant to
Section 10.01), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of
Section 11.01(a) and, subject to Section 11.02, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes
for the payment or redemption of which such moneys have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall
be released from all further liability with respect to such moneys.
ARTICLE V
Remedies
--------
SECTION 5.01. Events of Default. "Event of Default", wherever used
-----------------
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of ( ); (provided that a default in the payment of interest
on the Class B Notes shall not be an Event of Default until the
Outstanding Amount of the Class A-4 Notes has been reduced to zero); or
(ii) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition
in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of
30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the Trust Estate, or ordering the winding-up
or liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
--------------------------------------------------
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Holders of Notes representing not less than
a majority of the Outstanding Amount of the Notes may declare all the Notes
to be immediately due and payable, by a notice in writing to the Issuer (and
to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided,
the Holders of Notes representing a majority of the Outstanding Amount of the
Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee. (a) The Issuer covenants that if (i) default is made
- -----------------
in the payment of any interest on any Note when the same becomes due and
payable, and such default continues for a period of five days, or
(ii) default is made in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable, the Issuer
will, upon demand of the Indenture Trustee, pay to it, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest on the overdue principal and, to the
extent payment at such rate of interest shall be legally enforceable, on
overdue installments of interest at the rate borne by the Notes and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable; provided that, in the case of a default in
the payment of interest on the Class B Notes, the Indenture Trustee shall not
institute such Proceeding unless the Outstanding Amount of the Class A-4
Notes has been reduced to zero.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or such
other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Holders of the Notes, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default
--------------------
shall have occurred and be continuing, the Indenture Trustee may do one or
more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.01(i) or (ii), unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds
of such sale or liquidation distributable to the Noteholders are sufficient
to discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of 662/3% of the Outstanding Amount of the
Notes. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under
Section 6.07;
SECOND: to Holders of the Class A Notes for amounts due and
unpaid on the Class A Notes for interest (including any premium),
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Class A Notes for interest (including any
premium);
THIRD: to the Class A Noteholders in the following order of
priority:
(a) to Holders of the Class A-1 Notes for amounts due and unpaid
on the Class A-1 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-1 Notes for principal, until the Outstanding Amount of the
Class A-1 Notes is reduced to zero;
(b) to Holders of the Class A-2 Notes for amounts due and unpaid
on the Class A-2 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-2 Notes for principal, until the Outstanding Amount of the Class
A-2 Notes is reduced to zero;
(c) to Holders of the Class A-3 Notes for amounts due and unpaid
on the Class A-3 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-3 Notes for principal, until the Outstanding Amount of the Class
A-3 Notes is reduced to zero;
(d) to Holders of the Class A-4 Notes for amounts due and unpaid
on the Class A-4 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-4 Notes for principal, until the Outstanding Amount of the Class
A-4 Notes is reduced to zero;
FOURTH: to Holders of the Class B Notes for amounts due and unpaid
on the Class B Notes for interest (including any premium), ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Class B Notes for interest (including any premium);
FIFTH: to Holders of the Class B Notes for amounts due and unpaid
on the Class B Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class B Notes for principal, until the Outstanding Amount of the Class B
Notes is reduced to zero; and
SIXTH: to the Issuer for distribution pursuant to the Trust
Agreement.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be
paid.
((c) Notwithstanding anything in this Indenture to the contrary, the
Indenture Trustee and the Noteholders (in their respective capacities as
such) shall not (i) have any rights in or claims on the collateral or trust
estate (or any asset thereof) (collectively, "Unavailable Collateral") that
the Issuer has Granted in order to secure any additional series of notes
issued or to be issued by the Issuer or (ii) exercise or attempt to exercise
any remedies to realize upon such Unavailable Collateral.)
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
----------------------------------------
have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Trust Estate. It is the desire of the parties
hereto and the Noteholders that there be at all times sufficient funds for
the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not
to maintain possession of the Trust Estate. In determining whether to
maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of
the Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
--------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the
- ------------
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date)
and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder; provided that,
until the Outstanding Amount of the Class A-4 Notes has been reduced to zero,
the Holder of any Class B Note shall have the right to receive payment of
principal and interest due on such Class B Note only to the extent that there
are funds in the Note Distribution Account after applying the funds therein
to the payment of all principal and interest then due on the Class A Notes.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission
------------------------------
of the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of
----------------------
the Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount
of the Notes to sell or liquidate the Trust Estate shall be of no force
and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
-----------------------
the acceleration of the maturity of the Notes as provided in Section 5.02,
the Holders of Notes of not less than a majority of the Outstanding Amount of
the Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of a Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group
of Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion
of the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
--------------------------------------------------
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller or the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement or by the Seller or the Company, as applicable, of each of their
obligations under or in connection with the Purchase Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 662/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, or against the Company or the Seller under or in connection with
the Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer, or
the Company or the Seller, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale and Servicing Agreement or the
Purchase Agreement, as the case may be, and any right of the Issuer to take
such action shall be suspended.
ARTICLE VI
The Indenture Trustee
---------------------
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of
---------------------------
Default has occurred and is continuing, the Indenture Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree
of care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture
---------------------------
Trustee may rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or
for the supervision of, any such agent, attorney, custodian or nominee
appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
------------------------------
shall not be responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note), the Indenture Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall, or shall
--------------------------
cause the Administrator to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Issuer shall, or shall cause the Administrator to,
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Issuer shall, or
shall cause the Administrator to, indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it
in connection with the administration of this trust and the performance of
its duties hereunder. The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer and the Administrator shall
not relieve the Issuer or the Administrator of its obligations hereunder.
The Issuer shall, or shall cause the Administrator to, defend any such claim,
and the Indenture Trustee may have separate counsel and the Issuer shall, or
shall cause the Administrator to, pay the fees and expenses of such counsel.
Neither the Issuer nor the Administrator need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified
in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
--------------------------------
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under
Section 6.07 shall continue for the benefit of the retiring Indenture
Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
-------------------------------------
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall
provide the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
---------------------------------------------------------
Trustee. (a) Notwithstanding any other provisions of this Indenture, at
- -------
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust Estate may at the time be
located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee
or co-trustees, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Trust Estate, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-
trustee or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
-----------------------------
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition, and the time deposits of the Indenture Trustee shall be rated at
least A-1 by Standard & Poor's and P-1 by Moody's. The Indenture Trustee
shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA
Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
-----------------------------------------------------
The Indenture Trustee shall use its best efforts to maintain the
effectiveness of all licenses required under the Pennsylvania Motor Vehicle
Sales Finance Act in connection with this Indenture and the transactions
contemplated hereby until the lien and security interest of this Indenture
shall no longer be in effect in accordance with the terms hereof.
ARTICLE VII
Noteholders' Lists and Reports
------------------------------
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer will furnish or cause to be furnished to the
- --------------
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, and (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
----------------------------------------------
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
- -----------
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
-----------------
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA
----------------------------
Section 313(a), within 60 days after each February 1 beginning with February
1, _______, 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 pursuant to Sections 5.06 and 5.07 of the Sale and
Servicing Agreement will be transferred from the Collection Account and/or
the Reserve Account to the Note Distribution Account.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders in respect of the Notes to the extent of amounts due
and unpaid on the Notes for principal and interest (including any premium) in
the following amounts and in the following order of priority (except as
otherwise provided in Section 5.04(b); provided that if any amount withdrawn
from the Reserve Account has been allocated to pay interest on the Class B
Notes pursuant to clause second of the proviso to Section 5.07(c)(i) of the
Sale and Servicing Agreement, then such amount shall be applied pursuant to
clause (iii) below):
(i) accrued and unpaid interest on the Class A Notes; provided,
that if there are not sufficient funds in the Note Distribution Account
to pay the entire amount of accrued and unpaid interest then due on the
Class A Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on the Class A Notes pro rata on
the basis of the total such interest due on the Class A Notes;
(ii) the Noteholders' Principal Distributable Amount in the
following order of priority:
(1) to the Holders of the Class A-1 Notes on account of
principal until the Outstanding Amount of the Class A-1 Notes is
reduced to zero;
(2) to the Holders of the Class A-2 Notes on account of
principal until the Outstanding Amount of the Class A-2 Notes is
reduced to zero;
(3) to the Holders of the Class A-3 Notes on account of
principal until the Outstanding Amount of the Class A-3 Notes is
reduced to zero;
(4) to the Holders of the Class A-4 Notes on account of
principal until the Outstanding Amount of the Class A-4 Notes is
reduced to zero;
(iii) accrued and unpaid interest on the Class B Notes; and
(iv) the Noteholders' Principal Distributable Amount (less any
portion thereof distributed on such Distribution Date pursuant to clause
(ii) above) to the Class B Noteholders until the Outstanding Amount of
the Class B Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long
-------------------------------------
as no Default or Event of Default shall have occurred and be continuing, all
or a portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee (or the investment
manager referred to in clause (2) of Section 5.01(b) of the Sale and
Servicing Agreement) upon Issuer Order, subject to the provisions of
Section 5.01(b) of the Sale and Servicing Agreement. All income or other
gain from investments of moneys deposited in the Trust Accounts shall be
deposited by the Indenture Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to such account. The Issuer
will not direct the Indenture Trustee to make any investment of any funds or
to sell any investment held in any of the Trust Accounts unless the security
interest Granted and perfected in such account will continue to be perfected
in such investment or the proceeds of such sale, in either case without any
further action by any Person, and, in connection with any direction to the
Indenture Trustee to make any such investment or sale, if requested by the
Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c) If (i) the Issuer (or the Servicer or any investment manager
pursuant to Section 5.01(b) of the Sale and Servicing Agreement) shall have
failed to give investment directions for any funds on deposit in the Trust
Accounts to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other
time as may be agreed by the Issuer and Indenture Trustee) on any Business
Day or (ii) a Default or Event of Default shall have occurred and be
continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02 or (iii) if such Notes
shall have been declared due and payable following an Event of Default but
amounts collected or receivable from the Trust Estate are being applied in
accordance with Section 5.05 as if there had not been such a declaration,
then the Indenture Trustee shall, to the fullest extent practicable, invest
and reinvest funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment
-----------------------
of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may,
and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey
the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in accordance with TIA
SectionSection 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that
promptly following the Closing Date and each Transfer Date the Indenture
Trustee shall release the lien of this Indenture on each Fixed Value Payment
assigned by the Issuer to the Seller, and consents to such release.
(d) Upon the written notification from the Servicer pursuant to Section
5.06(a)(ii)(D) or 5.06(c) of the Sale and Servicing Agreement, on the related
Distribution Date the Issuer shall deliver to the Indenture Trustee an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in accordance with TIA
SectionSection 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01, and upon its receipt of such items on such Distribution Date
the Indenture Trustee shall deposit the Cash Release Amount (to the extent of
funds available pursuant to Section 5.06(a)(ii)(D) of the Sale and Servicing
Agreement) in the Certificate Distribution Account and release from the lien
of this Indenture the Receivables to be so released pursuant to Section
5.06(c) of the Sale and Servicing Agreement.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
------------------
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.04(c), as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such
action will not materially and adversely impair the security for the Notes or
the rights of the Noteholders in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate.
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes but with prior notice
to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized
by an Issuer Order, at any time and from time to time, may enter into one or
more indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture; provided, that such
action shall not adversely affect the interests of the Holders of the
Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.
---------------------------------------------------
The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of
the Holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after
the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes contained herein;
or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and immunities under this Indenture of the Indenture Trustee, the Issuer and
the Holders of the Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment
-----------------------------------
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
-------------------
SECTION 10.01. Redemption. The Class A-4 Notes and the Class B Notes
----------
are subject to redemption in whole, but not in part, at the direction of the
Servicer pursuant to Section 9.01(a) of the Sale and Servicing Agreement, on
any Distribution Date on which the Servicer exercises its option to purchase
the Trust Estate pursuant to said Section 9.01(a), for a purchase price equal
to the Redemption Price; provided that the Issuer has available funds
sufficient to pay the Redemption Price. The Servicer or the Issuer shall
furnish the Rating Agencies notice of such redemption. If the Class A-4
Notes and the Class B Notes are to be redeemed pursuant to this Section, the
Servicer or the Issuer shall furnish notice of such election to the Indenture
Trustee not later than 20 days prior to the Redemption Date and the Issuer
shall deposit by 10:00 A.M. New York City time on the Redemption Date with
the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Class A-4 Notes and the Class B Notes to be redeemed, whereupon all
such Class A-4 Notes and Class B Notes shall be due and payable on the
Redemption Date upon the furnishing of a notice complying with Section 10.02
to each Holder of the Notes.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
-------------------------
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each Holder of Notes, as of the
close of business on the Record Date preceding the applicable Redemption
Date, at such Holder's address or facsimile number appearing in the Note
Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of
the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
--------------------------------
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
Miscellaneous
-------------
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon
-----------------------------------------
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed
in Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien of
this Indenture since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.10 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Receivables and Financed Vehicles as and to the
extent permitted or required by the Basic Documents, (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
_____________, 199_, an Officer's Certificate of the Issuer stating that
all the dispositions of Collateral described in clauses (A), (B) or (C)
above that occurred during the preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof
were applied in accordance with the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In
------------------------------------------------
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of
such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
-------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee
and, where it is hereby expressly required, to the Issuer. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent,
- --------
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at its Corporate Trust
Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: Premier Auto
Trust 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 Services, a division of The McGraw-Hill Companies, Inc., 25
Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department, (iii) in the case of Fitch Investors Service, L.P.,
at the following address: One State Street Plaza, New York, N.Y. 10004, and
(iv) in the case of Duff & Phelps Credit Rating Co., at the following
address: 17 State Street, 12th Floor, New York, N.Y. 10004; or as to each of
the foregoing, at such other address as shall be designated by written notice
to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event
of Default.
SECTION 11.06. Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices. The Issuer will furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with
such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is--
- ------------------------------- required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision
shall control.
The provisions of TIA SectionSection 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
----------------------
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
----------------------
to recording in any appropriate public recording offices, such recording is
to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly
----------------
or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
-----------
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Company or the
Issuer, or join in any institution against the Company or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
----------
notice, it will permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives
to, hold in confidence all such information except to the extent disclosure
may be required by law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the Indenture Trustee
may reasonably determine that such disclosure is consistent with its
obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
PREMIER AUTO TRUST 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: ___________________________
SCHEDULE A
Provided to the Owner Trustee at Closing
EXHIBIT A-1
(FORM OF CLASS A-1 NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO. ___________
PREMIER AUTO TRUST 199_-_
(SERIES 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 Cede & Co., or registered assigns,
the principal sum of TWO HUNDRED MILLION DOLLARS payable on each Distribution
Date in an amount equal to the result obtained by multiplying (i) a fraction
the numerator of which is $________________ 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_ (the
"Indenture"), between the Issuer and _________________________________, a
national banking association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the _______________ 199_ Distribution Date (the "Class
A-1 Final Scheduled Distribution Date"). Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the sixth
day of the month preceding the month of such Distribution Date (in the case
of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed
on the basis of the actual number of days in the Interest Accrual Period
divided by 360. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: PREMIER AUTO TRUST 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
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 _______% Asset (, Series 199__) Backed Notes
(herein called the "Class A-1 Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-
1 Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture, subject to the subordination of the Class B Notes
as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means
the sixth 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 Class A-1 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the
Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to
be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Distribution Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed or transmitted by facsimile prior to such Distribution Date,
and the amount then due and payable shall be payable only upon presentation
and surrender of this Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth
therein and on the face hereof, the transfer of this Note may be registered
on the Note Register upon surrender of this Note for registration of transfer
at the office or agency designated by the Issuer pursuant to the Indenture,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents.
(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
(in their capacities as such) shall not (i) have any rights in or claims on
the collateral or trust estate (or any asset thereof) (collectively,
"Unavailable Collateral") that the Issuer has granted in order to secure any
additional series of notes issued or to be issued by the Issuer or (ii)
exercise or attempt to exercise any remedies to realize upon such Unavailable
Collateral.)
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.
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 failure to perform, any of the covenants, obligations
or indemnifications contained in the Indenture. The Holder of this Note by
its acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
- --------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________________________________
_______________________________________, attorney, 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.
EXHIBIT A-2
(FORM OF CLASS A-2 NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO. ____________
PREMIER AUTO TRUST 199_-_
CLASS A-2 ______% ASSET BACKED NOTES
(SERIES 199_-_)
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 $____________ 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_ (the "Indenture"), between the Issuer and
_________________________________, a national banking association, as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
__________ Distribution Date (the "Class A-2 Final Scheduled Distribution
Date"). No payments of principal of the Class A-2 Notes shall be made until
the Class A-1 Notes have been paid in full. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the sixth
day of the month preceding the month of such Distribution Date (in the case
of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of
and interest on this Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: PREMIER AUTO TRUST 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
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 ______% Asset Backed Notes(, Series 199_-_)
(herein called the "Class A-2 Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-
2 Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture, subject to the subordination of the Class B Notes
as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means
the sixth 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 Class A-2 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the
Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to
be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Distribution Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed or transmitted by facsimile prior to such Distribution Date,
and the amount then due and payable shall be payable only upon presentation
and surrender of this Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents.
(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
(in their capacities as such) shall not (i) have any rights in or claims on
the collateral or trust estate (or any asset thereof) (collectively,
"Unavailable Collateral") that the Issuer has granted in order to secure any
additional series of notes issued or to be issued by the Issuer or (ii)
exercise or attempt to exercise any remedies to realize upon such Unavailable
Collateral.)
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.
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.
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.
EXHIBIT A-3
(FORM OF CLASS A-3 NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO. _____________
PREMIER AUTO TRUST 199_-_
CLASS A-3 ______% ASSET BACKED NOTES
(SERIES 199_-_)
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 $____________ 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_
(the "Indenture"), between the Issuer and _________________________________,
a national banking association, as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the __________________ Distribution Date
(the "Class A-3 Final Scheduled Distribution Date"). No payments of
principal of the Class A-3 Notes shall be made until the Class A-1 Notes and
the Class A-2 Notes have been paid in full. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the sixth
day of the month preceding the month of such Distribution Date (in the case
of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of
and interest on this Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: PREMIER AUTO TRUST 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
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 _______% Asset Backed Notes(, Series 199_-_)
(herein called the "Class A-3 Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-
3 Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture, subject to the subordination of the Class B Notes
as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means
the sixth 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 Class A-3 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the
Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to
be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Distribution Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed or transmitted by facsimile prior to such Distribution Date,
and the amount then due and payable shall be payable only upon presentation
and surrender of this Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of interest at the
Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents.
(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
(in their capacities as such) shall not (i) have any rights in or claims on
the collateral or trust estate (or any asset thereof) (collectively,
"Unavailable Collateral") that the Issuer has granted in order to secure any
additional series of notes issued or to be issued by the Issuer or (ii)
exercise or attempt to exercise any remedies to realize upon such Unavailable
Collateral.)
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.
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.
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.
EXHIBIT A-4
(FORM OF CLASS A-4 NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO. ___________
PREMIER AUTO TRUST 199_-_
CLASS A-4 ______% ASSET BACKED NOTES
(SERIES 199_-_)
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 $____________ and the denominator of
which is $_________________ by (ii) the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on the Class A-4
Notes pursuant to Section 3.01 of the Indenture dated as of ______________,
199_ (the "Indenture"), between the Issuer and
_________________________________, a national banking association, 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-4 Final
Scheduled Distribution Date") or the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture. No payments of principal of the Class A-4
Notes shall be made until the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes have been paid in full. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the sixth
day of the month preceding the month of such Distribution Date (in the case
of the first Distribution Date, from the Closing Date) to and including the
fifth day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of
and interest on this Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: PREMIER AUTO TRUST 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
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 _______% Asset Backed Notes(, Series 199_-_)
(herein called the "Class A-4 Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-
4 Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture, subject to the subordination of the Class B Notes
as provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means
the sixth 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-4 Final Scheduled
Distribution Date or the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or
the Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class A-4 Notes shall be made pro rata to the Class A-4
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to
be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Distribution Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed or transmitted by facsimile prior to such Distribution Date,
and the amount then due and payable shall be payable only upon presentation
and surrender of this Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of interest at the
Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-4 Notes may be redeemed in
whole but not in part at the option of the Servicer on any Distribution Date
on and after the date on which the Pool Balance is less than or equal to 10%
of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents.
(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
(in their capacities as such) shall not (i) have any rights in or claims on
the collateral or trust estate (or any asset thereof) (collectively,
"Unavailable Collateral") that the Issuer has granted in order to secure any
additional series of notes issued or to be issued by the Issuer or (ii)
exercise or attempt to exercise any remedies to realize upon such Unavailable
Collateral.)
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.
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.
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.
EXHIBIT A-5
(FORM OF CLASS B NOTE)
THE CLASS B NOTES ARE SUBORDINATED TO THE PAYMENT OF THE CLASS A NOTES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO. ____________
PREMIER AUTO TRUST 199_-_
CLASS B ______% ASSET BACKED NOTES
(SERIES 199_-_)
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 $____________ and the denominator of
which is $________________ by (ii) the aggregate amount, if any, payable from
the Note Distribution Account in respect of principal on the Class B Notes
pursuant to Section 3.01 of the Indenture dated as of ______________, 199_
(the "Indenture"), between the Issuer and _________________________________,
a national banking association, as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the ___________ Distribution
Date (the "Class B Final Scheduled Distribution Date") and the Redemption
Date, if any, pursuant to Section 10.01 of the Indenture. No payments of
principal of the Class B Notes shall be made until the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes have been paid
in full. Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to construction that
shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture;
provided that until the Outstanding Amount of the Class A-4 Notes has been
reduced to zero, interest on the Class B Notes will be due and payable only
to the extent of funds in the Note Distribution Account after the application
of funds in the Note Distribution Account to the payment of principal and
interest then due and payable on the Class A Notes. Interest on this Note
will accrue for each Distribution Date from the sixth day of the month
preceding the month of such Distribution Date (in the case of the first
Distribution Date, from the Closing Date) to and including the fifth day of
the month of such Distribution Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: PREMIER AUTO TRUST 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
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B _______% Asset Backed Notes, (Series 199_-_)
(herein called the "Class B Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Class B
Notes are subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes (collectively, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class B Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
sixth 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 B Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or
the Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class B Notes shall be made pro rata to the Class A-4
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not
in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to
be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Distribution Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Distribution Date by
notice mailed or transmitted by facsimile prior to such Distribution Date,
and the amount then due and payable shall be payable only upon presentation
and surrender of this Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in (The City of New York).
The Issuer shall pay interest on overdue installments of interest at the
Class B Interest Rate to the extent lawful.
As provided in the Indenture, the Class B Notes may be redeemed in whole
but not in part at the option of the Servicer on any Distribution Date on and
after the date on which the Pool Balance is less than or equal to 10% of the
Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents.
(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
(in their capacities as such) shall not (i) have any rights in or claims on
the collateral or trust estate (or any asset thereof) (collectively,
"Unavailable Collateral") that the Issuer has granted in order to secure any
additional series of notes issued or to be issued by the Issuer or (ii)
exercise or attempt to exercise any remedies to realize upon such Unavailable
Collateral.)
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.
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.
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.
EXHIBIT B
(Form of Note Depository Agreement)
Letter of Representations
(To be Completed by Issuer and Trustee)
_________________________________
(Name of Issuer)
_________________________________
(Name of Trustee)
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ____________________________________________________
____________________________________________________
____________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act
as trustee with respect to the Securities pursuant to a trust indenture dated
____________________, 199__ (the "Document"). __________________
_____________________________________________________ (the "Underwriter") is
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _____________________, 199_,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each Security certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date.
Issuer or Trustee shall forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission for multiple
CUSIP numbers (if applicable) which includes a manifest or list of each CUSIP
number submitted in that transmission. (The party sending such notice shall
have a method to verify subsequently the use of such means and the timeliness
of such notice.) The Publication Date shall be not less than 30 days nor more
than 60 days prior to the redemption date or, in the case of an advance
refunding, the date that the proceeds are deposited in escrow. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Call
Notification Department at (516) 227-4039 or (516) 227-4190. If the party
sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or
Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices,
which shall also contain the current pool factor, and special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by
any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:) (The interest accrual period is record date to record date.) (The
interest accrual period is payment date to payment date.)
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent,
as well as the dollar amount of the payment for each issue. Notification of
payment details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee
of DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between
Issuer or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no
such service exists, Issuer or Trustee shall provide interest payment
information directly to DTC in advance of the interest payment date as soon
as the information is available. This information should be conveyed
directly to DTC electronically. If electronic transmission is not available,
absent any other arrangements between Trustee and DTC, such information
should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt of such notices shall be confirmed by telephoning
(212) 709-1270. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC,
such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth
in DTC's SDFS Paying Agent Operating Procedures, a copy of which has
previously been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or
principal may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity,
in which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer
or Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
15. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Trustee (at which time DTC will confirm with Issuer or Trustee the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and
(b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions
of the Security certificates by virtue of submission of such certificate(s)
to DTC.
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as
defined in this Letter of ___________________________________
Representations), Trustee as well (Issuer)
as Issuer must sign this Letter.
If there is no Trustee, in signing By: _______________________________
this Letter Issuer itself (Authorized Officer's Signature)
undertakes to perform all of the
obligations set forth herein. ___________________________________
(Trustee)
B. Schedule B contains statements
that DTC believes accurately By: _______________________________
describe DTC, the method of (Authorized Officer's Signature)
effecting book-entry transfers of
securities distributed through
DTC, and certain related matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: _____________________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
_______________________________________________
_______________________________________________
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN
ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered in the name of Cede
& Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for (each issue of the Securities, (each) in the aggregate
principal amount of such issue, and will be deposited with DTC. (If,
however, the aggregate principal amount of (any) issue exceeds $200 million,
one certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.)
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect
Participants"). The Rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities
on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
(6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.)
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on payable
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC,
Trustee, or Issuer, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Issuer or Trustee, disbursement of such payments
to Direct Participants shall be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners shall be the responsibility of
Direct and Indirect Participants.
(9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee (or
Tender/Remarketing Agent), and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee (or Tender/Remarketing Agent). The
requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Securities to
Trustee (or Tender/Remarketing Agent's) DTC account.)
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered.
11. The Issuer may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depository). In
that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable,
but Issuer takes no responsibility for the accuracy thereof.
EXHIBIT 4.3
___________________________________________________________________________
AMENDED AND RESTATED
TRUST AGREEMENT
among
CHRYSLER FINANCIAL CORPORATION,
as Depositor,
[_________________________]
and
[_____________________________]
as Owner Trustee
Dated as of _________, 199_
_____________________________________________________________________________
TABLE OF CONTENTS
Page
______
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . 4
ARTICLE II
Organization
SECTION 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Office . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.03. Purposes and Powers . . . . . . . . . . . . . . . . . 5
SECTION 2.04. Appointment of Owner Trustee . . . . . . . . . . . . 5
SECTION 2.05. Initial Capital Contribution of Series Owner Trust
Estate . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.06. Declaration of Trust . . . . . . . . . . . . . . . . 6
SECTION 2.07. Liability of Owners . . . . . . . . . . . . . . . . . 6
SECTION 2.08. Title to Trust Property . . . . . . . . . . . . . . . 6
SECTION 2.09. Situs of Trust . . . . . . . . . . . . . . . . . . . 6
SECTION 2.10. Subdivision . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.11. Representations and Warranties of Depositor and
Company . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership; Beneficial Interests in the
Trust . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.02. The Trust Certificates . . . . . . . . . . . . . . . 10
SECTION 3.03. Authentication of Trust Certificates . . . . . . . . 10
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.06. Persons Deemed Owners . . . . . . . . . . . . . . . . 12
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.08. Maintenance of Office or Agency . . . . . . . . . . . 13
SECTION 3.09. Appointment of Paying Agent . . . . . . . . . . . . . 13
SECTION 3.10. Fixed Value Securities . . . . . . . . . . . . . . . 13
SECTION 3.11. Definitive Trust Certificates . . . . . . . . . . . . 15
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Owners with Respect to Certain
Matters . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.02. Action by Owners with Respect to Certain Matters . . 15
SECTION 4.03. Action by Owners with Respect to Bankruptcy . . . . . 16
SECTION 4.04. Restrictions on Owners' Power . . . . . . . . . . . . 16
SECTION 4.05. Majority Control . . . . . . . . . . . . . . . . . . 16
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account . . . . . . . . . . . 16
SECTION 5.02. Application of Trust Funds . . . . . . . . . . . . . 17
SECTION 5.03. Method of Payment . . . . . . . . . . . . . . . . . . 17
SECTION 5.04. No Segregation of Moneys; No Interest . . . . . . . . 17
SECTION 5.05. Accounting and Reports to Owners, Internal Revenue
Service and Others . . . . . . . . . . . . . . . . . 17
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority . . . . . . . . . . . . . . . . . . 18
SECTION 6.02. General Duties . . . . . . . . . . . . . . . . . . . 18
SECTION 6.03. Action upon Instruction . . . . . . . . . . . . . . . 19
SECTION 6.04. No Duties Except as Specified in this Agreement or
in Instructions . . . . . . . . . . . . . . . . . . . 20
SECTION 6.05. No Action Except Under Specified Documents or
Instructions . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.06. Restrictions . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties . . . . . . . . . . . 20
SECTION 7.02. Furnishing of Documents . . . . . . . . . . . . . . . 22
SECTION 7.03. Representations and Warranties . . . . . . . . . . . 22
SECTION 7.04. Reliance; Advice of Counsel . . . . . . . . . . . . . 22
SECTION 7.05. Not Acting in Individual Capacity . . . . . . . . . . 23
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
Receivables . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes . 23
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act
Licenses .. . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses . . . . . . . . . . 24
SECTION 8.02. Indemnification . . . . . . . . . . . . . . . . . . . 24
SECTION 8.03. Payments to Owner Trustee . . . . . . . . . . . . . . 24
ARTICLE IX
Dissolution and Termination of Trust Agreement
SECTION 9.01. Dissolution of the Trust and Termination of Trust
Agreement . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee . . . 26
SECTION 10.02. Resignation or Removal of Owner Trustee . . . . 26
SECTION 10.03. Successor Owner Trustee . . . . . . . . . . . . 26
SECTION 10.04. Merger or Consolidation of Owner Trustee . . . . 27
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee . 27
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments . . . . . . . . . . . 28
SECTION 11.02. No Legal Title to any Series Owner Trust Estate
in Owners . . . . . . . . . . . . . . . . . . . 30
SECTION 11.03. Limitations on Rights of Others . . . . . . . . 30
SECTION 11.04. Notices . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.05. Severability . . . . . . . . . . . . . . . . . . 30
SECTION 11.06. Separate Counterparts . . . . . . . . . . . . . 30
SECTION 11.07. Successors and Assigns . . . . . . . . . . . . . 31
SECTION 11.08. Covenants of Company . . . . . . . . . . . . . . 31
SECTION 11.09. No Petition . . . . . . . . . . . . . . . . . . 31
SECTION 11.10. No Recourse . . . . . . . . . . . . . . . . . . 31
SECTION 11.11. Headings . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.12. GOVERNING LAW . . . . . . . . . . . . . . . . . 31
SECTION 11.13. Trust Certificate Transfer Restrictions . . . . 32
SECTION 11.14. Depositor Payment Obligation . . . . . . . . . . 32
EXHIBITS
EXHIBIT A Form of Trust Certificate . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Certificate of Trust of Premier Auto Trust
1997-1 . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Transferor Certificate . . . . . . . . . . . C-1
EXHIBIT D Form of Investment Letter . . . . . . . . . . . . . . D-1
EXHIBIT E Form of Rule 144A Letter . . . . . . . . . . . . . . E-1
EXHIBIT F Form of Supplement . . . . . . . . . . . . . . . . F-1
AMENDED AND RESTATED TRUST AGREEMENT dated as of _______, 199_,
among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as
depositor (the "Depositor"), [__________________________] (the
"Company"), a __________________________________, and
[______________________________], a ___________ ______________, as
owner trustee (the "Owner Trustee").
WHEREAS, the Depositor, the Owner Trustee and the Company entered into a
Trust Agreement dated as of ___________, 199_ (the "Trust Agreement");
WHEREAS, the Trust Agreement is being amended and restated as of
_______, 199_;
WHEREAS, the Trust may purchase Receivables from the Depositor from time
to time; each group of Receivables so purchased will support a separate
series of Notes and/or Certificate issued by the Trust from time to time;
WHEREAS, the Depositor and the Company may enter into separate Purchase
Agreements from time to time, pursuant to which the Depositor will assign to
the Company any and all of the Depositor's rights and interests with respect
to the receipt of amounts from the Reserve Account for a Series and with
respect to any Fixed Value Payments for a Series; and
WHEREAS, in connection therewith, the Company is willing to assume
certain obligations pursuant hereto;
NOW, THEREFORE, the Depositor, the Company and the Owner Trustee hereby
agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms. For all purposes of this
__________________
Agreement, the following terms shall have the meanings set forth below:
"Administration Agreement:" with respect to a Series, as defined in the
________________________
related Supplement.
"Administration" shall mean Chrysler Financial Corporation and its
______________
successors and permitted assigns.
"Agreement" shall mean this Amended and Restated Trust Agreement and all
_________
amendments hereof and supplements hereto, including each Supplement.
"Basic Documents" shall mean, with respect to a Series, the Purchase
_______________
Agreement, the Sale and Servicing Agreement, the Indenture, the
Administration Agreement and the Note Depository Agreement, each as defined
in the related Supplement, and the other documents and certificates delivered
in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in
_____________
Section 11.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
_______________________
Delaware Code, 12 Del. Code 3801 et seq., as the same may be amended from
____ ____ _______
time to time.
"Certificate of Trust" shall mean the Certificate of Trust in the form
_____________________
of Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
_____________________ ______________________
register mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a
_________________ ______
Trust Certificate is registered.
"CFC" shall mean Chrysler Financial Corporation, a Michigan corporation,
___
and any successor in interest.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
____
Treasury Regulations promulgated thereunder.
"Company": with respect to a Series, as defined in the related
_______
Supplement.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
______________________
the principal corporate trust office of the Owner Trustee located at
______________________________, ______________, or at such other address as
the Owner Trustee may designate by notice to the Owners, the Depositor and
the Company, or the principal corporate trust office of any successor Owner
Trustee at the address designated by such successor Owner Trustee by notice
to the Owners, the Depositor and the Company.
"Depositor" shall mean CFC in its capacity as depositor hereunder.
_________
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
_____
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
_____________
amended.
"Expenses" shall have the meaning assigned to such term in Section 8.02.
________
"Indemnified Parties" shall have the meaning assigned to such term in
___________________
Section 8.02.
"Indenture": with respect to a Series, as defined in the related
_________
Supplement.
"Note Depository Agreement": with respect to a Series, as defined in
__________________________
the related Supplement.
"Opinion of Counsel" means one or more written opinions of counsel, who
__________________
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
or the Rating Agencies, as applicable.
"Owner" shall mean each Holder of a Trust Certificate.
_____
"Owner Trustee" shall mean _____________________________, a
________________
__________________ _______ corporation, not in its individual capacity but
solely as owner trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent appointed
____________
pursuant to Section 3.09 and shall initially be ________________________.
"Percentage Interest" means, as to any Trust Certificate of any Series,
___________________
the percentage interest, specified on the face thereof, in the distributions
on the Trust Certificates of such Series pursuant to this Agreement and the
related Supplement.
"Record Date" shall mean, with respect to any Distribution Date, the
___________
15th day of the month preceding such Distribution Date.
"Sale and Servicing Agreement": with respect to a Series, as defined in
____________________________
the related Supplement.
"Secretary of State" shall mean the Secretary of State of the State of
___________________
Delaware.
"Series" shall mean any series of Notes and/or Trust Certificates, which
______
may include a class or classes of Notes and/or Trust Certificates.
"Series Certificate Distribution Account" shall have the meaning
__________________________________________
assigned to such term in Section 5.01.
"Series Owner Trust Estate": with respect to a Series, as defined in
__________________________
the related Supplement.
"Subdivision" shall mean, with respect to a Series, a separate
___________
subdivision of this Trust, within the meaning of Section 3806(b)(2) of the
Business Trust Statute, containing assets separate and apart from all other
assets of the Trust, all as specified in the related Supplement.
"Supplement" shall mean, with respect to a Series, a supplement to this
__________
Agreement executed in connection with the issuance of a Series of Notes
and/or Trust Certificates.
"Treasury Regulations" shall mean regulations, including proposed or
_____________________
temporary Regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" shall mean the trust established by this Agreement.
_____
"Trust Certificate" shall mean a certificate evidencing the beneficial
_________________
interest of an Owner in the Trust, or, if specified in such certificate, in a
separate Subdivision for a Series substantially in the form attached hereto
as Exhibit A.
SECTION 1.02. Other Definitional Provisions. (a) With respect to
_____________________________
a Series, capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement for such Series
or, if not defined therein, in the Indenture for such Series.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Organization
____________
SECTION 2.01. Name. The Trust created hereby shall be known as
____
"Premier Auto Trust 199_-_," in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of
______
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Owners,
the Depositor and the Company.
SECTION 2.03. Purposes and Powers. (a) The purpose of the Trust
___________________
is to engage in the following activities:
(i) to issue one or more Series of Notes pursuant to the related
Indenture or Indentures and one or more Series of the Trust Certificates
pursuant to this Agreement and the related Supplement or Supplements and
to sell the Notes and the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates of a Series, to purchase the Receivables for such Series,
to fund the Reserve Account, if any, for such Series, and to pay the
balance to the Depositor pursuant to the Sale and Servicing Agreement
for such Series;
(iii) to pay the organizational, start-up and transactional
expenses of the Trust for each Series;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate of a Series pursuant to the Indenture for such Series and
to hold, manage and distribute to the Owners pursuant to the terms of
the Sale and Servicing Agreement for such Series any portion of the
Trust Estate of such Series released from the Lien of, and remitted to
the Trust pursuant to, such Indenture;
(v) to enter into and perform its obligations under the Basic
Documents for each Series to which it is to be a party;
(vi) to sell the Fixed Value Payments of a Series to the Depositor
and, if requested by the Company for such Series (as assignee of the
Depositor), subsequently to acquire the related Fixed Value Payments and
to issue and sell the Fixed Value Securities;
(vii) to engage in those activities, including entering into
agreements, that are necessary or suitable to accomplish the foregoing
or are incidental thereto or connected therewith; and
(viii) subject to compliance with the Basic Documents of each
Series, to engage in such other activities as may be required in
connection with conservation of the Series Owner Trust Estate for such
Series and the making of distributions to the related Owners and the
related Noteholders and in respect of the Fixed Value Securities for
such Series.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents for a Series.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby
_____________________________
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Business Trust Statute.
SECTION 2.05. Initial Capital Contribution of Series Owner Trust
_____________________________________________________
Estate. The Depositor hereby sells, assigns, transfers, conveys and sets
______
over to the Owner Trustee, as of the date hereof, the sum of $1. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the
date hereof, of the foregoing contribution, which shall constitute the
initial Series Owner Trust Estate and shall be deposited in the Certificate
Distribution Account. The Depositor shall pay organizational expenses of the
Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby
_____________________
declares that it will hold each Series Owner Trust Estate in trust upon and
subject to the conditions set forth herein and the related Supplement for the
use and benefit of the related Owners, subject to the obligations of the
Trust under the related Basic Documents. It is the intention of the parties
hereto that the Trust constitute a business trust under the Business Trust
Statute and that this Agreement constitute the governing instrument of such
business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, with respect to each Series and the
related Subdivision (i) so long as there is a sole Owner with respect to such
Subdivision, such Subdivision shall be treated as a security arrangement,
with the assets of such Subdivision being the Receivables and other assets
held in such Subdivision, the owner of such Receivables being the sole Owner
and the Notes of such Series being non-recourse debt of such sole Owner and
(ii) if there is more than one Owner, such Subdivision shall be treated as a
partnership for income and franchise tax purposes, with the assets of the
partnership being the related Receivables and other assets held by the Trust
in such Subdivision, the partners of the partnership being such Owners
(including the Company as assignee of the Depositor pursuant to the Purchase
Agreement for such Series, in its capacity as recipient of distributions from
the Reserve Account for such Series) and such Notes being debt of the
partnership. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual
or other necessary returns, reports and other forms consistent with the
characterization of the Trust and its Subdivisions as provided in the
preceding sentence for such tax purposes. Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth herein
and in the Business Trust Statute with respect to accomplishing the purposes
of the Trust.
SECTION 2.07. Liability of Owners. The Owners (including the
_____________________
Company) shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the general corporation law of the State of Delaware.
SECTION 2.08. Title to Trust Property. Legal title to all of the
________________________
Series Owner Trust Estate of each Series shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of a Series Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the
case may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
________________
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees in
any state other than Delaware; provided, however, that nothing herein shall
__________________
restrict or prohibit the Owner Trustee from having employees within or
without the State of Delaware. Payments will be received by the Trust only
in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in Delaware.
SECTION 2.10. Subdivision. (a) Each Supplement for a Series will
___________
create a separate Subdivision, which shall contain the Series Owner Trust
Estate for such Series, which will consist of the Receivables and other
assets specified in such Supplement. The holders of the Notes and Trust
Certificates of a Series shall only have an interest in and rights and claims
to the Subdivision for such Series and the Series Owner Trust Estate for such
Subdivision, and shall not have, and hereby agree that they will not have,
any interest in or rights or claims to the Subdivision for any other Series
and the related Series Owner Trust Estate.
The holders of the Trust Certificates of any Series shall not have legal
title to any part of the Series Owner Trust Estate related to such Series of
Trust Certificates.
(b) Upon the written direction of the Depositor, the Owner Trustee and
the Depositor shall enter into one or more Supplements, providing for the
issuance of separate Series of Trust Certificates. Each Series shall be a
separate Series of the Trust within the meaning of Section 3806(b)(2) of the
Business Trust Statute. Separate and distinct records (including tax
records) shall be maintained for each Series and the Series Owner Trust
Estate associated with each such Series shall be maintained for each Series
and the Series Owner Trust Estate associated with each such Series shall be
held in the Trust and accounted for separately from the Series Owner Trust
Estate of any other Series. Except as specified in this Agreement or in any
Supplement, the Series Owner Trust Estate of any Series shall not be subject
to claims, debts, liabilities, expenses or obligations arising from or with
respect to the Trust or any other Series. The debts, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular Series shall be enforceable against the related Series Owner Trust
Estate only and not against the assets of the Trust generally or any other
Series. Notice of this limitation on inter-series liabilities shall be set
forth in the Certificate of Trust (whether originally or by amendment) as
filed with the Secretary of State pursuant to the Business Trust Statute, and
upon the giving of such notice in the Certificate of Trust, the statutory
provisions of Section 3804 of the Business Trust Statute relating to
limitations on inter-series liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the Certificate Trust) shall
become applicable to the Trust and each Series of Trust Certificates.
(c) Each Supplement shall contain provisions requiring that neither
the Depositor nor any Holder of a Trust Certificate of the related Series of
Trust Certificates shall direct the Owner Trustee to (i) take any action that
would cause the Series Owner Trust Estate of the related Series to be
substantively consolidated into any other Series Owner Trust Estate of any
other Series such that it will have its separate existence disregarded in the
event of an insolvency event with respect to any Certificateholder of such
Series, the Trust or another Series, (ii) to commingle any of the Series
Owner Trust Estate of the related Series with the Series Owner Trust Estate
of any other Series, (iii) to maintain the corporate, financial and
accounting books and records and statements of the related Series, if any, in
a manner such that they cannot be separated from those of any other Series,
(iv) to take any action that would cause (a) the funds and other assets of
the related Series, if any, not be identifiable or the bank accounts,
corporate records and books of account, if any, of the related Series not to
be inseparable from those of any other Series and (b) the Trust to pay, other
than from assets of the related Series, any obligations or indebtedness of
any kind incurred by the related Series and payable by the Trust pursuant to
this agreement, (v) to maintain the assets and liabilities of the related
Series so that they are not readily ascertainable from those of any other
Series and subject to segregation without requiring substantial time or
expense to effect and account for such segregated assets and liabilities,
(vi) to take any actions with respect to the related Series except in its
capacity as Owner Trustee in respect of such Series. The Administrator shall
have the right to take any action on behalf of the Trust to enforce the
foregoing provisions of each Supplement for the benefit of the Trust and of
each Series.
SECTION 2.11. Representations and Warranties of Depositor and
_____________________________________________________
Company. (a) The Depositor hereby represents and warrants, as of the date
_______
on which this Agreement is executed and delivered and as of each date on
which a Supplement is executed and delivered, to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Michigan,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii) The Depositor is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such
qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and any Supplement and to carry out its terms;
the Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust and the
Depositor has duly authorized such sale and assignment and deposit to
the Trust by all necessary corporate action; and the execution, delivery
and performance of this Agreement have been duly authorized by the
Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents for a Series); nor violate any law or, to the best of
the Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(v) To the Depositor's best knowledge, there are no proceedings
or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (A) asserting the
invalidity of this Agreement or any Supplement, (B) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement
or any Supplement.
(vi) The representations and warranties of the Company and the
Depositor in Sections 3.01 and 3.02 of the Purchase Agreement for each
Series are true and correct.
(b) The Company hereby represents and warrants, as of the date on
which this Agreement is executed and delivered and as of each date on which a
Supplement is executed and delivered, to the Owner Trustee that:
(i) The Company has been duly organized and is validly existing
as a [limited liability company] in good standing under the laws of the
jurisdiction of its organization, with the power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(ii) The Company is duly qualified to do business as a foreign
[limited liability company] in good standing and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall
require such qualifications.
(iii) The Company has the power and authority to execute and
deliver this Agreement and any Supplement and to carry out its terms;
the Company has full power and authority to purchase the Trust
Certificates; and the execution, delivery and performance of this
Agreement and any Supplement has been duly authorized by the Company by
all necessary action.
(iv) The consummation of the transactions contemplated by this
Agreement and any Supplement and the fulfillment of the terms hereof and
thereof do not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of organization or operating
agreement of the Company, or any indenture, agreement or other
instrument to which the Company is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents for a
Series); nor violate any law or, to the best of the Company's knowledge,
any order, rule or regulation applicable to the Company of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Company or its
properties.
(v) There are no proceedings or investigations pending or, to the
Company's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (C) seeking
any determination or ruling that might materially and adversely affect
the performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement.
ARTICLE III
Trust Certificates and Transfer of Interests
____________________________________________
SECTION 3.01. Initial Ownership; Beneficial Interests in the Trust.
____________________________________________________
(a) Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.05 and until the issuance of the Trust Certificates for
a Series, the Depositor shall be the sole beneficiary of the Trust.
(b) Each holder of a Trust Certificate of a Series shall hold an
exclusive, divided beneficial interest in the Series Owner Trust Estate of
such Series.
SECTION 3.02. The Trust Certificates. The Trust Certificates of a
_______________________
Series shall be issued in minimum denominations of a one percent Percentage
Interest in the related Subdivision. A Trust Certificate shall be executed
on behalf of the Trust by manual or facsimile signature of an authorized
officer of the Owner Trustee. Trust Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefit of this Agreement
and the related Supplement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date
of authentication and delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder and the related Supplement upon such transferee's
acceptance of a Trust Certificate duly registered in such transferee's name
pursuant to Section 3.04.
SECTION 3.03. Authentication of Trust Certificates. On the Closing
____________________________________
Date, the Owner Trustee shall cause the Trust Certificates of a Series in an
aggregate Percentage Interest equal to 100% to be executed on behalf of the
Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president, any vice
president, secretary or any assistant treasurer, without further corporate
action by the Depositor, in authorized denominations. No Trust Certificate
shall entitle its Holder to any benefit under this Agreement or the related
Supplement or be valid for any purpose unless there shall appear on such
Trust Certificate a certificate of authentication substantially in the form
set forth in Exhibit A, executed by the Owner Trustee or
________________________, as the Owner Trustee's authenticating agent, by
manual signature; such authentication shall constitute conclusive evidence
that such Trust Certificate shall have been duly authenticated and delivered
hereunder. All Trust Certificates shall be dated the date of their
authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
_____________________________________________________
Certificates; Limitations on Transfer. The Certificate Registrar shall keep
_____________________________________
or cause to be kept, at the office or agency maintained pursuant to
Section 3.08, a Certificate Register for each Series in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee shall
provide for the registration of Trust Certificates of such Series and of
transfers and exchanges of such Trust Certificates as herein provided.
________________________ shall be the initial Certificate Registrar.
Unless otherwise provided in the related Supplement, the Trust
Certificates of a Series will not be registered under the Securities Act and
will not be listed on any exchange. No transfer of a Trust Certificate shall
be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws
or is exempt from the registration requirements under the Securities Act and
such state securities laws. In the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and state securities laws,
in order to assure compliance with the Securities Act and such laws, the
Holder desiring to effect such transfer and such Holder's prospective
transferee shall each certify to the Owner Trustee in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C
(the "Transferor Certificate") and either Exhibit D (the "Investment Letter")
or Exhibit E (the "Rule 144A Letter"). Except in the case of a transfer as
to which the proposed transferee has provided a Rule 144A Letter, there shall
also be delivered to the Owner Trustee an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act and
state securities laws, which Opinion of Counsel shall not be an expense of
the Trust or the Owner Trustee; provided that such Opinion of Counsel in
________
respect of the applicable state securities laws may be a memorandum of law
rather than an opinion if such counsel is not licensed in the applicable
jurisdiction. The Depositor shall provide to any Holder of a Trust
Certificate and any prospective transferee designated by any such Holder,
information regarding the Trust Certificates and the Receivables and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Trust
Certificate without registration thereof under the Securities Act pursuant to
the registration exemption provided by Rule 144A. Each Holder of a Trust
Certificate desiring to effect such a transfer shall, and does hereby agree
to, indemnify the Trust, the Owner Trustee, and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with federal and state securities laws. The Owner Trustee shall
cause each Trust Certificate to contain a legend in the form set forth on the
form of Trust Certificate attached hereto as Annex A.
Upon surrender for registration of transfer of any Trust Certificate at
the office or agency maintained pursuant to Section 3.08 and subject to the
satisfaction of the preceding paragraph, the Owner Trustee shall execute,
authenticate and deliver (or shall cause _____ ___________________ as its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates of
the same Series in authorized denominations of a like aggregate Percentage
Interest dated the date of authentication by the Owner Trustee or any
authenticating agent; provided that, unless otherwise specified in the
__________
related Supplement, prior to such execution, authentication and delivery, the
Owner Trustee shall have received an Opinion of Counsel to the effect that
the proposed transfer will not cause the Trust to be characterized as an
association (or a publicly traded partnership) taxable as a corporation or
alter the tax characterization of the Notes of such Series for federal income
tax purposes or Michigan income and single business tax purposes. At the
option of a Holder, Trust Certificates may be exchanged for other Trust
Certificates of such Series of authorized denominations of a like aggregate
Percentage Interest upon surrender of the Trust Certificates to be exchanged
at the office or agency maintained pursuant to Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Trust Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates of a Series for a period of
15 days preceding the due date for any payment with respect to the Trust
Certificates of such Series.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
_____________________________________________________
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to
____________
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Trust shall execute and the Owner Trustee or The Chase
Manhattan Bank, as the Owner Trustee's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of the
same Series of like tenor and denomination. In connection with the issuance
of any new Trust Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Certificate of a Series issued pursuant to
this Section shall constitute conclusive evidence of ownership in the related
Subdivision, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
SECTION 3.06. Persons Deemed Owners. Prior to due presentation of
______________________
a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name
any Trust Certificate is registered in the Certificate Register as the owner
of such Trust Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or any Paying Agent shall be bound by any
notice to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
_____________________________________________________
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
_________
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee
of a written request therefor from the Servicer or the Depositor, a list, in
such form as the Servicer or the Depositor may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If a Certificateholder of a Series applies in writing to the Owner
Trustee, and such application states that the applicant desires to
communicate with other Certificateholders of such Series with respect to
their rights under this Agreement and the related Supplement or under the
Trust Certificates of such Series, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such applicant
access during normal business hours to the current list of Certificateholders
of such Series. Each Holder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Company,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee
________________________________
shall maintain in the Borough of Manhattan, The City of New York, an office
or offices or agency or agencies where Trust Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Owner Trustee in respect of the Trust Certificates and the Basic
Documents may be served. The Owner Trustee initially designates _________
_________________________________________________________ as its office for
such purposes. The Owner Trustee shall give prompt written notice to the
Company and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.09. Appointment of Paying Agent. The Paying Agent shall
____________________________
make distributions to Certificateholders of a Series from the Certificate
Distribution Account of such Series pursuant to the related Supplement and
shall report the amounts of such distributions to the Owner Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from a
Certificate Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and remove the
Paying Agent if the Owner Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent initially shall be
________________________, and any co-paying agent chosen by _________
______________ and acceptable to the Owner Trustee. ________________________
shall be permitted to resign as Paying Agent upon 30 day's written notice to
the Owner Trustee. In the event that ________________________ shall no
longer be the Paying Agent, the Owner Trustee shall appoint a successor to
act as Paying Agent (which successor shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Owner Trustee to execute and deliver to the
Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that, as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums shall
be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Owner
Trustee. The provisions of Section 7.01, 7.03, 7.04 and 8.01 shall apply to
the Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 3.10. Fixed Value Securities. Pursuant to the Sale and
_______________________
Servicing Agreement and the Purchase Agreement for a Series, promptly
following the sale of the Standard Receivables and Fixed Value Receivables
for such Series to the Trust on the Closing Date, the Trust will sell to the
Depositor the related Fixed Value Payments in accordance with such Sale and
Servicing Agreement. Neither the Depositor nor the Company (as assignee of
the Depositor) shall transfer such Fixed Value Payments to any Person other
than the Trust and except as contemplated by such Purchase Agreement. At any
time after the Trust sells the Fixed Value Payments of a Series to the
Depositor, at the option of the Company (as assignee of the Depositor) and
upon 10 days prior written notice to the Owner Trustee and the Indenture
Trustee for such Series, the Company will be permitted to sell to the Trust,
and the Trust shall be obligated to purchase from the Company (subject to the
availability of funds), all or any portion of such Fixed Value Payments due
under the Receivables for such Series, subject to the terms and conditions of
such Sale and Servicing Agreement. Upon any such sale, (i) the Depositor,
the Company and the Owner Trustee will enter into an amendment to this
Agreement and the related Supplement to provide for, at the election of the
Company, the issuance of certificates representing ownership interests in the
related Subdivision to the extent of such Fixed Value Payments due under such
Receivables or the issuance of indebtedness by the Trust secured by such
Fixed Value Payments due under such Receivables and to make any other
provisions herein that are necessary or desirable in connection therewith and
(ii) the Owner Trustee and the Depositor will enter into any other agreements
or instruments related thereto as may be requested by the Company; provided,
_________
however, that the Owner Trustee may, but shall not be obligated to, enter
_______
into any such amendment, agreement or instrument that affects the Owner
Trustee's own rights, duties or immunities under this Agreement; and
provided, further, that the obligation of the Owner Trustee to enter into any
__________________
such amendment or other agreement or instrument is subject to the following
conditions precedent:
(a) Such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or
agreements to be executed and delivered by the Indenture Trustee for such
Series, such Indenture Trustee, shall have been executed by each other party
thereto and delivered to the Owner Trustee;
(b) The Company shall have delivered to the Owner Trustee and such
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to the
effect that each condition precedent (including the requirement with respect
to all required filings) provided by this Section has been complied with and
such amendment or other agreement or instrument is authorized or permitted by
this Agreement;
(c) The Rating Agency Condition shall have been satisfied with respect
to such sale and issuance;
(d) Such sale and issuance and such amendment or other agreement or
instrument shall not adversely affect in any material respect the interest of
any Noteholder or Certificateholder of such Series, and the Company shall
have provided to the Owner Trustee and such Indenture Trustee an Officer's
Certificate to such effect;
(e) The Owner Trustee and such Indenture Trustee shall have received
an Opinion of Counsel to the effect that such sale and issuance will not have
any material adverse tax consequence to the Trust, the related Subdivision or
to any Noteholder or Certificateholder of such Series; and
(f) All filings and other actions required to continue the first
perfected interest of the Trust in the Series Owner Trust Estate and of such
Indenture Trustee in the related Trust Estate shall have been duly made or
taken by the Company.
SECTION 3.11. Definitive Trust Certificates. Unless otherwise
_______________________________
provided in the related Supplement, the Trust Certificates of a Series, upon
original issuance, will be issued in definitive, fully registered form.
ARTICLE IV
Actions by Owner Trustee
________________________
SECTION 4.01. Prior Notice to Owners with Respect to Certain
_____________________________________________________
Matters. With respect to the following matters with respect to a Series and
_______
the related Subdivision, the Owner Trustee shall not take action unless at
least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholders of such Series in writing of the proposed
action and the Owners shall not have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that such Owners have
withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Receivables) and
the compromise of any action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Receivables);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(c) the amendment of the Indenture for such Series by a supplemental
indenture in circumstances where the consent of any related Noteholder is
required;
(d) the amendment of the Indenture for such Series by a supplemental
indenture in circumstances where the consent of any related Noteholder is not
required and such amendment materially adversely affects the interests of the
Owners of such Series;
(e) the amendment, change or modification of the Administration
Agreement for such Series, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would not
materially adversely affect the interests of the Owners of such Series; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee for such Series or pursuant to
this Agreement of a successor Certificate Registrar for such Series, or the
consent to the assignment by such Note Registrar, Paying Agent or Indenture
Trustee or Certificate Registrar of its obligations under the Indenture for
such Series or this Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain Matters.
____________________________________________________
The Owner Trustee shall not have the power, except upon the direction of the
Owners, to (a) remove the Administrator for a Series under the related
Administration Agreement pursuant to the terms thereof, (b) appoint a
successor Administrator pursuant to the terms of an Administration Agreement,
(c) remove the Servicer under a Sale and Servicing Agreement pursuant to the
terms thereof or (d) except as expressly provided in the Basic Documents of a
Series, sell the related Receivables after the termination of the related
Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Owners of the
related Series.
SECTION 4.03. Action by Owners with Respect to Bankruptcy. The
______________________________________________
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
SECTION 4.04. Restrictions on Owners' Power. The Owners shall not
______________________________
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents of any
Series or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided
_________________
herein, any action that may be taken by the Owners of a Series under this
Agreement and the related Supplement may be taken by the Holders of Trust
Certificates of such Series evidencing not less than a majority of the
Percentage Interests evidenced by such Trust Certificates. Except as
expressly provided herein or the related Supplement, any written notice of
the Owners of a Series delivered pursuant to this Agreement and the related
Supplement shall be effective if signed by Holders of Trust Certificates of
such Series evidencing not less than a majority of the Percentage Interests
evidenced by the Trust Certificates of such Series at the time of the
delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
__________________________________________
SECTION 5.01. Establishment of Trust Account. The Owner Trustee,
______________________________
for the benefit of the Certificateholders of each Series, shall establish and
maintain in the name of the Trust an Eligible Deposit Account for a single
Series or two or more Series, as specified in the related Supplements (the
"Series Certificate Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held solely for the benefit
of the Certificateholders of the specified Series.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in each Series Certificate Distribution
Account and in all proceeds thereof. Except as otherwise expressly provided
herein or the related Supplement, each Series Certificate Distribution
Account shall be under the sole dominion and control of the Owner Trustee
solely for the benefit of the Certificateholders of the related Series. If,
at any time, a Series Certificate Distribution Account ceases to be an
Eligible Deposit Account, the Owner Trustee (or the Depositor on behalf of
the Owner Trustee, if such Certificate Distribution Account is not then held
by the Owner Trustee or an affiliate thereof) shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Series Certificate Distribution
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Series Certificate Distribution Account.
SECTION 5.02. Application of Trust Funds. (a) The holders of any
__________________________
Series of Trust Certificates shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
the provisions of this Article V.
(b) With respect to each Series on each Distribution Date, the Owner
Trustee will distribute to Certificateholders of such Series, on the basis of
the Percentage Interest evidenced by their Trust Certificates, amounts
deposited in the Series Certificate Distribution Account for such Series
pursuant to the applicable provisions of the Sale and Servicing Agreement for
such Series with respect to such Distribution Date.
(c) On each Distribution Date for a Series, the Owner Trustee shall
send to each Certificateholder of such Series the statement or statements
provided to the Owner Trustee by the Servicer pursuant to the applicable
provisions of the Sale and Servicing Agreement for such Series with respect
to such Distribution Date.
(d) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the
amount otherwise distributable to such Owner in accordance with this Section.
The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owners of a Series sufficient funds from the
related Series Certificate Distribution Account for the payment of any tax
that is legally owed by the Trust in respect of such Owners (but such
authorization shall not prevent the Owner Trustee from contesting any such
tax in appropriate proceedings and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of
any withholding tax imposed with respect to an Owner shall be treated as cash
distributed to such Owner at the time it is withheld by the Trust and
remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Owner), the Owner Trustee may in its sole
discretion withhold such amounts in accordance with this paragraph (c).
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
___________________
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding
Record Date by wire transfer, in immediately available funds, to the account
of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior
to such Distribution Date, or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject to
_______________________________________
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law or the
related Sale and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee shall not be
liable for any interest thereon.
SECTION 5.05. Accounting and Reports to Owners, Internal Revenue
_____________________________________________________
Service and Others. The Owner Trustee shall deliver to each Owner of a
___________________
Series such information, reports or statements with respect to such Series as
may be required by the Code and applicable Treasury Regulations and as may be
required to enable each Owner to prepare its federal and state income tax
returns. Unless otherwise provided in respect of a Series in the related
Supplement, consistent with the Trust's characterization for tax purposes, as
a security arrangement for the issuance of non-recourse debt, no federal
income tax return shall be filed on behalf of the Trust unless either (i) the
Owner Trustee shall receive an Opinion of Counsel that, based on a change in
applicable law occurring after the date hereof, or as a result of a transfer
by the Company permitted by Section 3.04, the Code requires such a filing or
(ii) the Internal Revenue Service shall determine that the Trust, or a
Subdivision, is required to file such a return. Notwithstanding the
preceding sentence, the Owner Trustee shall file Internal Revenue Service
Form 8832 and elect for the Trust and each Subdivision to be treated as a
domestic eligible entity with a single owner that is disregarded as a
separate entity, which election shall remain in effect so long as the Company
or any other party is the sole Owner. In the event that the Trust is
required to file tax returns, the Owner Trustee shall prepare or shall cause
to be prepared any tax returns required to be filed by the Trust and shall
remit such returns to the Company (or if the Company no longer owns any
Certificates, the Owner designated for such purpose by the Company to the
Owner Trustee in writing) at least five (5) days before such returns are due
to be filed. The Company (or such designee Owner, as applicable) shall
promptly sign such returns and deliver such returns after signature to the
Owner Trustee and such returns shall be filed by the Owner Trustee with the
appropriate tax authorities. In no event shall the Owner Trustee or the
Company (or such designee Owner, as applicable) be liable for any
liabilities, costs or expenses of the Trust or the Noteholders arising out of
the application of any tax law, including federal, state, foreign or local
income or excise taxes or any other tax imposed on or measured by income (or
any interest, penalty or addition with respect thereto or arising from a
failure to comply therewith) except for any such liability, cost or expense
attributable to any act or omission by the Owner Trustee or the Company (or
such designee Owner, as applicable), as the case may be, in breach of its
obligations under this Agreement.
ARTICLE VI
Authority and Duties of Owner Trustee
_____________________________________
SECTION 6.01. General Authority. The Owner Trustee is authorized
_________________
and directed to execute and deliver the Basic Documents for each Series to
which the Trust is to be a party and each certificate or other document
attached as an exhibit to or contemplated by the Basic Documents of a Series
to which the Trust is to be a party and any amendment or other agreement or
instrument described in Section 3.10, in each case, in such form as the
Company for the related Series shall approve, as evidenced conclusively by
the Owner Trustee's execution thereof. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents of each Series. The
Owner Trustee is further authorized from time to time to take such action as
the Administrator recommends with respect to the Basic Documents for each
Series.
SECTION 6.02. General Duties. It shall be the duty of the Owner
______________
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement, each Supplement and the Basic
Documents for each Series to which the Trust is a party and to administer the
Trust in the interest of the Owners, subject to the Basic Documents for each
Series and in accordance with the provisions of this Agreement and each
Supplement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under a
Supplement and the Basic Documents for each Series to the extent the
Administrator has agreed in the Administration Agreement for the related
Series to perform any act or to discharge any duty of the Owner Trustee
hereunder or under such Supplement and any Basic Document, and the Owner
Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement
for the related Series.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV
_______________________
and in accordance with the terms of the Basic Documents of a Series and the
related Supplement, the Owners of such Series may by written instruction
direct the Owner Trustee in the management of the related Subdivision. Such
direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Supplement or related Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of such Supplement or
Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or
under any Supplement or related Basic Document, the Owner Trustee shall
promptly give notice (in such form as shall be appropriate under the
circumstances) to the Owners of the related Series requesting instruction as
to the course of action to be adopted, and to the extent the Owner Trustee
acts in good faith in accordance with any written instruction of such Owners
received, the Owner Trustee shall not be liable on account of such action to
any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement, the related
Supplement, or the related Basic Documents, as it shall deem to be in the
best interests of the Owners of such Series, and shall have no liability to
any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Supplement or related
Basic Document or any such provision is ambiguous as to its application, or
is, or appears to be, in conflict with any other applicable provision, or in
the event that this Agreement or a Supplement permits any determination by
the Owner Trustee or is silent or is incomplete as to the course of action
that the Owner Trustee is required to take with respect to a particular set
of facts, the Owner Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the Owners of the related Series
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with this Agreement
or the related Supplement and Basic Documents, as it shall deem to be in the
best interests of the Owners of the related Series, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
_____________________________________________________
Instructions. The Owner Trustee shall not have any duty or obligation to
____________
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Series Owner Trust Estate of any Series, or to
otherwise take or refrain from taking any action under, or in connection
with, any document contemplated hereby or by any Supplement to which the
Owner Trustee is a party, except as expressly provided by the terms of this
Agreement or such Supplement or in any document or written instruction
received by the Owner Trustee pursuant to Section 6.03; and no implied duties
or obligations shall be read into this Agreement, any Supplement or any Basic
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or
file any Securities and Exchange Commission filing for the Trust or any
Subdivision or to record this Agreement, any Supplement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own
cost and expense, promptly take all action as may be necessary to discharge
any liens on any part of any Series Owner Trust Estate that result from
actions by, or claims against, the Owner Trustee that are not related to the
ownership or the administration of such Series Owner Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
_____________________________________________________
Instructions. The Owner Trustee shall not manage, control, use, sell,
____________
dispose of or otherwise deal with any part of Series Owner Trust Estate
except (i) in accordance with the powers granted to and the authority
conferred upon the Owner Trustee pursuant to this Agreement or the related
Supplement, (ii) in accordance with the related Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any
____________
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust or any Subdivision becoming taxable as a corporation for
federal income tax purposes. The Owners shall not direct the Owner Trustee
to take action that would violate the provisions of this Section.
ARTICLE VII
Concerning Owner Trustee
________________________
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
________________________________
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement and
each Supplement. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of any Series Owner Trust Estate
upon the terms of this Agreement and the related Supplement and Basic
Documents. The Owner Trustee shall not be answerable or accountable
hereunder or under the related Supplement and the related Basic Document
under any circumstances, except (i) for its own willful misconduct or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made in good faith by the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;
(c) No provision of this Agreement, any Supplement or any Basic
Document shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights or
powers hereunder or under any Supplement or any Basic Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes of any Series;
(e) The Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or any Supplement or for the
due execution hereof by the Depositor or the Company or for the form,
character, genuineness, sufficiency, value or validity of any Series Owner
Trust Estate, or for or in respect of the validity or sufficiency of any
Basic Documents, other than the certificate of authentication on the Trust
Certificates of any Series, and the Owner Trustee shall in no event assume or
incur any liability, duty or obligation to any Noteholder or to any Owner,
other than as expressly provided for herein or expressly agreed to in the
related Basic Documents;
(f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, CFC, as Seller or Depositor, the Company,
the Indenture Trustee or the Servicer of any Series under any of the related
Basic Documents or otherwise, and the Owner Trustee shall have no obligation
or liability to perform the obligations of the Trust under this Agreement,
any Supplement or any Basic Documents that are required to be performed by
the Administrator under the related Administration Agreement, the Indenture
Trustee under the related Indenture or the Servicer or CFC, as Depositor or
as Seller, under the related Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation under this Agreement or any
Supplement or otherwise or in relation to this Agreement, any Supplement or
any Basic Document, at the request, order or direction of any of the Owners,
unless such Owners have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement, any
Supplement or any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall
________________________
furnish to the Owners of a Series, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents for such Series.
SECTION 7.03. Representations and Warranties. The Owner Trustee
_______________________________
hereby represents and warrants, as of the date on which this Agreement is
executed and delivered and as of each date on which a Supplement is executed
and delivered, to the Depositor and the Company and for the benefit of the
Owners that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and such Supplement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and such Supplement, and this
Agreement and such Supplement have been executed and delivered by one of its
officers who is duly authorized to execute and deliver this Agreement and
such Supplement on its behalf.
(c) Neither the execution or the delivery by it of this Agreement and
such Supplement, nor the consummation by it of the transactions contemplated
hereby or thereby, nor compliance by it with any of the terms or provisions
hereof or thereof will contravene any federal or Delaware law, governmental
rule or regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default under its
charter documents or bylaws or any indenture, mortgage, contract, agreement
or instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee
___________________________
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept
a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by
the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith
in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement, any
Supplement or any Basic Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled Persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the written opinion or advice of any such counsel, accountants or other such
Persons and not contrary to this Agreement, any Supplement or any Basic
Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as
_____________________________________
provided in this Article VII, in accepting the trusts hereby created
_____________________________ acts solely as Owner Trustee hereunder and
under each Supplement and not in its individual capacity, and all Persons
having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document shall look only to the
applicable Series Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
_____________________________________________________
Receivables. The recitals contained herein and in any Supplement and the
___________
related Trust Certificates (other than the signature and countersignature of
the Owner Trustee on the Trust Certificates) shall be taken as the statements
of the Depositor and the Company, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Supplement or any Basic Document or of the Trust Certificates of any Series
(other than the signature and countersignature of the Owner Trustee on the
Trust Certificates) or the Notes of any series, or of any Receivable or
related documents. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any
security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to
the sufficiency of any Series Owner Trust Estate or its ability to generate
the payments to be distributed to the related Certificateholders under this
Agreement or the related Supplement or the Noteholders under the Indenture
for the related Series, including, without limitation: the existence,
condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment;
the completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor, the Company or the Servicer with
any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation, or
any action of the Administrator, the Indenture Trustee or the Servicer for
any Series or any subservicer taken in the name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes.
____________________________________________________
The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Trust Certificates or Notes and may deal with the
Depositor, the Company, the Administrator, the Indenture Trustee and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act
_____________________________________________________
Licenses. The Owner Trustee, in its individual capacity, shall use its best
________
efforts to maintain, and the Owner Trustee, as Owner Trustee, shall cause the
Trust to use its best efforts to maintain, the effectiveness of all licenses
required under the Pennsylvania Motor Vehicle Sales Finance Act in connection
with this Agreement, each Supplement and the Basic Documents and the
transactions contemplated hereby and thereby until such time as the Trust
shall terminate in accordance with the terms hereof.
ARTICLE VIII
Compensation of Owner Trustee
_____________________________
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
_________________________________
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Depositor and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Depositor for its other reasonable expenses hereunder and under each
Supplement, including the reasonable compensation, expenses and disbursements
of such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and its
duties hereunder.
SECTION 8.02. Indemnification. The Depositor shall be liable as
_______________
primary obligor for, and shall indemnify the Owner Trustee and its
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement,
any Supplement, any Basic Documents, any Series Owner Trust Estate, the
administration of any Series Owner Trust Estate or the action or inaction of
the Owner Trustee hereunder or under any Supplement, except only that the
Depositor shall not be liable for or required to indemnify an Indemnified
Party from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 7.01. The indemnities contained
in this Section shall survive the resignation or termination of the Owner
Trustee or the termination of this Agreement or any Supplement. In any event
of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall
be subject to the approval of the Depositor, which approval shall not be
unreasonably withheld.
SECTION 8.03. Payments to Owner Trustee. Any amounts paid to the
__________________________
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part
of any Series Owner Trust Estate immediately after such payment.
ARTICLE IX
Dissolution and Termination of Trust Agreement
______________________________________________
SECTION 9.01. Dissolution of the Trust and Termination of Trust
_____________________________________________________
Agreement. (a) This Agreement (other than Article VIII) and the Trust shall
_________
terminate and be of no further force or effect upon the final distribution by
the Owner Trustee of all moneys or other property or proceeds of each Series
Owner Trust Estate in accordance with the terms of the related Supplement,
Indenture, Sale and Servicing Agreement and Article V. The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner shall not
(x) operate to terminate this Agreement, the Trust or the related Supplement
or Subdivision or (y) entitle such Owner's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or such Series Owner
Trust Estate or Subdivision or (z) otherwise affect the rights, obligations
and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), none of the Depositor, the
Company or any Owner shall be entitled to revoke or terminate the Trust or
any Subdivision.
(c) Notice of any dissolution and termination of the Trust, specifying
the Distribution Date upon which Certificateholders of each Series then
outstanding shall surrender their Trust Certificates to the Paying Agent for
payment of the final distribution and cancellation, shall be given by the
Owner Trustee by letter to such Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer
given pursuant to each related Sale and Servicing Agreement, stating (i) the
Distribution Date upon or with respect to which final payment of such Trust
Certificates shall be made upon presentation and surrender of such Trust
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of such Trust Certificates at the office
of the Paying Agent therein specified. The Owner Trustee shall give such
notice to the Certificate Registrar (if other than the Owner Trustee) and the
Paying Agent at the time such notice is given to such Certificateholders.
Upon presentation and surrender of such Trust Certificates, the Paying Agent
shall cause to be distributed to Certificateholders amounts distributable on
such Distribution Date pursuant to Section 5.02.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give
a second written notice to the remaining Certificateholders to surrender
their Trust Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice all the
Trust Certificates shall not have been surrendered for cancellation, the
Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement.
Subject to applicable escheat laws, any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Owner Trustee to the
Company for the related Series.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
______________________________________________________
SECTION 10.01. Eligibility Requirements for Owner Trustee. The
_____________________________________________
Owner Trustee shall at all times be a corporation satisfying the provisions
of Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) time deposits that are
rated at least A-1 by Standard & Poor's and P-1 by Moody's. If such
corporation shall publish reports of condition at least annually pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
________________________________________
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon
receiving such notice of resignation, the Administrator shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee. If no successor Owner Trustee
shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Owner Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign
after written request therefor by the Administrator, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee, and
shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall provide notice
of such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
_______________________
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective, and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Administrator and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice thereof to all
Certificateholders, each Indenture Trustee, the Noteholders of each Series
and the Rating Agencies. If the Administrator shall fail to mail such notice
within 10 days after acceptance of such appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at
the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
_____________________________________________
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant
__________
to Section 10.01 and, provided, further, that the Owner Trustee shall mail
__________________
notice of such merger or consolidation to the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
____________________________________________________
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of any Series Owner Trust Estate or any Financed Vehicle may at the time
be located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Administrator and Owner Trustee to act as co-
trustee, jointly with the Owner Trustee, or as separate trustee or separate
trustees, of all or any part of any Series Owner Trust Estate, and to vest in
such Person, in such capacity, such title to the Trust or any part thereof
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, the Owner Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee under this Agreement shall be required to
meet the terms of eligibility as a successor Owner Trustee pursuant to
Section 10.01 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by
the Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to any Series Owner
Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement or
any Supplement; and
(c) The Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement or the related Supplement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor co-trustee or
separate trustee.
ARTICLE XI
Miscellaneous
_____________
SECTION 11.01. Supplements and Amendments. This Agreement and any
__________________________
Supplement may be amended by the Depositor, the applicable Company and the
Owner Trustee, with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholders of any Series, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders of any Series;
provided, however, that such action shall not, as evidenced by an Opinion of
__________________
Counsel, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement and any Supplement may also be amended from time to time
by the Depositor, the Company and the Owner Trustee, with prior written
notice to the Rating Agencies, with the consent of the Holders (as defined in
the related Indenture) of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes of each Series adversely affected thereby and
the consent of the Holders of Trust Certificates evidencing not less than a
majority of the Percentage Interests evidenced by the Trust Certificates of
each Series adversely affected thereby, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall
___________________
(a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables of a Series or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders of a Series or (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes of a Series or of the
Percentage Interests evidenced by the Trust Certificates of a Series required
to consent to any such amendment, without the consent of the Holders of all
the outstanding Notes and Trust Certificates of a Series.
Promptly after the execution of any such amendment or consent in respect
of a Series, the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder of such
Series, the Indenture Trustee of such Series and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
(and any other consents of Certificateholders provided for in this Agreement,
any Supplement or any Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement, any
Supplement or the Certificate of Trust, the Owner Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment
that affects the Owner Trustee's own rights, duties or immunities under this
Agreement, any Supplement or otherwise.
In connection with the execution of any amendment to this Trust
Agreement, any Supplement or any amendment of any other agreement to which
the Issuer is a party, the Owner Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel to the effect that such
amendment is authorized or permitted by the related Basic Documents and that
all conditions precedent in such Basic Documents for the execution and
delivery thereof by the Trust or the Owner Trustee, as the case may be, have
been satisfied.
SECTION 11.02. No Legal Title to any Series Owner Trust Estate in
_____________________________________________________
Owners. The Owners shall not have legal title to any part of any Series
______
Owner Trust Estate. The Owners shall be entitled to receive distributions
with respect to their undivided ownership interest therein only in accordance
with Articles V and IX and the related Supplement. No transfer, by operation
of law or otherwise, of any right, title or interest of the Owners of a
Series to and in their ownership interest in the related Series Owner Trust
Estate shall operate to terminate this Agreement or the related Supplement or
the trusts hereunder or thereunder or entitle any transferee to an accounting
or to the transfer to it of legal title to any part of such Series Owner
Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Subject to Section
________________________________
2.10 the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Company, the Owners, the Administrator and, to
the extent expressly provided herein, each Indenture Trustee and the
Noteholders of each Series, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in any Series Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly specified
_______
or permitted by the terms hereof, all notices shall be in writing and shall
be deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that
notice to the Owner Trustee shall be deemed given only upon actual receipt by
the Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to Chrysler Financial Corporation,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Assistant
Secretary; if to the Company, addressed to Premier Receivables L.L.C.,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Assistant
Secretary; or, as to each party, at such other address as shall be designated
by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the related Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement that
____________
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be
_______________________
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
______________________
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor, the Company and its permitted assignees, the Owner Trustee and
its successors and each Owner and its successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of
such Owner.
SECTION 11.08. Covenants of Company. In the event that any
_______________________
litigation with claims in excess of $1,000,000 to which the Company is a
party which shall be reasonably likely to result in a material judgment
against the Company that the Company will not be able to satisfy shall be
commenced by an Owner, during the period beginning nine months following the
commencement of such litigation and continuing until such litigation is
dismissed or otherwise terminated (and, if such litigation has resulted in a
final judgment against the Company, such judgment has been satisfied), the
Company shall not make any distribution on or in respect of its membership
interests to any of its members, or repay the principal amount of any
indebtedness of the Company held by CFC, unless (i) after giving effect to
such distribution or repayment, the Company's liquid assets shall not be less
than the amount of actual damages claimed in such litigation or (ii) the
Rating Agency Condition shall have been satisfied with respect to any such
distribution or repayment. The Company will not at any time institute
against the Trust any bankruptcy proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, the Trust Agreement or any of
the Basic Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering into
___________
this Agreement, each Certificateholder, by accepting a Trust Certificate, and
the Indenture Trustee of each Series and each Noteholder of each Series, by
accepting the benefits of this Agreement, hereby covenant and agree that they
will not at any time institute against the Company or the Trust, or join in
any institution against the Company or the Trust of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Trust Certificates of
any Series, the Notes of any Series, this Agreement or any of the Basic
Documents for any Series.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
___________
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the related Subdivision only
and do not represent interests in or obligations of the Depositor, the
Servicer, the Company, the Administrator, the Owner Trustee, the Indenture
Trustee of any Series or any Affiliate thereof and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement and the related Supplement, the related Trust
Certificates or the related Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
________
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
______________
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. Trust Certificate Transfer Restrictions. Unless
__________________________________________
otherwise specified in any Supplement, the Trust Certificates of any Series
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or
(iii) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (each, a "Benefit Plan"). By accepting and
holding a Trust Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan.
SECTION 11.14. Depositor Payment Obligation. The Depositor shall be
____________________________
responsible for payment of the Administrator's fees under the Administration
Agreement for any Series and shall reimburse the Administrator for all
expenses and liabilities of the Administrator incurred thereunder. In
addition, the Depositor shall be responsible for the payment of all fees and
expenses of the Trust, the Owner Trustee and the Indenture Trustee for each
Series paid by any of them in connection with any of their obligations under
the related Basic Documents to obtain or maintain any required license under
the Pennsylvania Motor Vehicle Sales Finance Act.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION, as Depositor
By:
__________________________________________
Name:
Title:
[__________________________]
By:
By:
__________________________________________
Name:
Title:
[______________________________]
not in its individual capacity but solely as
Owner Trustee
By:
__________________________________________
Name:
Title:
EXHIBIT A
Form of Trust Certificate
_________________________
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN
SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS CERTIFICATE IS ISSUED (A
COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM THE OWNER TRUSTEE OR UPON
REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN INVESTMENT LETTER IN
WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
NUMBER Percentage
R-__ Interest: _______%
PREMIER AUTO TRUST 199_-_, Series 199_-_
ASSET BACKED CERTIFICATE, Series 199_-_
evidencing a fractional undivided interest in the Subdivision of the Trust
for Series 199_-_, as defined below, the property of which includes a pool of
retail installment sale contracts and the Amortizing Payments on the Fixed
Value Receivables (each, as defined herein) secured by new and used
automobiles and light duty trucks.
(This Trust Certificate does not represent an interest in or obligation of
Chrysler Financial Corporation or any of its affiliates, except to the extent
described below.)
THIS CERTIFIES THAT _______________________________ is the registered
owner of a ________________ PERCENT nonassessable, fully-paid, undivided
percentage interest in the Subdivision for Series 199_-_ of Premier Auto
Trust 199_-_ (the "Trust"), formed by Chrysler Financial Corporation, a
Michigan corporation (the "Depositor"), and [Premier Receivables L.L.C., a
Michigan limited liability company] (the "Company").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
_____________________________, _____________________________,
as Owner Trustee or as Owner Trustee
by: ________________________,
as Authenticating Agent
by:
____________________________________________
Authorized Signatory
by:
_________________________________
Authorized Signatory
The Trust was created pursuant to a Trust Agreement dated as of ________
__, 199_, as amended and restated by an Amended and Restated Trust Agreement
dated as of ________, 199_ (as so amended and restated and further amended or
supplemented from time to time, the "Trust Agreement"), among the Depositor,
the Company and ____________________, as owner trustee (the "Owner Trustee"),
a summary of certain of the pertinent provisions of which is set forth below.
The Subdivision for Series 199_-_ of the Trust (the "Series 199_-_
Subdivision") was created pursuant to the Supplement (the "Series 199_-_
Supplement") dated ___________, 199_-_ to the Trust Agreement. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement, the Series 199_-_
Supplement or the Sale and Servicing Agreement dated as of _______, 199_ (as
amended and supplemented from time to time, the "Sale and Servicing
Agreement"), between the Trust and the Depositor, as seller and as servicer
(in such capacity, the "Servicer"), as applicable.
This Certificate is one of the duly authorized certificates designated
as "Asset Backed Certificates, Series 199_-_" (herein called the "Series
199_-_ Trust Certificates"). Also issued under an Indenture dated as of
_______, 199_ (the "Indenture"), between the Trust and The First National
Bank of Chicago, as indenture trustee, are the five classes of Notes
designated as "Class A-1 ____% Asset Backed Notes," "Class A-2 ____% Asset
Backed Notes," "Class A-3 ____% Asset Backed Notes," "Class A-4 ____% Asset
Backed Notes" and "Class B ____% Asset Backed Notes" (collectively, the
"Series 199_-_ Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Series 199_-_ Trust Certificate by
virtue of its acceptance hereof assents and by which such Holder is bound.
The property of the Series 199_-_ Subdivision consists of a pool of retail
installment sale contracts for new and used automobiles and light duty trucks
and the Amortizing Payments on the Fixed Value Receivables (collectively, the
"Receivables"), all monies received on or after ________ __, 1997, security
interests in the vehicles financed thereby, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement, the Series 199_-_ Supplement
and the Sale and Servicing Agreement and all proceeds of the foregoing. The
term "Fixed Value Receivables" shall mean retail sale contracts secured by
new automobiles or light duty trucks with a series of fixed level payment
monthly installments (the "Amortizing Payments") and a final fixed value
payment that is greater than each Amortizing Payment. Distributions, if any,
in respect of this Series 199_-_ Trust Certificate will be made pursuant to
Section 5.02 of the Trust Agreement.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholder that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Series 199_-_
Subdivision will be treated as a security arrangement for the issuance of
debt by the sole Certificateholder. The Company, by acceptance of the Series
199_-_ Trust Certificates, agrees to treat, and to take no action
inconsistent with the above treatment for so long as the Company is the sole
Owner.
Solely in the event the Series 199_-_ Trust Certificates are held by
more than a single Owner, it is the intent of the Depositor, the Company, the
Servicer and the Certificateholders that, for purposes of federal income,
state and local income and single business tax and any other income taxes,
the Series 199_-_ Subdivision will be treated as a partnership and the
Certificateholders (including the Company) will be treated as partners in the
partnership. The Company and the other Certificateholders, by acceptance of
a Series _-_ Trust Certificate, agree to treat, and to take no action
inconsistent with the Treatment of, the Series _-_ Trust Certificates for
such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Company, or join in any institution against the Company
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Series _-_ Trust Certificates, the Series _-_ Notes, the Trust Agreement or
any of the Basic Documents.
The holders of the Series 199_ Trust Certificates shall not have legal
title to any part of the Series Owner Trust Estate of any other Series of
Trust Certificates.
Distributions on this Series 199_-_ Trust Certificate will be made as
provided in the Trust Agreement and the Series 199_-_ Supplement by the Owner
Trustee by wire transfer or check mailed to the Certificateholder of record
in the Certificate Register without the presentation or surrender of this
Series 199_-_ Trust Certificate or the making of any notation hereon. Except
as otherwise provided in the Trust Agreement and the Series 199_-_ Supplement
and notwithstanding the above, the final distribution on this Series 199_-_
Trust Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Series 199_-_ Trust Certificate at the office or agency maintained for
that purpose by the Owner Trustee in the Borough of Manhattan, The City of
New York.
Reference is hereby made to the further provisions of this Series 199_-_
Trust Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Series 199_-_ Trust Certificate shall not entitle the Holder hereof to any
benefit under the Trust Agreement, the Series 199_-_ Supplement or the Sale
and Servicing Agreement or be valid for any purpose.
THIS SERIES 199_-_ TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Series 199_-_ Trust Certificate to
be duly executed.
PREMIER AUTO TRUST 199_-_
By:__________________________________________
Not in its individual capacity
but solely as Owner Trustee
Dated: By:________________________________
Authorized Signatory
[REVERSE OF SERIES 199_-_ TRUST CERTIFICATE]
The Series 199_-_ Trust Certificates do not represent an obligation of,
or an interest in, the Depositor, the Servicer, the Company, the Owner
Trustee or any affiliates of any of them and no recourse may be had against
such parties or their assets, except as expressly set forth or contemplated
herein or in the Trust Agreement, the Series 199_-_ Supplement or the Basic
Documents. In addition, this Series 199_-_ Trust Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement. A copy of each of the Sale
and Servicing Agreement, the Trust Agreement and the Series 199_-_ Supplement
may be examined by any Certificateholder upon written request during normal
business hours at the principal office of the Depositor and at such other
places, if any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and of the Series 199_-_ Supplement and the
modification of the rights and obligations of the Depositor and the Company
and the rights of the Certificateholders under the Trust Agreement and the
Series 199_-_ Supplement at any time by the Depositor, the Company and the
Owner Trustee with the consent of the Holders of the Series 199_-_ Trust
Certificates and the Series 199_-_ Notes, each voting as a class, evidencing
not less than a majority of the Percentage Interests evidenced by the
outstanding Series 199_-_ Trust Certificates or a majority of the outstanding
principal balance of the Series 199_-_ Notes of each class. Any such consent
by the Holder of this Series 199_-_ Trust Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Series 199_-_ Trust
Certificate and of any Series 199_-_ Trust Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Series 199_-_ Trust Certificate.
The Trust Agreement also permits the amendment thereof, and of the Series
199_-_ Supplement, in certain limited circumstances, without the consent of
the Holders of any of the Series 199_-_ Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Series 199_-_ Trust Certificate is
registerable in the Certificate Register upon surrender of this Series 199_-_
Trust Certificate for registration of transfer at the offices or agencies of
the Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Series 199_-_ Trust
Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The
initial Certificate Registrar appointed under the Trust Agreement is
________________________, New York, New York.
Except as provided in the Trust Agreement and the Series 199_-_
Supplement, the Series 199_-_ Trust Certificates are issuable only as
registered Trust Certificates. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Series 199_-_ Trust
Certificates are exchangeable for new Series 199_-_ Trust Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the Owner Trustee
or the Certificate Registrar may require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of
the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement as
they related to the Series 1997 _-_ Subdivision shall terminate upon the
payment to Series 199_-_ Certificateholders of all amounts required to be
paid to them pursuant to the Trust Agreement, the Series 199_-_ Supplement
and the Sale and Servicing Agreement and the disposition of all property held
as part of the Series Owner Trust Estate. The Servicer of the Receivables
may at its option purchase the Series Owner Trust Estate at a price specified
in the Sale and Servicing Agreement, and such purchase of the Receivables and
other property of the Trust will effect early retirement of the Trust
Certificates; provided, however, such right of purchase is exercisable only
_________________
as of the last day of any Collection Period as of which the Series 199_-_
Pool Balance is less than or equal to 10% of the Series 199_-_ Original Pool
Balance.
The Series 199_-_ Trust Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject
to the provisions of Title I of ERISA, (b) a plan described in
Section 4975(e)(1) of the Code or (c) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity or which
uses plan assets to acquire Trust Certificates (each, a "Benefit Plan"). By
accepting and holding this Series 199_-_ Trust Certificate, the Holder hereof
shall be deemed to have represented and warranted that it is not a Benefit
Plan.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________
(Please print or type name and address, including postal zip code, of
assignee)
the within Trust Certificate, and all rights thereunder, and hereby
irrevocably constitutes and appoints , attorney,
_____________________________
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_________________
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT B
Form of Certificate of Trust of Premier Auto Trust 199_-_
_________________________________________________________
THIS Certificate of Trust of Premier Auto Trust 199_-_ (the
"Trust"), dated ___________, 199_, is being duly executed and filed by
_____________________________, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
_________
3801 et seq.).
_______
1. Name. The name of the business trust formed hereby is PREMIER
____
AUTO TRUST 199_-_.
2. Delaware Trustee. The name and business address of the
_________________
trustee of the Trust in the State of Delaware is
_____________________________, Attention: Corporate Trustee Administration
Department.
3. Series Trust. The Trust shall be a series trust and the
_____________
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series shall be enforceable
against the assets of such series only, and not against the assets of the
Trust generally.
4. Effective Date. This Certificate of Trust shall be effective
_______________
upon its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
_______________________________________________
not in its individual capacity but solely as
owner trustee under the Trust Agreement dated
as of ____________, 199_-_
By:
_________________________________________
Name:
Title:
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust 199_-_
Asset Backed Certificates, Series 199_-_
________________________________________
Ladies and Gentlemen:
In connection with our disposition of the above-referenced Asset Backed
Certificates Series 199_-_ (the "Series 199_-_ Certificates") we certify that
(a) we understand that the Series 199_-_ Certificates have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
being transferred by us in a transaction that is exempt from the registration
requirements of the Act and (b) we have not offered or sold any Series 199_-_
Certificates to, or solicited offers to buy any Series 199_-_Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, in a manner that would be deemed, or taken any other action
which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:
__________________________________
Authorized Officer
EXHIBIT D
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust 199_-_
Asset Backed Certificates Series 199_-_
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset Backed
Certificates, Series 199_-_ (the "Series 199_-_ Certificates") we certify
that (a) we understand that the Series 199_-_ Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws,
(b) we are an "accredited investor," as defined in Regulation D under the
Act, and have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of investments in the
Series 199_-_ Certificates, (c) we have had the opportunity to ask questions
of and receive answers from the seller concerning the purchase of the Series
199_-_ Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Series 199_-_
Certificates, (d) we are acquiring the Series 199_-_ Certificates for
investment for our own account and not with a view to any distribution of
such Series 199_-_ Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Series 199_-_ Certificates in
accordance with clause (f) below), (e) we have not offered or sold any Series
199_-_ Certificates to, or solicited offers to buy any Series 199_-_
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action that would result in a
violation of Section 5 of the Act or any state securities laws and (f) we
will not sell, transfer or otherwise dispose of any Series 199_-_
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act and in
compliance with any relevant state securities laws or is exempt from such
registration requirements and, if requested, we will at our expense provide
an Opinion of Counsel satisfactory to the addresses of this certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Series 199_-_
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Amended
and Restated Trust dated as of _______, 199_, between Chrysler Financial
Corporation, as Depositor, Premier Receivables L.L.C. and Chase Manhattan
Bank Delaware, as Owner Trustee and the Series 199_-_ Series Supplement
thereto dated as of ________________, 199_-_.
Very truly yours,
[NAME OF TRANSFEREE]
By:
____________________________________
Authorized Officer
EXHIBIT E
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust 199_-_
Asset Backed Certificates, Series 199_-_
________________________________________
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset Backed
Certificates, Series 199_-_ (the "Series 199_-_ Certificates") we certify
that (a) we understand that the Series 199_-_ Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws,
(b) we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of investments in the
Series 199_-_ Certificates, (c) we have had the opportunity to ask questions
of and receive answers from the seller concerning the purchase of the Series
199_-_ Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Series 199_-_
Certificates, (d) we have not, nor has anyone acting on our behalf, offered,
transferred, pledged, sold or otherwise disposed of the Series 199_-_
Certificates or any interest in the Series 199_-_ Certificates, or solicited
any offer to buy, transfer, pledge or otherwise dispose of the Series 199_-_
Certificates or any interest in the Series 199_-_ Certificates from any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action that would
constitute a distribution of the Series 199_-_ Certificates under the Act or
that would render the disposition of the Series 199_-_ Certificates a
violation of Section 5 of the Act or any state securities laws or require
registration pursuant thereto, and we will not act, or authorize any person
to act, in such manner with respect to the Series 199_-_ Certificates, and
(e) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act. We are aware that the sale to us is being made in
reliance on Rule 144A. We are acquiring the Series 199_-_ Certificates for
our own account or for resale pursuant to Rule 144A and understand that such
Series 199_-_ Certificates may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A or (ii) pursuant to another exemption from
registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:
__________________________________
Authorized Officer
EXHIBIT F
FORM OF SUPPLEMENT
SERIES 199_-_ SUPPLEMENT, dated as of ____________, 199_ (this "Series
Supplement") among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as
Depositor (the "Depositor"), ______________, a ____________ (the "Company")
and _____________, a Delaware banking corporation, as Owner Trustee (the
"Owner Trustee") is made pursuant to the Amended and Restated Trust Agreement
dated as of ____________, 199_ (as amended or supplemented from time to time,
the "Trust Agreement") among the Depositor, the Company and the Owner
Trustee.
The Trust Agreement provides, among other things, that the parties
thereto may from time to time enter into a supplement to the Trust Agreement
to provide for the issuance by Trust of one or more Series of Notes and/or
Trust Certificates.
Pursuant to this Series Supplement, the Trust shall create a new series
of Trust Certificates and authorize the issuance of a new Series of Notes.
SECTION 1. Designation of Series 199_-_ Trust Certificates. There
-----------------------------------------------
is hereby created a Series of Trust Certificates to be issued under the Trust
Agreement and this Series Supplement that shall be known as the "Series 199_-
_ Trust Certificates."
SECTION 2.1. Conflicts; Definitions. In the event that any term or
----------------------
provision contained herein shall conflict with or be inconsistent with any
provision contained in the Trust Agreement, the terms and provisions of this
Series Supplement shall govern with respect to the Series 199_-_ Trust
Certificates. Each capitalized term defined herein shall relate only to the
Series 199_-_ Trust Certificates and no other Series of Trust Certificates
issued by the Trust.
"Administration Agreement" shall mean the Administration Agreement
------------------------
dated as of ______________, 199_ among the Trust, the Indenture Trustee and
CFC, as Administrator.
"Administrator" shall mean CFC and its successors as Administrator
-------------
pursuant to the terms of the Administration Agreement.
"Company" shall mean ________, a __________ and any successor in
-------
interest.
"Series 199_ Note Depository Agreement" shall mean the Agreement
-------------------------------------
dated as of _______, 199_ among the Trust, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing
Agency, relating to the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes and the Class B Notes, as the same may be amended
and supplemented from time to time.
"Series 199_ Indenture" shall mean the Indenture dated __________,
---------------------
199_ between the Trust and ____________, as Indenture Trustee.
"Series 199_ Owner Trust Estate" shall mean all right, title and
------------------------------
interest of the Trust in and to the property and rights assigned to the Trust
pursuant to Article II of the Sale and Servicing Agreement, all funds on
deposit from time to time in the Series 199_ Trust Accounts and the Series
199_ Certificate Distribution Account and all other property of the Trust
allocated to the Series 199_ Subdivision from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing
Agreement and the Administration Agreement.
"Series 199_ Sale and Servicing Agreement" shall mean the Sale and
----------------------------------------
Servicing Agreement dated as of ________, 199_, between the Trust, as issuer,
and the Depositor, as seller and servicer, as the same may be amended or
supplemented from time to time.
SECTION 2.2. Other Definitional Provisions. (a) Capitalized terms
-----------------------------
used and not otherwise defined herein have the meanings assigned to them in
the Trust Agreement and the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Series Supplement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Series Supplement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Series Supplement or in any such certificate or other
document, and accounting terms partly defined, shall have the respective
meanings given to them under generally accepted accounting principles. To
the extent that the definitions of accounting terms in this Series Supplement
or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provisions of this Series
Supplement; and the term "including" and its variants shall mean "including
without limitation".
(e) The definitions contained in this Series Supplement are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplements and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
SECTION 3. Creation of Series 199_ Subdivision. There is hereby
-----------------------------------
created a Subdivision of the Trust for Series 199_ (the "Series 199_
Subdivision"). The Series 199_ Owner Trust Estate shall be the only assets
of the Series 199_ Subdivision.
Separate and distinct records (including tax records) shall be
maintained for the Series 199_ Trust Certificates, the Series 199_
Subdivision and the Series 199_ Owner Trust Estate, and the Series 199_ Owner
Trust Estate shall be maintained and accounted for separately from the Series
Owner Trust Estate of any other Series. The Series 199_ Owner Trust Estate
shall not be subject to claims, debts, liabilities, expenses or obligations
arising from or with respect to any other Series or the Trust generally. The
debts, obligations and expenses incurred, contracted for or otherwise
existing with respect to the Series 199_ Subdivision shall be enforceable
against the Series 199_ Owner Trust Estate only and not against the assets of
the Trust generally or any other Series. The statutory provisions of Section
3804 of the Business Trust Statute relating to limitations on inter-series
liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the Certificate Trust) are applicable to the Trust and each
Series of Trust Certificates.
Neither the Depositor, the Company nor any Holder of a Series 199_ Trust
Certificate shall direct the Owner Trustee to (i) take any action that would
cause the Series 199_ Owner Trust Estate to be substantively consolidated
into any other Series Owner Trust Estate of any other Series such that it
will have its separate existence disregarded in the event of any insolvency
event with respect to any Certificateholder of such Series, the Trust or
another Series, (ii) to commingle any of the Series 199_ Owner Trust Estate
with the Series Owner Trust Estate of any other Series, (iii) to maintain the
financial and accounting books and records and statements of the Series 199_
Subdivision, if any, in a manner such that they cannot be separated from
those of any other Series, (iv) to take any action that would cause (a) the
funds and other assets of the Series 199_ Subdivision, if any, not be
identifiable or the bank accounts, records and books of account, if any, of
the Series 199_ Subdivision, not to be inseparable from those of any other
Subdivision and (b) the Trust to pay, other than from assets of the Series
199_ Subdivision, any obligations or indebtedness of any kind incurred by the
Series 199_ Subdivision and payable by the Trust pursuant to this Series
Supplement, (v) to maintain the assets and liabilities of the Series 199_
Subdivision so that they are not readily ascertainable from those of any
other Subdivision and subject to segregation without requiring substantial
time or expense to effect and account for such segregated assets and
liabilities, (vi) to take any actions with respect to the Series 199_
Subdivision except in its capacity as Owner Trustee in respect of such
Subdivision. The Administrator shall have the right to take any action on
behalf of the Trust to enforce the foregoing provisions of this Series
Supplement for the benefit of the Trust and of the Series 199_ Subdivision.
SECTION 3. Issuance of Series 199_ Trust Certificates. The Owner
------------------------------------------
Trustee shall execute, authenticate and deliver to the Company the Series
199_ Trust Certificates in accordance with Article III of the Trust
Agreement.
SECTION 4. Series 199_ Basic Documents. The Owner Trustee shall
---------------------------
cause the Trust to execute and deliver the Series 199_ Indenture, the Series
199_ Notes, the Sale and Servicing Agreement and the Administration
Agreement. The Trust shall perform its obligations under such agreements.
SECTION 5. Application of Series 199_ Subdivision Funds. The Owner
--------------------------------------------
Trustee shall establish the Series 199_ Certificate Distribution Account in
accordance with Section 5.01 of the Trust Agreement. The Owner Trustee shall
distribute the funds deposited into the Series 199_ Certificate Distribution
Account pursuant to the Sale and Servicing Agreement to the Series 199_
Certificateholders in accordance with Section 5.02 on each Distribution Date.
SECTION 6. Ratification of Trust Agreement. As supplemented by this
-------------------------------
Series Supplement, the Trust Agreement is in all respects ratified and
confirmed and the Trust Agreement as so supplemented by this Series
Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 7. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one
and the same instrument.
SECTION 8. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION,
as Depositor
By:____________________________
Name:
Title:
(______________________________)
By:
By:____________________________
Name:
Title:
(______________________________)
not in its individual capacity by solely as Owner Trustee
By:____________________________
Name:
Title:
Exhibit 5.1
(Brown & Wood LLP Letterhead)
August 1, 1997
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Corporation
Registration Statement on Form S-3
(File No. 333-31093)
---------------------------------------
Ladies and Gentlemen:
We have acted as special counsel for you in connection with the
Registration Statement on (File No. 333-31093) Form S-3 (the "Registration
Statement"), filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), for the registration under
the Act of $8,000,000,000 aggregate principal amount of asset backed notes
(the "Notes") and asset backed certificates ("Certificates" and, together
with the Notes, the "Securities"). Each series of such Securities will be
issued pursuant to (i) a separate pooling and servicing agreement (the
"Pooling and Servicing Agreement"), among Chrysler Financial Corporation (the
"Registrant") and a trustee to be identified in the prospectus supplement for
such series of Securities, (ii) a trust agreement (the "Trust Agreement")
among a trustee named in the related prospectus supplement, the Registrant
and another entity named in such prospectus supplement and/or (iii) an
indenture (the "Indenture") between the trust formed pursuant to the Trust
Agreement and the indenture trustee named in the related prospectus
supplement.
We have made such investigation of law as we deemed appropriate and have
examined the proceedings heretofore taken and are familiar with the
procedures proposed to be taken by the Registrant in connection with the
authorization, issuance and sale of the Securities.
Based on the foregoing, we are of the opinion that:
(i) When each Pooling and Servicing Agreement and/or Indenture in
respect of which we have participated has been duly authorized by all
necessary corporate action and has been duly executed and delivered, it will
constitute a valid and binding obligation of the Registrant enforceable in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law); and
(ii) When the issuance, execution and delivery of the Securities issued
pursuant to a Pooling and Servicing Agreement or an Indenture in respect of
which we have participated have been duly authorized by all necessary
corporate action, and when such Securities have been duly executed and
delivered and sold and paid for as described in the Registration Statement,
such Securities will be legally and validly issued and the holders of such
Securities will be entitled to the benefits provided by the Pooling and
Servicing Agreement or the Indenture, as applicable, pursuant to which such
Securities were issued.
In rendering the foregoing opinions, we have assumed the accuracy and
truthfulness of all public records regarding the Registrant and of all
certifications, documents and other proceedings examined by us that have been
executed or certified by officials of the Registrant acting within the scope
of their official capacities and have not verified the accuracy or
truthfulness thereof. We have also assumed the genuineness of the signatures
appearing upon such public records, certifications, documents and
proceedings. In addition, we have assumed that each such Pooling and
Servicing Agreement and Indenture and the related Securities, as applicable,
will be executed and delivered in substantially the form filed as exhibits to
the Registration Statement with such changes acceptable to us, and that such
Securities will be sold as described in the Registration Statement. We
express no opinion as to the laws of any jurisdiction other than the laws of
the State of New York and the federal laws of the United States of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus forming a part of the Registration
Statement, without implying or admitting that we are "experts" within the
meaning of the Act or the rules and regulations of the Securities and
Exchange Commission issued thereunder, with respect to any part of the
Registration Statement, including this exhibit.
Very truly yours,
Brown & Wood LLP
Exhibit 5.2
(Richards, Layton & Finger letterhead)
August 1, 1997
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Corporation
Registration Statement on Form S-3 (File No. 333-31093)
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Chrysler Financial
Corporation (the "Registrant") in connection with the Registration Statement
on Form S-3 (File No. 333-31093)(the "Registration Statement"), filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), for the registration under the Act of up to
$8,000,000,000 aggregate principal amount of asset backed notes (the "Notes")
and asset backed certificates (the "Certificates" and together with the
Notes, the "Securities"). Each series of such Securities may be issued
pursuant to a trust agreement (the "Trust Agreement") among a trustee named
in the related prospectus supplement, the Registrant and another entity named
in such prospectus supplement. This opinion is being delivered to you at
your request.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The form of Trust Agreement (including the form of Certificate of
Trust
(the "Certificate of Trust") attached as Exhibit B thereto); and
(b) The Registration Statement.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies
or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement will constitute the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, (ii) the due creation or
due organization or due formation, as the case may be, and valid existence in
good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents examined
by us, and (iv) that each of the parties to the documents examined by us has
the power and authority to execute and deliver, and to perform its
obligations under, such documents. We have not participated in the
preparation of the Registration Statement and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders
thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. When each Trust Agreement in respect of which we have participated
as your counsel has been duly authorized by all necessary corporate action
and has been duly executed and delivered, it will constitute a valid and
binding obligation of the Registrant enforceable in accordance with its
terms; and
2. When the issuance, execution and delivery of the Certificates in
respect of which we have participated as your counsel have been duly
authorized by all necessary corporate action, and when such Certificates have
been duly executed and delivered and sold as described in the Registration
Statement, such Certificates will be legally and validly issued and the
holders of such Certificates will be entitled to the benefits provided by the
Trust Agreement pursuant to which such Certificates were issued.
The foregoing opinions regarding enforceability are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership,
fraudulent conveyance and similar laws relating to or affecting the rights
and remedies of creditors generally, (ii) principles of equity (regardless of
whether considered and applied in a proceeding in equity or at law) and (iii)
the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Opinions" in the Prospectus forming a part of the Registration
Statement. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7
of the Act, or the rules and regulations of the Securities and Exchange
Commission thereunder with respect to any part of the Registration Statement,
including this exhibit. Except as stated above, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
Richards, Layton & Finger
Exhibit 8.1
(Brown & Wood LLP Letterhead)
August 1, 1997
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Corporation
Registration Statement on Form S-3
(File No. 333-31093)
------------------------------------
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 (File
No. 333-31093) on Form S-3 (such registration statement, together with the
exhibits and any amendments thereto as of the date hereof, the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act") for the registration
under the Act of asset backed notes (the "Notes") and asset backed
certificates (the "Certificates") in an aggregate principal amount of up to
$8,000,000,000. As described in the Registration Statement, the Notes and/or
the Certificates will be issued from time to time in series, with each series
being issued by a trust (each, a "Trust") to be formed by the Registrant
pursuant to a Trust Agreement (each, a "Trust Agreement") among the
Registrant, a wholly-owned subsidiary of the Registrant and an owner trustee,
or a Pooling and Servicing Agreement (each, a "Pooling and Servicing
Agreement") between the Registrant and a trustee. Each series may include
one or more classes of Notes, which will be issued pursuant to an Indenture
between the related Trust and an indenture trustee. Each series may include
one or more classes of Certificates, which will be issued pursuant to a Trust
Agreement or a Pooling and Servicing Agreement.
We have advised the Registrant with respect to certain federal income
tax consequences of the proposed issuance of the notes and the Certificates.
This advice is summarized under the headings "Summary of Terms -- Tax Status"
and "Certain Federal Income Tax Consequences" in the Prospectus and "Summary
of Terms - "Tax Status" in the Prospectus Supplements, all a part of the
Registration Statement. Such description does not purport to discuss all
possible federal income tax ramifications of the proposed issuance, but with
respect to those federal income tax consequences that are discussed, in our
opinion, the description is accurate in all material respects.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to a reference to this firm (as special federal
tax counsel to the Trust) under the heading "Certain Federal Income Tax
Consequences" in the Prospectus forming a part of the Registration Statement,
without implying or admitting that we are "experts" within the meaning of the
Act or the rules and regulations of the Commission issued thereunder, with
respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
Brown & Wood LLP
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
-----
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: STEVEN M. WAGNER (312) 407-1819
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
PREMIER AUTO TRUST _______
(each trust that issues notes under the related prospectus and
prospectus supplement)
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O ___________________, AS OWNER TRUSTEE
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ASSET BACKED NOTES
(TITLE OF INDENTURE SECURITIES)
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF
------------------------------
THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
-----------------
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
*EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL
BANK OF CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM
S-3 OF SUNAMERICA INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
OCTOBER 25, 1996 (REGISTRATION NO. 333-14201).
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 22nd day of July, 1997.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY: /S/ STEVEN M. WAGNER
Steven M. Wagner
Vice President
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 22, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of one or more indentures between
Premier Auto Trust 199__-__ and each other Premier Auto Trust 199__-__ that
issues notes under the related prospectus and prospectus supplement and The
First National Bank of Chicago, the undersigned, in accordance with Section
321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal
or State authorities authorized to make such examinations, may be furnished
by such authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /S/ STEVEN M. WAGNER
Steven M. Wagner
Vice President
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1997
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>
DOLLAR AMOUNTS IN C400
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 3,871,170 1.a.
b. Interest-bearing balances(2) 0071 6,498,314 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 2 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 3,901,208 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,612,975 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 23,345,201 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 420,963 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 22,924,238 4.d.
5. Trading assets (from Schedule RD-D) 3545 8,792,158 5.
6. Premises and fixed assets (including capitalized leases) 2145 706,928 6.
7. Other real estate owned (from Schedule RC-M) 2150 6,563 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 61,551 8.
9. Customers' liability to this bank on acceptances outstanding 2155 488,866 9.
10. Intangible assets (from Schedule RC-M) 2143 291,569 10.
11. Other assets (from Schedule RC-F) 2160 1,775,283 11.
12. Total assets (sum of items 1 through 11) 2170 53,930,823 12.
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC-CONTINUED
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 21,550,056 13.a.
(1) Noninterest-bearing(1) RCON 6631 8,895,137 13.a.1
(2) Interest-bearing RCON 6636 12,654,919 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 12,364,650 13.b.
(1) Noninterest bearing RCFN 6631 287,496 13.b.1
(2) Interest-bearing
RCFN 6636 12,077,154 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3.817,421 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 63,621 15.a.
b. Trading Liabilities(from Schedule RC-D)................... RCFD 3548 5,872,831 15b.
16. Other borrowed money:
a. With original maturity of one year or less RCFD 2332 2,607,549 16.a.
b. With original maturity of more than one year RCFD 2333 322,414 16.b.
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 488,866 18.
19. Subordinated notes and debentures RCFD 3200 1,550,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,196,229 20.
21. Total liabilities (sum of items 13 through 20) RCFD 2948 49,833,637 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,944,244 25.
26. a. Undivided profits and capital reserves RCFD 3632 954,885 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 (1,089) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,712) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,097,186 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) RCFD 3300 53,930,823 29.
</TABLE>
<TABLE>
<CAPTION>
<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
for the bank by independent external Number
auditors as of any date during 1996 . . . . . . . . . . . . ....RCFD 6724 . ... 2 M.1.
</TABLE>
<TABLE>
<CAPTION>
<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
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7= Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8= No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
</TABLE>
EXHIBIT 25.2
=========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
PREMIER AUTO TRUST _________
(each trust that issues notes under the related
prospectus and prospectus supplement)
(Exact name of obligor as specified in its charter)
Michigan 38-0961430
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
27777 Franklin Road
Southfield, Michigan 48034-8286
(Address of principal executive offices) (Zip code)
______________________
Asset Backed Notes
(Title of the indenture securities)
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ----------------------------------------------------------------------
Name Address
- ----------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street,
New York New York, N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-
29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of the State
of New York, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 23rd day of July, 1997.
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
March 31, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
Total assets ......................... $54,746,131
LIABILITIES
Deposits:
In domestic offices ................ $25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
Total liabilities .................... 50,560,708
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 19,449)
Cumulative foreign currency transla-
tion adjustments .................. ( 13,034)
Total equity capital ................ 4,185,423
Total liabilities and equity
capital ........................... $54,746,131
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
J. Carter Bacot
Thomas A. Renyi Directors
Exhibit 99.1
SALE AND SERVICING AGREEMENT
between
PREMIER AUTO TRUST 199_-_,
Issuer,
(Series 199_-_)
and
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
Dated as of _______________, 199_
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . 16
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . 16
SECTION 2.02. (Reserved) . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.03. Conveyance of Fixed Value Payments . . . . . . . . . 17
SECTION 2.04. Fixed Value Securities . . . . . . . . . . . . . . . 17
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Receivables. . . . . . . . . . . . . 18
SECTION 3.02. Repurchase upon Breach . . . . . . . . . . . . . . . 22
SECTION 3.03. Custody of Receivable Files . . . . . . . . . . . . . 22
SECTION 3.04. Duties of Servicer as Custodian . . . . . . . . . . . 23
SECTION 3.05. Instructions; Authority To Act . . . . . . . . . . . 23
SECTION 3.06. Custodian's Indemnification . . . . . . . . . . . . . 23
SECTION 3.07. Effective Period and Termination . . . . . . . . . . 24
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer . . . . . . . . . . . . . . . . . 24
SECTION 4.02. Collection and Allocation of Receivable
Payments . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.03. Realization upon Receivables . . . . . . . . . . . . 25
SECTION 4.04. Physical Damage Insurance . . . . . . . . . . . . . . 25
SECTION 4.05. Maintenance of Security Interests in Financed
Vehicles . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.06. Covenants of Servicer . . . . . . . . . . . . . . . . 25
SECTION 4.07. Purchase of Receivables upon Breach . . . . . . . . . 26
SECTION 4.08. Servicing Fee . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.09. Servicer's Certificate . . . . . . . . . . . . . . . 26
SECTION 4.10. Annual Statement as to Compliance; Notice of
Default . . . . . . . . . . . 26
SECTION 4.11. Annual Independent Certified Public Accountants'
Report . . . . . . . . . . . . 27
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables . . . . . . . . . 27
SECTION 4.13. Servicer Expenses . . . . . . . . . . . . . . . . . . 27
SECTION 4.14. Appointment of Subservicer . . . . . . . . . . . . . 28
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts . . . . . . . . . . . 28
SECTION 5.02. Collections . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.03. Application of Collections . . . . . . . . . . . . . 31
SECTION 5.04. (Reserved) . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.05. Additional Deposits . . . . . . . . . . . . . . . . . 31
SECTION 5.06. Distributions . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.07. Reserve Account . . . . . . . . . . . . . . . . . . . 32
SECTION 5.08. (Reserved) . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.09. Statements to Noteholders and Certificateholders . . 34
SECTION 5.10. Net Deposits . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.11. Transfer of Certificates . . . . . . . . . . . . . . 35
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller . . . . . . . . . . . . . . 35
SECTION 6.02. Corporate Existence . . . . . . . . . . . . . . . . . 36
SECTION 6.03. Liability of Seller; Indemnities . . . . . . . . . . 36
SECTION 6.04. Merger or Consolidation of, or Assumption of
Obligations of, Seller . . . . . . . . . . . . . . 37
SECTION 6.05. Limitation on Liability of Seller and Others . . . . 38
SECTION 6.06. Seller May Own Notes . . . . . . . . . . . . . . . . 38
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer . . . . . . . . . . . . . 38
SECTION 7.02. Indemnities of Servicer . . . . . . . . . . . . . . . 39
SECTION 7.03. Merger or Consolidation of, or Assumption of
Obligations of, Servicer . . . . . . . . . . . . . . . . . . . 40
SECTION 7.04. Limitation on Liability of Servicer and Others . . . 40
SECTION 7.05. CFC Not To Resign as Servicer . . . . . . . . . . . . 41
ARTICLE VIII
Default
SECTION 8.01. Servicer Default . . . . . . . . . . . . . . . . . . 41
SECTION 8.02. Appointment of Successor . . . . . . . . . . . . . . 42
SECTION 8.03. Notification to Noteholders and
Certificateholders . . . . . . . . . . . . . . . . . . . 43
SECTION 8.04. Waiver of Past Defaults . . . . . . . . . . . . . . . 43
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables . . . . . . . . 43
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.02. Protection of Title to Trust . . . . . . . . . . . . 45
SECTION 10.03. Notices . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.04. Assignment by the Seller or the Servicer . . . . . . 47
SECTION 10.05. Limitations on Rights of Others . . . . . . . . . . 47
SECTION 10.06. Severability . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.07. Separate Counterparts . . . . . . . . . . . . . . . 48
SECTION 10.08. Headings . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.09. Governing Law . . . . . . . . . . . . . . . . . . . 48
SECTION 10.10. Assignment by Issuer . . . . . . . . . . . . . . . . 48
SECTION 10.11. Nonpetition Covenants . . . . . . . . . . . . . . . 48
SECTION 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee . . . . . . . . . . . . . . . . . . . 49
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A (Reserved)
EXHIBIT B Form of Distribution Statement to Noteholders . . . . B-1
EXHIBIT C Form of Servicer's Certificate . . . . . . . . . . . C-1
SALE AND SERVICING AGREEMENT dated as of _______________, 199_,
between PREMIER AUTO TRUST 199_-_, a Delaware business trust (the
"Issuer"), and CHRYSLER FINANCIAL CORPORATION, a Michigan
corporation, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by Chrysler Financial Corporation in the ordinary course of
business; and
WHEREAS Chrysler Financial Corporation is willing to sell such
receivables to, and to service such receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
(PRELIMINARY STATEMENT
This Agreement relates to Receivables that secure only the Issuer's
Asset Backed Notes, Series 199_-_ that have been issued pursuant to the
Indenture referred to herein and are contained in a Subdivision of the Issuer
formed only for its Series 199_-_ Trust Certificates, which have been issued
pursuant to the Supplement referred to in the definition of Trust Agreement
herein. The Receivables and their proceeds are not available for any other
purpose.)
ARTICLE I
Definitions
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Accelerated Principal Distribution Amount" means, with respect to any
Distribution Date, an amount equal to that portion of the Total Distribution
Amount for such Distribution Date that remains after the payment of (i) the
Servicing Fee, (ii) the Noteholders' Interest Distributable Amount, (iii) the
Regular Principal Distribution Amount and (iv) the amount, if any, required
to be deposited into the Reserve Account on such Distribution Date pursuant
to Section 5.06(a)(ii)(E).
"Amortizing Payment" means with respect to each Fixed Value Receivable
and each Collection Period prior to the date on which the Fixed Value Payment
is due, the amount specified in the applicable Contract in the payment
schedule as the "Amount of Each Payment", except that in the case of a
prepayment, liquidation or repurchase by the Seller or purchase by the
Servicer, the Amortizing Payment shall be equal to the aggregate "Amount of
Each Payment" that has not yet been paid for the period through and including
the last payment prior to the date when the Fixed Value Payment is due less
the amount of the unearned finance charges under the related Contract
allocable to such amount in accordance with the Servicer's customary
procedures.
"Amount Financed" means (i) with respect to a Standard Receivable, the
amount advanced under the Standard Receivable toward the purchase price of
the Financed Vehicle and any related costs, exclusive of any amount allocable
to the premium of force-placed physical damage insurance covering the
Financed Vehicle; and (ii) with respect to a Fixed Value Receivable an amount
equal to the present value of the fixed level payment monthly installments
(not including the amount designated as the Fixed Value Payment) under the
Fixed Value Receivable, assuming that each payment is made on the due date in
the month in which such payment is due, discounted at the APR for such Fixed
Value Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase Agreement.
"Cash Release Amount" means, with respect to a Distribution Date, the
amount equal to _____% of the Regular Principal Distribution Amount for such
Distribution Date.
"Certificate Distribution Account" has the meaning assigned in the Trust
Agreement.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificates" means the (Series 199_-_) 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 Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 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.
"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.
"Class A-4 Final Scheduled Distribution Date" means the _______________
Distribution Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class B Available Amount" means, with respect to a Distribution Date,
the lesser of (i) $______________ less the aggregate amount of any
applications of funds in the Reserve Account pursuant to clause second of
Section 5.07(c)(i) to pay interest on the Class B Notes and (ii)
____________% of the Outstanding Amount of the Class B Notes on such
Distribution Date (before giving effect to any reduction thereof on such
Distribution Date); provided, however, that the Class B Available Amount
shall be zero after any reduction by a Rating Agency of its rating of any
Class of Class A Notes to less than "A" or its equivalent, or any withdrawal
of such a rating by a Rating Agency, unless such rating has been restored.
"Class B Final Scheduled Distribution Date" means the ______________
Distribution Date.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Collateral Release Period" means the period from and including the
First Release Distribution Date to and including the Distribution Date on
which the aggregate amount of the cash and Principal Balances of Receivables
released from the lien of the Indenture pursuant to Sections 5.06(a)(ii)(D)
and 5.06(c) is equal to the Initial Overcollateralization Amount.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close
of business on such last day: (1) all applications of collections, and
(2) all distributions to be made on the following Distribution Date.
"Company" means Premier Receivables L.L.C., a Michigan limited liability
company, and any successor in interest or, if the Rights (as defined in the
Purchase Agreement) have been assigned to a Person that becomes a transferee
in accordance with Section 5.06 of the Purchase Agreement, such transferee
Person and any successor in interest.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at __________________________________; or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (of which address such successor Indenture
Trustee will notify the Noteholders and the Seller).
"Cutoff Date" means ______________, 199_.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
and assigned the related Receivable to CFC under an existing agreement
between such dealer and CFC.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and
are susceptible of physical delivery, transfer thereof to the Indenture
Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of,
the Indenture Trustee or its nominee or custodian or endorsed in blank
to a 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 are book-entry securities held through the
Federal Reserve System pursuant to Federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the UCC: book-
entry registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
securities; the identification by the Federal Reserve Bank of such book-
entry securities on its record being credited to the financial
intermediary's Participant's securities account; 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 being credited to the
Indenture Trustee's securities account or custodian's securities account
and indicating that such custodian holds such Trust Account Property
solely as agent for the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Distribution Date" means, with respect to each Collection Period, the
sixth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on ______________, 199_.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee or ____________________ so long as it
shall be Paying Agent under the Trust Agreement or (b) a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any domestic branch
of a foreign bank), which (i) has either (A) a long-term unsecured debt
rating of AAA or better by Standard & Poor's and A1 or better by Moody's or
(B) a certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or
better by Moody's, or any other long-term, short-term or certificate of
deposit rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC. If so qualified, the Indenture Trustee, the Owner
Trustee or _____________________ may be considered an Eligible Institution
for the purposes of clause (b) of this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws
of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
each of the Rating Agencies in the highest applicable rating category
granted thereby;
(c) commercial paper, variable amount notes or other short term
debt obligations having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies
in the highest applicable rating category granted thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable rating
category granted thereby (including funds for which the Indenture
Trustee or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (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 (there being no limit on the amount
of funds that may be invested in repurchase obligations in respect
of which such Standard & Poor's rating is A-1+ (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating being
that of the related Rated Holding Company));
(B) in the case of the Reserve Account, the rating from
Standard & Poor's in respect of the unsecured short-term debt
obligations of the financial institution, rated broker/dealer,
unrated broker/dealer or Guaranteed Counterparty (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating being
that of the related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Indenture Trustee or the Issuer, as
applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to
any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of the
Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Indenture Trustee or the Issuer, as applicable,
shall have received an opinion of counsel (which may be in-
house counsel) to the effect that the guarantee of the related
Rated Holding Company is a legal, valid and binding agreement
of the Rated Holding Company, enforceable in accordance with
its terms, subject as to enforceability to bankruptcy,
insolvency, reorganization and moratorium or other similar
laws affecting creditors' rights generally and to general
equitable principles;
(ii) the Indenture Trustee or the Issuer, as applicable,
shall have received (x) an incumbency certificate for the
signer of such guarantee, certified by an officer of such
Rated Holding Company and (y) a resolution, certified by an
officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the Rated
Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is necessary)
and that the Indenture Trustee or the Issuer shall make a
demand on the Rated Holding Company to make the payment due
under such guarantee;
(iv) the guarantee of the Rated Holding Company shall be
irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
(v) each of Standard & Poor's and Moody's has confirmed
in writing to the Indenture Trustee or Issuer, as applicable,
that it has reviewed the form of the guarantee of the Rated
Holding Company and has determined that the issuance of such
guarantee will not result in the downgrade or withdrawal of
the ratings assigned to the Notes.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide that,
upon any failure to maintain such overcollateralization, the
repurchase obligation shall become due and payable, and unless the
repurchase obligation is satisfied immediately, the collateral
subject to the repurchase agreement shall be liquidated and the
proceeds applied to satisfy the unsatisfied portion of the
repurchase obligation;
(h) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as an Eligible Investment will not
result in a withdrawal or downgrading of the ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the Distribution Date
immediately following the Final Scheduled Maturity 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 or Fixed Value Receivable.
"First Release Distribution Date" means the first Distribution Date on
which the Overcollateralization Amount is at least equal to the sum of (a)
the Initial Overcollateralization Amount and (b) the product of (i) _% and
(ii) the excess of the Related Pool Balance over the Initial
Overcollateralization Amount.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the case of a prepayment or repurchase,
by the amount of the unearned finance charges under the Contract allocable to
such payment in accordance with the Servicer's customary procedures and
(ii) in the case of a liquidation, by the excess of Liquidation Proceeds
collected by the Servicer over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that provides for amortization of
the loan over a series of fixed level payment monthly installments in
accordance with the actuarial method, the simple interest method or the Rule
of 78s, but also requires a final payment that is greater than the scheduled
monthly payments and is due after payment of such scheduled monthly payments
and that may be made by (i) payment in full in cash of a fixed value amount,
(ii) return of the Financed Vehicle to the Servicer provided certain
conditions are satisfied or (iii) refinancing the final fixed value payment
in accordance with certain conditions.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.04.
"Indenture" means the Indenture dated as of _______________, 199_,
between the Issuer and the Indenture Trustee (that provides for the issuance
of the Issuer's Asset Backed Notes, Series 199_-_).
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Overcollateralization Amount" means $________________.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or (b) the commencement by such Person of a voluntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors,
or the failure by such Person generally to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the
foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the Receivables in respect of the Collection Period preceding such
Distribution Date: (a) that portion of all collections on Receivables
allocable to interest, (b) Liquidation Proceeds with respect to the
Receivables to the extent allocable to interest due thereon in accordance
with the Servicer's customary servicing procedures, (c) the Purchase Amount
of each Receivable that became a Purchased Receivable during such Collection
Period to the extent attributable to accrued interest on such Receivable, (d)
Recoveries for such Collection Period, and (e) Investment Earnings for the
related Distribution Date; provided, however, that in calculating the
Interest Distribution Amount all payments and proceeds (including Liquidation
Proceeds) of any Purchased Receivables the Purchase Amount of which has been
included in the Interest Distribution Amount in a prior Collection Period
shall be excluded.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the 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 liquidated by the Servicer
through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
the moneys collected in respect thereof, from whatever source on a Liquidated
Receivable during the Collection Period in which such Receivable became a
Liquidated Receivable, net of the sum of any amounts expended by the Servicer
in connection with such liquidation and any amounts required by law to be
remitted to the Obligor on such Liquidated Receivable.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Note Amount" means, with respect to any Distribution Date, the
aggregate outstanding principal amount of the Notes after giving effect to
payments of principal made on the Notes on all preceding Distribution Dates.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will
decline to reflect reductions in the outstanding principal balance of such
Class of Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution
Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest that is actually deposited in
the Note Distribution Account on such preceding Distribution Date, plus
interest on the amount of interest due but not paid to Noteholders on the
preceding Distribution Date, to the extent permitted by law, at the
respective Interest Rates borne by each Class of the Notes for the related
Interest Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date. For all purposes of this Agreement and
the Basic Documents, interest with respect to all Classes of Notes other than
the Class A-1 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months; and interest with respect to the Class A-
1 Notes shall be computed on the basis of the actual number of days in each
applicable Interest Accrual Period divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued for the related Interest Accrual
Period 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 (less, on each Distribution Date in the Collateral
Release Period, the Cash Release Amount) plus (ii) the Accelerated Principal
Distribution Amount plus (iii) any accelerated payments of principal required
to be made from amounts on deposit in the Reserve Account pursuant to Section
5.07(b)(ii).
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually deposited in the Note Distribution Account on such
current Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and the Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided, however, that the Noteholders' Principal Distributable Amount
shall not exceed the outstanding principal balance of the Notes. In
addition, (a) on the Class A-1 Final Scheduled Distribution Date, the
principal required to be deposited in the Note Distribution Account will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-1
Notes to zero; (b) on the Class A-2 Final Scheduled Distribution Date, the
principal required to be deposited in the Note Distribution Account will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-2
Notes to zero; (c) on the Class A-3 Final Scheduled Distribution Date, the
principal required to be deposited in the Note Distribution Account will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-3
Notes to zero; (d) on the Class A-4 Final Scheduled Distribution Date, the
principal required to be deposited in the Note Distribution Account will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-4
Notes to zero; and (e) on the Class B 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 B Notes
to zero.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, any vice president, the controller or any assistant controller
and (b) the president, a treasurer, assistant treasurer, secretary or
assistant secretary of the Seller, the Company or the Servicer, as
appropriate.
"OMSC" means Overseas Military Sales Corporation, or its successor.
"OMSC Receivable" means any Standard Receivable acquired by CFC from
OMSC.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
or the Rating Agencies, as applicable.
"Original Pool Balance" means $_________________.
"Overcollateralization Amount" means, with respect to any Distribution
Date, the excess of (i) the Related Pool Balance over (ii) the Note Amount.
"Overcollateralization Percentage" means, with respect to any
Distribution Date, the percentage derived from the fraction, the numerator of
which is the Overcollateralization Amount for such Distribution Date and the
denominator of which is the Related Pool Balance.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under
the Trust Agreement.
"Payment Determination Date" means, with respect to any Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Liquidated Receivables).
"Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection Period, means the Amount Financed minus the sum of
(i) the portion of all payments made by or on behalf of the related Obligor
on or prior to such day and allocable to principal using the Simple Interest
Method and (ii) any payment of the Purchase Amount with respect to the
Receivable allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of
_______________, 199_, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable
under the terms thereof including interest to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a
Rating Agency pursuant to this Agreement shall also be given to Fitch
Investors Service, L.P. and Duff & Phelps Credit Rating Co., although, except
as set forth above, neither shall be deemed to be a Rating Agency for any
purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each of
the Rating Agencies shall have notified the Seller, the Company, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then current
rating of the Notes.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 3.03.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication,
with respect to the Receivables in respect of the Collection Period preceding
such Distribution Date: (a) that portion of all collections on Receivables
allocable to principal, (b) all Liquidation Proceeds attributable to the
principal amount of Receivables that became Liquidated Receivables during
such Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such
Liquidated Receivables, (c) to the extent attributable to principal, the
Purchase Amount of each Receivable that became a Purchased Receivable during
such Collection Period, (d) 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 Obligors thereon as of the date of the original
contract and only to the extent not included under clause (a) above, and
(e) 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 all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of
which has been included in the Principal Distribution Amount in a prior
Collection Period will be excluded
"Related Pool Balance" means, with respect to any Distribution Date, the
Pool Balance as of the beginning of the preceding Collection Period.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of cash and
Eligible Investments in the amount of $________________ made by the Seller
into the Reserve Account on the Closing Date.
"Seller" means CFC and its successors in interest to the extent
permitted hereunder.
"Servicer" means CFC, as the servicer of the Receivables, and each
successor to CFC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means ______% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means, with respect to any
Distribution Date, an amount equal to the Reserve Account Initial Deposit;
provided, however, that if, after the Collateral Release Period, the
Overcollateralization Percentage at any time equals at least ____%, then the
Specified Reserve Account Balance shall be $_______________.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or its successor.
"Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that is not a Fixed Value
Receivable.
"Targeted Overcollateralization Amount" means, with respect to a
Distribution Date, the amount equal to (a) the quotient derived from dividing
the Note Amount for such Distribution Date by _________ minus (b) such Note
Amount.
"Total Distribution Amount" means, for each Distribution Date, the sum
of the applicable Interest Distribution Amount and the applicable Regular
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses).
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and
all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of _______________, 199_, among the Seller, the Company and the Owner
Trustee (as supplemented by the Supplement thereto dated ___________, 199_-_
relating to Series 199_-_).
"Trust Officer" means, in the case of the Indenture Trustee, any Officer
within the Corporate Trust Office of the Indenture Trustee, including any
Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of $_________________,
less (i) the amount to be deposited to the Reserve Account on the Closing
Date and (ii) the Initial Overcollateralization Amount, and the Certificates,
the Seller does hereby sell, transfer, assign, set over and otherwise convey
to the Issuer, without recourse (subject to the obligations of the Seller set
forth herein), all right, title and interest of the Seller in and to:
(a) the Receivables and all moneys received thereon on and after
__________________;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the
Seller in the Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on
any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment
in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable and
shall have been acquired by or on behalf of the Seller, the Servicer,
the Company or the Trust;
(f) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts, including the Reserve Account
Initial Deposit, and in all investments and proceeds thereof (including
all income thereon); and
(g) the proceeds of any and all of the foregoing.
The Seller hereby directs the Issuer to issue the Certificates to the
Company. The Seller and the Issuer acknowledge that $________________ of the
purchase price of the Receivables owed by the Issuer to the Seller pursuant
to this Section 2.01 shall be offset by the Issuer against delivery of the
Class A-1 Notes to the Seller.
SECTION 2.02. (Reserved)
SECTION 2.03. Conveyance of Fixed Value Payments. Promptly following
the transfer to the Issuer of the Receivables on the Closing Date, the Issuer
shall, without further action hereunder, be deemed to sell, transfer, assign,
set over and otherwise convey to the Seller, effective as of the Closing
Date, without recourse, representation or warranty, all the right, title and
interest of the Issuer in and to the Fixed Value Payments, all monies due and
to become due and all amounts received with respect thereto and all proceeds
thereof, subject to Section 5.03(b).
SECTION 2.04. Fixed Value Securities. (a) At any time after the
Closing Date, at the option of the Seller and upon 10 days prior notice to
the Owner Trustee and the Indenture Trustee, the Seller will be permitted to
sell to the Issuer, and the Issuer shall be obligated to purchase from the
Seller (subject to the availability of funds), all or any portion of the
Fixed Value Payments, subject to the terms and conditions described below.
Upon any such sale, (x) the Seller and the Owner Trustee will enter into an
amendment to this Agreement and the Basic Documents to provide for, at the
election of the Seller, the issuance of certificates representing ownership
interests in the Trust to the extent of such Fixed Value Payments or the
issuance of indebtedness by the Issuer secured by such Fixed Value Payments
(collectively, the "Fixed Value Securities") and to make any other provisions
herein or therein that are necessary or desirable in connection therewith and
(y) the Owner Trustee will enter into any other agreements or instruments
related thereto as requested by the Seller; provided, however, that the
Owner Trustee may, but shall not be obligated to, enter into any such
amendment, agreement or instrument that affects the Owner Trustee's own
rights, duties or immunities under this Agreement; and provided, further,
that the obligation of the Issuer to purchase such Fixed Value Payments and
of the Owner Trustee to enter into any such amendment or other agreement or
instrument is subject to the following conditions precedent:
(i) such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or
agreements to be executed and delivered by the Indenture Trustee, in
forms satisfactory to the Indenture Trustee, shall have been executed by
each other party thereto and delivered to the Owner Trustee or the
Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel to
the effect that each condition precedent (including the requirement with
respect to all required filings) provided by this Section has been
complied with and such amendment or other agreement or instrument is
authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other agreement
or instrument shall not adversely affect in any material respect the
interest of any Noteholder or Certificateholder, and the Depositor shall
have provided to the Owner Trustee and the Indenture Trustee an
Officers' Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and issuance
will not have any material federal income or Michigan income or single
business 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).
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with Respect to
the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied
in acquiring the Receivables. Such representations and warranties speak as
of the execution and delivery of this Agreement and as of the Closing Date,
but shall survive the sale, transfer and assignment of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Characteristics of Receivables. Each Standard Receivable and
Fixed Value Receivable (A) was originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business, was fully and properly
executed by the parties thereto, was purchased by the Seller from such
Dealer under an existing dealer agreement, (B) has created or shall
create a valid, subsisting and enforceable first priority security
interest in favor of the Seller and is assignable by the Seller to the
Issuer and by the Issuer to the Indenture Trustee, (C) contains
customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the
collateral of the benefits of the security, and (D) provides for level
monthly payments (provided, that the payment in the first or last month
in the life of the Standard Receivable or Fixed Value Receivable may be
minimally different from the level payments and that the payment in the
last month of a Fixed Value Receivable may be a Fixed Value Payment)
that fully amortize the Amount Financed by maturity and yield interest
at the Annual Percentage Rate. The Obligor on each OMSC Receivable was
in the services of the United States of America military at the time
such OMSC Receivable was originated. No Receivable conveyed to the
Issuer on the Closing Date is an OMSC Receivable.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all material
respects as of the opening of business on the applicable Cutoff Date,
and no selection procedures believed to be adverse to the Noteholders or
were utilized in selecting the Receivables. The computer tape or other
listing regarding the Standard Receivables and the Fixed Value
Receivables made available to the Issuer and its assigns (which computer
tape or other listing is required to be delivered as specified herein)
is true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed Value
Receivable and the sale of the Financed Vehicle complied at the time it
was originated or made and, at the execution of this Agreement, complies
in all material respects with all requirements of applicable federal,
state and local laws and regulations thereunder (or, in the case of the
OMSC Receivables, Swiss laws and regulations and the laws and
regulations of the jurisdiction where the Receivable was originated),
including usury laws, the federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss
Warranty Act, the Federal Reserve Board's Regulations B and Z, the Texas
Consumer Credit Code and State adaptations of the National Consumer Act
and of the Uniform Consumer Credit Code, and other consumer credit laws
and equal credit opportunity and disclosure laws.
(d) Binding Obligation. Each Standard Receivable and Fixed Value
Receivable represents the genuine, legal, valid and binding payment
obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or
Fixed Value Receivables is due from the United States of America or any
State or from any agency, department or instrumentality of the United
States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to
the sale, assignment and transfer thereof, each Standard Receivable and
Fixed Value Receivable shall be secured by a validly perfected first
security interest in the Financed Vehicle in favor of the Seller as
secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of the Seller as secured
party.
(g) Receivables in Force. No Standard Receivable or Fixed Value
Receivable has been satisfied, subordinated or rescinded, nor has any
Financed Vehicle been released from the lien granted by the related
Standard Receivable or Fixed Value Receivable in whole or in part.
(h) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the Obligor's
scheduled payments has been increased except for increases resulting
from the inclusion of any premiums for forced placed physical damage
insurance covering the Financed Vehicle.
(i) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Standard
Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens or
claims have been filed for work, labor or materials relating to a
Financed Vehicle that are liens prior to, or equal to or coordinate
with, the security interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value Receivable
has a payment that is more than 30 days overdue as of the related Cutoff
Date, and, except as permitted in this paragraph, no default, breach,
violation or event permitting acceleration under the terms of any
Standard Receivable or Fixed Value Receivable has occurred; and no
continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration
under the terms of any Standard Receivable or Fixed Value Receivable has
arisen; and the Seller has not waived and shall not waive any of the
foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the Receivable,
the Obligor had obtained physical damage insurance covering the Financed
Vehicle and under the terms of the Standard Receivable and Fixed Value
Receivable the Obligor is required to maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Standard
Receivables and Fixed Value Receivables from the Seller to the Issuer
and that the beneficial interest in and title to the Standard
Receivables and Fixed Value Receivables not be part of the debtor's
estate in the event of the filing of a bankruptcy petition by or against
the Seller under any bankruptcy law. No Standard Receivable or Fixed
Value Receivable has been sold, transferred, assigned or pledged by the
Seller to any Person other than the Issuer. Immediately prior to the
transfer and assignment herein contemplated, the Seller had good and
marketable title to each Standard Receivable and Fixed Value Receivable
free and clear of all Liens, encumbrances, security interests and rights
of others and, immediately upon the transfer thereof, the Issuer shall
have good and marketable title to each Standard Receivable and Fixed
Value Receivable, free and clear of all Liens, encumbrances, security
interests and rights of others; and the transfer has been perfected
under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard 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 due date on or prior to the end
of the month following the related Cutoff Date and (B) no Standard
Receivable or Fixed Value Receivable has a payment that is more than
30 days overdue as of the related Cutoff Date, and has a final scheduled
payment date no later than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are kept
at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later than the
Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable and
Fixed Value Receivable has an outstanding principal balance of at least
$____.
(w) No Bankruptcies or First-Time Buyers. No Obligor on any
Standard Receivable or Fixed Value Receivable as of the related Cutoff
Date was noted in the related Receivable File as having filed for
bankruptcy, and no such Obligor financed a Financed Vehicle under the
Seller's "New Finance Buyer Plan" program.
(x) No Repossessions. No Financed Vehicle securing any Standard
Receivable or Fixed Value Receivable is in repossession status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations of the Seller in Section 6.01
are true and correct.
(aa) Financing. As of the Cutoff Date, approximately ________% of
the aggregate principal balance of the Receivables, constituting
________% of the number of Receivables, represents previously titled
vehicles; approximately _____% of the aggregate principal balance of the
Receivables represents financing of vehicles manufactured or distributed
by Chrysler Corporation; all of the Receivables are Simple Interest
Receivables; by aggregate principal balance, approximately _____% of the
Receivables are Fixed Value Receivables. The aggregate principal
balance of the Receivables, as of the Cutoff Date is
$_____________________. For the purposes of this subparagraph (aa),
Receivable shall mean only that portion of the Receivables with respect
to which the Trust has an ownership interest.
SECTION 3.02. Repurchase upon Breach. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the
last day of the second Collection Period following the discovery thereof by
the Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable materially and adversely affected by any such
breach as of such last day (or, at the Seller's option, the last day of the
first Collection Period following the discovery). In consideration of the
repurchase of any such Receivable, the Seller shall remit the Purchase
Amount, in the manner specified in Section 5.05. Subject to the provisions
of Section 6.03, the sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to
a breach of representations and warranties pursuant to Section 3.01 and the
agreement contained in this Section shall be to require the Seller to
repurchase Receivables pursuant to this Section, subject to the conditions
contained herein.
SECTION 3.03. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee
as custodian of the following documents or instruments which are hereby or
will hereby be constructively delivered to the Indenture Trustee, as pledgee
of the Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
(b) the original credit application fully executed by the Obligor;
(c) the original certificate of title or such documents that the
Servicer or the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle; and
(d) any and all other documents that the Servicer or the Seller
shall keep on file, in accordance with its customary procedures,
relating to a Standard Receivable or Fixed Value Receivable, an Obligor
or a Financed Vehicle.
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to
comply with this Agreement. In performing its duties as custodian the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable automotive receivables that the Servicer services
for itself or others. The Servicer shall conduct, or cause to be conducted,
periodic audits of the Receivable Files held by it under this Agreement and
of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer or the Indenture Trustee to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the
Issuer and the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided and shall promptly take appropriate action to remedy any such
failure. Nothing herein shall be deemed to require an initial review or any
periodic review by the Issuer or the Indenture Trustee of the Receivable
Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a
list of locations of the Receivable Files and the related accounts, records
and computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture Trustee,
the Servicer shall release any Receivable File to the Indenture Trustee, the
Indenture Trustee's agent or the Indenture Trustee's designee, as the case
may be, at such place or places as the Indenture Trustee may designate, as
soon as practicable.
SECTION 3.05. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and
each of their respective officers, directors, employees and agents for any
and all liabilities, obligations, losses, compensatory damages, payments,
costs or expenses of any kind whatsoever that may be imposed on, incurred by
or asserted against the Trust, the Owner Trustee or the Indenture Trustee or
any of their respective officers, directors, employees and agents as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer as custodian of the Receivable Files; provided,
however, that the Servicer shall not be liable to the Owner Trustee for any
portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Owner Trustee, and the Servicer shall not be liable to
the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section. If CFC shall resign as Servicer in accordance with the provisions
of this Agreement or if all of the rights and obligations of any Servicer
shall have been terminated under Section 8.01, the appointment of such
Servicer as custodian shall be terminated by the Indenture Trustee or by the
Holders of Notes evidencing not less than 25% of the Outstanding Amount of
the Notes or, with the consent of Holders of the Notes evidencing not less
than 25% of the Outstanding Amount of the Notes, by the Owner Trustee, in the
same manner as the Indenture Trustee or such Holders may terminate the rights
and obligations of the Servicer under Section 8.01. The Indenture Trustee
or, with the consent of the Indenture Trustee, the Owner Trustee may
terminate the Servicer's appointment as custodian, with cause, at any time
upon written notification to the Servicer and, without cause, upon 30 days'
prior written notification to the Servicer. As soon as practicable after any
termination of such appointment, the Servicer shall deliver the Receivable
Files to the Indenture Trustee or the Indenture Trustee's agent at such place
or places as the Indenture Trustee may reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it
services for itself or others. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors
on such Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors, accounting for collections
and furnishing monthly and annual statements to the Owner Trustee and the
Indenture Trustee with respect to distributions. Subject to the provisions
of Section 4.02, the Servicer shall follow its customary standards, policies
and procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Issuer (in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner
Trustee shall upon the written request of the Servicer furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows
with respect to all comparable automotive receivables that it services for
itself or others. The Servicer may grant extensions, rebates or adjustments
on a Standard Receivable or Fixed Value Receivable, which shall not, for the
purposes of this Agreement, modify the original due dates or amounts of the
originally scheduled payments of interest on such Receivable; provided,
however, that if the Servicer extends the date for final payment by the
Obligor of any Receivable beyond the Final Scheduled Maturity Date, it shall
promptly repurchase the 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 or the originally scheduled payments on any Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject
to the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
in its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle
as of the execution of the Standard Receivable or 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. 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, and
other administrative fees or similar charges allowed by applicable law with
respect to the Receivables, collected (from whatever source) on the
Receivables, plus any reimbursement pursuant to the last paragraph of
Section 7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 A.M. (New
York time) on each Payment Determination Date, the Servicer shall deliver to
the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Sections 5.06 and 5.07 for the related
Collection Period. Receivables to be purchased by the Servicer or to be
repurchased by the Seller shall be identified by the Servicer by account
number with respect to such Receivable (as specified in Schedule A).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, on or before April 30 of each year beginning ______________, 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 longer period as shall have elapsed since
the Closing Date) and of its performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of such certificate and the report
referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder, Noteholder or Note Owner by a request in writing to the
Owner Trustee addressed to the Corporate Trust Office. Upon the telephone
request of the Owner Trustee, the Indenture Trustee will promptly furnish the
Owner Trustee a list of Noteholders as of the date specified by the Owner
Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving
of notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(a) or (b).
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before April 30 of each year beginning April 30, 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
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in such Program are applicable to the servicing obligations set
forth in this Agreement; and (c) except as described in the report, disclosed
no exceptions or errors in the records relating to automobile and light-duty
truck loans serviced for others that, in the firm's opinion, paragraph four
of such Program requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the
Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section.
SECTION 4.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders
for the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by
virtue of the appointment of such subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering the Receivables. The fees and expenses of the subservicer
shall be as agreed between the Servicer and its subservicer from time to
time, and none of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts. (a) (i) The Servicer,
for the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Note Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively the "Trust Accounts") shall be
invested (1) by the Indenture Trustee in Eligible Investments selected in
writing by the Servicer or an investment manager selected by the Servicer,
which investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds or (2) by an investment
manager in Eligible Investments selected by such investment manager; provided
that (A) such investment manager shall be selected by the Servicer, (B) such
investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds, (C) any investment so
selected by such investment manager shall be made in the name of the
Indenture Trustee and shall be settled by a Delivery to the Indenture Trustee
that complies with the terms of this Agreement as it relates to investing
such funds, and (D) prior to the settlement of any investment so selected by
such investment manager the Indenture Trustee shall affirm that such
investment is an Eligible Investment. The Servicer initially appoints the
Indenture Trustee investment manager hereunder, which the Indenture Trustee
hereby accepts. It is understood and agreed that the Indenture Trustee shall
not be liable for any loss arising from an investment in Eligible Investments
made in accordance with this Section 5.01(b). All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders and
the Certificateholders 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 in the Trust Accounts
shall be deposited into the Collection Account and shall be deemed to
constitute a portion of the Interest Distribution Amount for the related
Distribution Date. Other than as permitted by the Rating Agencies, funds on
deposit in the Collection Account, the Reserve Account and the Note
Distribution Account shall be invested in Eligible Investments that will
mature (A) not later than the Business Day immediately preceding the next
Distribution Date or (B) on such next Distribution Date if either (x) such
investment is held in the corporate trust department of the institution with
which the Collection Account, the Reserve Account, the Note Distribution
Account or the Certificate Distribution Account, as applicable, is then
maintained and is invested either in a time deposit of the Indenture Trustee
rated at least A-1 by Standard & Poor's and P-1 by Moody's (such account
being maintained within the corporate trust department of the Indenture
Trustee) or in the Indenture Trustee's common trust fund so long as such fund
is rated in the highest applicable rating category by Standard & Poor's and
Moody's or (y) the Indenture Trustee (so long as the short-term unsecured
debt obligations of the Indenture Trustee are either (i) rated at least P-1
by Moody's and A-1 by Standard & Poor's on the date such investment is made
or (ii) guaranteed by an entity whose short-term unsecured debt obligations
are rated at least P-1 by Moody's and A-1 by Standard & Poor's on the date
such investment is made) has agreed to advance funds on such Distribution
Date 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.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 or the
Noteholders and the Certificateholders, as the case may be. If, at any
time, any of the Trust Accounts ceases to be an Eligible Deposit
Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a
new Trust Account as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts,
subject to the last sentence of Section 5.01(c)(i); and each such
Eligible Deposit Account shall be subject to the exclusive custody
and control of the Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Indenture
Trustee or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for the Indenture
Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-
entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed by
clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture
Trustee's (or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make withdrawals
and payments from the Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
SECTION 5.02. Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or
on behalf of the Obligors with respect to the Receivables (other than
Purchased Receivables and not including Fixed Value Payments) and all
Liquidation Proceeds, both as collected during the Collection Period.
Notwithstanding the foregoing, for so long as (i) CFC remains the Servicer,
(ii) no Servicer Default shall have occurred and be continuing and
(iii)(x) CFC maintains a short-term rating of at least A-1 by Standard &
Poor's and P-1 by Moody's (and for five Business Days following a reduction
in either such rating) or (y) prior to ceasing daily remittances, the Rating
Agency Condition shall have been satisfied (and any conditions or limitations
imposed by the Rating Agencies in connection therewith are complied with),
the Servicer shall remit such collections with respect to the preceding
calendar month to the Collection Account on the Payment Determination Date
immediately preceding the related Distribution Date. For purposes of this
Article V the phrase "payments by or on behalf of Obligors" shall mean
payments made with respect to the Receivables by Persons other than the
Servicer or the Seller.
SECTION 5.03. Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied,
to interest and principal in accordance with the Simple Interest Method.
(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. (Reserved)
SECTION 5.05. Additional Deposits. The Servicer and the Seller shall
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables
when such obligations are due, unless the Servicer shall not be required to
make daily deposits pursuant to Section 5.02. All such other deposits shall
be made on the Payment Determination Date for the related Collection Period.
SECTION 5.06. Distributions.
(a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be 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 Servicer, from the Interest Distribution Amount,
the Servicing Fee (and all unpaid Servicing Fees from prior
Collection Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (A),
the Noteholders' Interest Distributable Amount;
(C) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (A)
and (B), the Noteholders' Principal Distributable Amount;
(D) if all of the conditions set forth in Section 5.06(b) are
satisfied, to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (A)
through (C), the Cash Release Amount for such Distribution Date;
(E) to the Reserve Account, from the Total Distribution
Amount remaining after the application of clauses (A) through (D)
(it being understood that the Accelerated Principal Distribution
Amount is a function of and subject to the amount required to be
deposited in the Reserve Account pursuant to this clause (E)), the
amount, if any, necessary to reinstate the balance in the Reserve
Account up to the Specified Reserve Account Balance; and
(F) to the Certificate Distribution Account, the portion, if
any, of the Total Distribution Amount remaining after the
application of clauses (A) through (E).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the Pool
Balance is reduced to zero.
(b) The distribution of a Cash Release Amount pursuant to Section
5.06(a)(ii)(D) and the release of Receivables from the lien of the Indenture
pursuant to Section 5.06(c) on a Distribution Date shall be subject to the
satisfaction of all of the following conditions:
(i) no such distribution or release shall be made until the First
Release Date;
(ii) subject to condition (iii) below, the aggregate Principal
Balance of Receivables released in respect of such Distribution Date
shall equal (x) the Overcollateralization Amount for such Distribution
Date less (y) the Targeted Overcollateralization Amount;
(iii) the aggregate amount of Cash Release Amounts distributed
pursuant to Section 5.06(a)(ii)(D) and the aggregate Principal Balance
of Receivables released pursuant to Section 5.06(c) shall not exceed the
Initial Overcollateralization Amount; and
(iv) the entire amount of the Noteholders' Principal Distribution
Amount for such Distribution Date is distributed pursuant to Section
5.06(a)(ii)(c).
(c) If on any Distribution Date all of the conditions in Section
5.06(b) will be satisfied, then on the related Payment Determination Date the
Servicer shall notify the Owner Trustee of such fact and instruct the
Indenture Trustee to release from the lien of the Indenture and transfer to
the Trust, free and clear of the lien of the Indenture, Receivables having
the aggregate Principal Balance specified in Section 5.06(b)(ii). The
Servicer shall randomly select the Receivables to be released.
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.
(b) (i) After giving effect to clause (ii) below, if the amount
on deposit in the Reserve Account on any Distribution Date (after giving
effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance
for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Seller.
(ii) On each Distribution Date subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any Class of Class A
Notes, unless such rating has been restored, if the amount on deposit in
the Reserve Account (after taking into account any deposits thereto
pursuant to Section 5.06(a) and withdrawals therefrom pursuant to
Section 5.07(c) or (d) on such date) is greater than the Specified
Reserve Account Balance for such Distribution Date, then the Servicer
shall instruct the Indenture Trustee to include the amount of such
excess in the Noteholders' Monthly Principal Distribution Amount and to
deposit the amount of such excess 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) (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(a)(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, and deposit such amount into the Note Distribution Account;
provided that such amount shall be applied first to the payment of
interest due on the Class A Notes to the extent, if any, that the amount
deposited pursuant to Section 5.06(a)(ii)(B) is not sufficient to cover
such payment of interest, second, to the extent of the Class B Available
Amount, to the payment of interest due on the Class B Notes (to the
extent, if any, the amount deposited pursuant to Section 5.06(a)(ii)(B)
is not sufficient to cover such payment of interest) and third to the
payment of principal of the Notes but only to the extent of the amount
remaining in the Reserve Account less the Class B Available Amount
(calculated after giving effect to the amount applied pursuant to clause
second on such Distribution Date).
(ii) In the event that the Noteholders' Principal
Distributable Amount on the Class A-1 Final Scheduled Distribution Date,
the Class A-2 Final Scheduled Distribution Date, the Class A-3 Final
Scheduled Distribution Date, the Class A-4 Final Scheduled Distribution
Date or the Class B Final Scheduled Distribution Date exceeds the amount
deposited into the Note Distribution Account pursuant to Section
5.06(a)(ii)(C) on such Distribution Date, the Servicer shall instruct
the Indenture Trustee to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of funds
available therein, and deposit such amount into the Note Distribution
Account.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06(a) following payment in full of the Outstanding
Amount of the Notes until the Pool Balance is reduced to zero. Following the
payment in full of the aggregate Outstanding Amount of the Notes and of all
other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders and the termination of the Trust, any
amount remaining on deposit in the Reserve Account shall be distributed to
the Seller.
SECTION 5.08. (Reserved)
SECTION 5.09. Statements to Noteholders and Certificateholders. On
each Distribution Date, the Servicer shall provide to the Owner Trustee (with
a copy to the Rating Agencies and each Paying Agent) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date
and to the Indenture Trustee (with a copy to each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date a statement substantially in the form of Exhibit B,
setting forth at least the following information as to the Notes, to the
extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes;
(iii) the outstanding principal balance of each Class of Notes
and the Note Pool Factor for each such Class as of the close of business
on the last day of the preceding Collection Period, after giving effect
to payments allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(v) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(vi) the balance of the Reserve Account on such Payment
Determination Date after giving effect to deposits and withdrawals to be
made on the next following Distribution Date, if any;
(vii) the Pool Balance as of the close of business on the last
day of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above; and
(viii) the amount, if any, distributed to the Certificate
Distribution Account.
Each amount set forth on the Distribution Date statement under clauses
(i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note.
SECTION 5.10. Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for or with respect to the Collection Period net of distributions to
be made to the Servicer with respect to the Collection Period. The Servicer,
however, will account to the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.11. Transfer of Certificates. In the event any Holder of a
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 Certificates and the Receivables and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act of 1933, as amended,
pursuant to the exemption from registration provided by Rule 144A.
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized
and validly existing as a corporation in good standing under the laws of
the State of Michigan, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the corporate power, authority and legal right to
acquire and own the Standard Receivables and Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Seller has the corporate power and
authority to execute and deliver this Agreement and 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 duly
authorized by the Seller by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Seller enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of 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 this
Agreement and the Basic Documents); or violate any law or, to the best
of the Seller's knowledge, any order, rule or regulation applicable to
the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement, the
Indenture or any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents,
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under,
or the validity or enforceability of, this Agreement, the Indenture, any
of the other Basic Documents, the Notes or the Certificates or (iv)
which might adversely affect the federal or state income tax attributes
of the Notes or the Certificates.
SECTION 6.02. 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 federal or
other income taxes arising out of distributions on the Certificates or
the Notes) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's or the Issuer's violation of federal or
state securities laws in connection with the offering and sale of the
Notes and the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be due
to the willful misfeasance, bad faith or negligence (except for errors
in judgment) of the Owner Trustee or, in the case of the Indenture
Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee, shall arise from the breach by
the Owner Trustee of any of its representations or warranties set forth
in Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of Obligations
of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which person in any of the
foregoing cases executes an agreement of assumption to perform every
obligation of the Seller under this Agreement, shall be the successor to the
Seller hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, however, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 shall have been breached and no
Servicer Default, and no event that, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing,
(ii) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction and (iv) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and Indenture Trustee, respectively, in the Receivables and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 6.05. Limitation on Liability of Seller and Others. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 6.06. Seller May Own Notes. The Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or
pledgee of Notes with the same rights as it would have if it were not the
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. The Seller shall not own any Certificates unless the Rating
Agency Condition is satisfied.
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under
the laws of the state of its incorporation, with the corporate power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted,
and had at all relevant times, and has, the corporate power, authority
and legal right to acquire, own, sell and service the Standard
Receivables and the Fixed Value Receivables and to hold the Receivable
Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Standard Receivables and the Fixed Value
Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement
have been duly authorized by the Servicer by all necessary corporate
action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with
its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Servicer,
or any indenture, agreement or other instrument to which the Servicer is
a party or by which it is bound; or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than this Agreement); or
violate any law or, to the best of the Servicer's knowledge, any order,
rule or regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
its properties.
(f) No Proceedings. To the Servicer's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, any of
the other Basic Documents, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) relating to the
Servicer and which might adversely affect the federal or state income
tax attributes of the Notes or the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable is shown on
the Receivable Files as the subject of a bankruptcy proceeding.
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders, the Company and the Seller and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate thereof of
a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Company, the Certificateholders and the Noteholders and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that
such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of CFC (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the
Indenture Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of Obligations
of, Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Chrysler
Corporation, which Person executed an agreement of assumption to perform
every obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction, (iv) immediately after
giving effect to such transaction, the successor to the Servicer shall become
the Administrator under the Administration Agreement in accordance with
Section 8 of such Agreement and (v) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that,
in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) no such action shall be necessary
to preserve and protect such interests. Notwithstanding anything herein to
the contrary, the execution of the foregoing agreement of assumption and
compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clause (a),
(b) or (c) above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the Basic Documents and the rights and duties of the parties to this
Agreement and the Basic Documents and the interests of the Certificateholders
under this Agreement and the Noteholders under the Indenture.
SECTION 7.05. CFC Not To Resign as Servicer. Subject to the provisions
of Section 7.03, CFC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law and cannot be cured. Notice of any such
determination permitting the resignation of CFC shall be communicated to the
Owner Trustee and the Indenture Trustee at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing
at the earliest practicable time) and any such determination shall be
evidenced by an Opinion of Counsel to such effect delivered to the Owner
Trustee and the Indenture Trustee concurrently with or promptly after such
notice. No such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall (i) have assumed the responsibilities
and obligations of CFC in accordance with Section 8.02 and (ii) have become
the Administrator under the Administration Agreement in accordance with
Section 8 of such Agreement.
ARTICLE VIII
Default
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 Percentage Interests
(as defined in the Trust Agreement) aggregating at least 25%;or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by
notice then given in writing to the Servicer (and to the Indenture Trustee
and the Owner Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Servicer under this Agreement. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Notes, the Certificates or
the Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to any
Receivable. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Receivable Files to the
successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses.
Upon receipt of notice of the occurrence of a Servicer Default, the Owner
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (i) the date 45 days from the delivery to the Owner
Trustee and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, the Indenture Trustee shall appoint a successor Servicer, and the
successor Servicer shall accept its appointment (including its appointment as
Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer and
the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution, having a net worth of
not less than $100,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to the Servicer under
this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
SECTION 8.03. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant
to this Article VIII, the Owner Trustee shall give prompt written notice
thereof to Certificateholders, and the Indenture Trustee shall give prompt
written notice thereof to Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or the
Holders (as defined in the Trust Agreement) of Certificates evidencing not
less than a majority of the Percentage Interests (as defined in the Trust
Agreement) 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 the Certificate
Distribution Account or accordance with this Agreement. Upon any such waiver
of a past default, such default shall cease to exist, and any Servicer
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto.
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the
last day of any Collection Period immediately preceding a Distribution Date
as of which the then outstanding Pool Balance is 10% or less of the Original
Pool Balance and the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes
have been paid in full, the Servicer shall have the option to purchase the
Owner Trust Estate, other than the 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 all
accrued but unpaid interest (including any overdue interest and premium)
thereon.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
other than Section 5.07(b) and the Owner Trustee will succeed to the rights
of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, adversely affect in
any material respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of outstanding Certificates evidencing not less than a
majority of the Percentage Interests (as defined in the Trust Agreement), 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
Percentage Interests (as defined in the Trust Agreement), 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 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.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment hereto, an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner Trustee and the
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 90-day period, stating that, in the opinion of such counsel, either
(A) all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 10.03. Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in
the case of the Seller or the Servicer, to Chrysler Financial Corporation,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Assistant
Secretary ((810) 948-3067), (b) in the case of the Issuer or the Owner
Trustee, at the Corporate Trust Office (as defined in the Trust Agreement),
(c) in the case of the Indenture Trustee, at the Corporate Trust Office,
(d) in the case of Moody's, to Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007, (e) in the
case of Standard & Poor's, to Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., 25 Broadway (15th Floor), New York, New
York 10004, Attention of Asset Backed Surveillance Department, (f) in the
case of Fitch Investors Service, L.P., to One State Street Plaza, New York,
N.Y. 10004, and (g) in the case of Duff & Phelps Credit Rating Co., to 17
State Street, 12th Floor, New York, New York 10004; or, as to each of the
foregoing, at such other address as shall be designated by written notice to
the other parties.
SECTION 10.04. Assignment by the Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in the remainder of this Section, as provided in Sections 6.04 and 7.03
herein and as provided in the provisions of this Agreement concerning the
resignation of the Servicer, this Agreement may not be assigned by the Seller
or the Servicer. The Issuer and the Servicer hereby acknowledge and consent
to the conveyance and assignment (i) by the Seller to the Company pursuant to
the Purchase Agreement and (ii) by the Company to a limited liability company
or other Person (provided that conveyance and assignment is made in
accordance with Section 5.06 of the Purchase Agreement), of any and all of
the Seller's rights and interests (and corresponding obligations, if any)
hereunder with respect to receiving amounts from the Reserve Account and with
respect to receiving and conveying any Fixed Value Payments, and the Issuer
and the Servicer hereby agree that the Company, and any such assignee of the
Company, shall be entitled to enforce such rights and interests directly
against the Issuer as if the Company, or such assignee of the Company, were
itself a party to this Agreement.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10. Assignment by Issuer. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of the Issuer
in, to and under the Receivables and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer or the Company, acquiesce, petition or
otherwise invoke or cause the Issuer or the Company (or any assignee of the
Company pursuant to Section 10.04) to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Company (or any assignee of the Company pursuant to
Section 10.04) under any federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Company (or any
assignee of the Company pursuant to Section 10.04) or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer or the Company (or any assignee of the Company pursuant to Section
10.04).
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Seller.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by ____________________ not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall _________________________ in its individual capacity
or, except as expressly provided in the Trust Agreement, as beneficial owner
of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or obligations of
the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by _____________________, not in its individual
capacity but solely as Indenture Trustee and in no event shall
___________________________ have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the
assets of the Issuer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
PREMIER AUTO TRUST 199_-_
By: ___________________________, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust
By:___________________________________
Name:
Title:
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
By: ___________________________
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
___________________________________,
not in its individual capacity
but solely as Indenture Trustee
By: _______________________________
Name:
Title:
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee and Indenture Trustee at Closing
SCHEDULE B
Location of Receivable Files
Chrysler Financial Corporation
27777 Franklin Road
Southfield, MI 48034-8288
EXHIBIT A
(Reserved)
EXHIBIT B
Form of Distribution Statement to Noteholders
Chrysler Financial 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 $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class B Notes: ($ per $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class B Notes: ($ per $1,000 original principal amount)
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class B Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
EXHIBIT C
Form of Servicer's Certificate
Chrysler Financial 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
Original Pool Balance
Principal Distribution Amount
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
- ------------------------------------------------------------------------------
Collections - Simple Interest Contracts
+ Investment Earnings
Total Distribution Amount
- ------------------------------------------------------------------------------
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount:
Loss & Delinquency
Account Activity
--------------------------------------------------
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing Shortfall
Initial Pool
Principal Paydown
Reserve
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Class B
Overcollateralization
Overcollateralization Percentage
Principal Allocation
----------------------------------------------------------
Mandatory
Regular Accelerated Redemption/ Total Principal
Principal Principal Repayment Principal Shortfall
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Class B
Total
Miscellaneous
- -------------------------------------------------------------------------
Amounts released to the Certificate Distribution Account
Cash Release Amount
Receivables to be released
Specified Reserve Account Balance
Distribution Amount to Seller
Servicing Fee to Servicer
Allocation of Funds
- -------------------------------------------------------------------------
Sources
- -------
Principal Distribution Amount
Interest Distribution Amount
Redemption/Prepay Amount
Total Sources
Exhibit 99.3
This PURCHASE AGREEMENT dated as of _____________, 199_, between
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the "Seller"), and
__________________, a ____________ company (the "Company").
W I T N E S S E T H :
--------------------
WHEREAS the Seller and the Company have entered into an Amended and
Restated Trust Agreement dated as of _____________, 199_, among the Seller,
the Company and ___________________________, as owner trustee (as amended and
supplemented from time to time, the "Trust Agreement"), pursuant to which the
Company has agreed to assume certain obligations with respect to Premier Auto
Trust 199_-_ a Delaware business trust (the "Issuer"); and
WHEREAS the Company has agreed to acquire all of the Asset Backed
Certificates (the "Certificates"), which represent undivided percentage
interests in the assets of the Issuer;
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows.
ARTICLE I
Definitions
----------
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Sale and Servicing Agreement dated as
of _____________, 199_ (the "Sale and Servicing Agreement"), between the
Issuer and Chrysler Financial Corporation, as seller and as servicer, which
also contains rules as to usage and construction that shall be applicable
herein.
ARTICLE II
Conveyance of Rights to Excess Cash Flow from Reserve
-----------------------------------------------------
Account and Fixed Value Payments with respect to Receivables
------------------------------------------------------------
SECTION 2.01. Conveyance of Rights. In consideration of the
----------------------
Company's delivery to or upon the order of the Seller of approximately
$____________________ on the Closing Date, (i) the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Company, without
recourse (subject to the obligations herein), all of the Seller's right,
title and interest in and to the following: (a) any amounts (including
without limitation any Eligible Investment Receivables) to be released from
the Reserve Account from time to time to the Seller pursuant to the Sale
and Servicing Agreement, (b) any Fixed Value Payments arising in
connection with the Fixed Value Receivables and transferred by the Trust
to the Seller pursuant to Section 2.03 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") and
(ii) the Seller shall cause the Certificates to be issued to the Company.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of the Company. The
-----------------------------------------------
Company hereby represents and warrants to the Seller as of the date hereof
and as of the Closing Date:
(a) Organization and Good Standing. The Company has been duly
---------------------------------
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Michigan, with the power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted, and
had at all relevant times, and has, the power, authority and legal right
to acquire, own, hold and convey the Rights.
(b) Due Qualification. The Company is duly qualified to do business as
-----------------
a foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of its property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Company has the power and authority to
-------------------
execute and deliver this Agreement and to carry out its terms, and the
execution, delivery and performance of this Agreement have been duly
authorized by the Company by all necessary action.
(d) No Violation. The consummation of the transactions contemplated by
-------------
this Agreement and the fulfillment of the terms hereof will not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
organization or operating agreement of the Company, or any indenture,
agreement or other instrument to which the Company is a party or by which it
is bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than the Basic Documents); nor violate any law or, to
the best of the Company's knowledge, any order, rule or regulation applicable
to the Company of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties.
(e) No Proceedings. There are no proceedings or investigations pending
------------
or, to the Company's best knowledge, threatened, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 3.02. Representations and Warranties of the Seller. The
-----------------------------------------------
Seller hereby represents and warrants to the Company as of the date hereof
and as of the Closing Date and any Transfer Date:
(a) Organization and Good Standing. The Seller has been duly organized
------------------------------
and is validly existing as a 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 will not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of 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 any such indenture, agreement or
other instrument (other than the Basic Documents); nor violate any law or,
to the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(e) No Proceedings. To the Seller's best knowledge, there are no
---------------
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(i) asserting the invalidity of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement.
ARTICLE IV
Conditions
----------
SECTION 4.01. Conditions to Obligation of the Company. The
----------------------------------------------
obligation of the Company to purchase the Rights and the Certificates
is subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
--------------------------------------
warranties of the Seller hereunder shall be true and correct as of the date
of execution of this Agreement and as of the Closing Date with the same
effect as if then made, and the Seller shall have performed all obligations
to be performed by it hereunder on or prior to the Closing Date.
(b) Other Transactions. The transactions contemplated by the Sale and
------------------
Servicing Agreement to be consummated as of the Closing Date shall be
consummated as of such date.
SECTION 4.02. Conditions to Obligation of the Seller. The
---------------------------------------------
obligation of the Seller to sell the Rights to the Company and cause the
Certificates to be issued to the Company is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
--------------------------------------
warranties of the Company hereunder shall be true and correct as of
the date of execution of this Agreement and as of the Closing Date with
the same effect as if then made, and the Company shall have performed all
obligations to be performed by it hereunder on or prior to the Closing Date.
(b) Purchase Price. On the Closing Date, the Company shall have
---------------
delivered to the Seller the purchase price specified in Section 2.01.
ARTICLE V
Covenants
---------
SECTION 5.01. Legal Existence. (a) During the term of this
----------------
Agreement and the Trust Agreement, the Company will keep in full
force and effect its existence, rights and franchises as a limited
liability company under the laws of the jurisdiction of its organization
and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic
Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement, the Basic
Documents and the transactions contemplated hereby and thereby.
(b) During the term of this Agreement and the Trust Agreement, the
Company shall observe the applicable legal requirements for the recognition
of the Company as a legal entity separate and apart from its Affiliates,
including as follows:
(i) the Company shall maintain records and books of account
separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the
Companyshall notcommingle itsassets andfunds withthose ofits Affiliates;
(iii) the Company shall hold such appropriate meetings of its
members as are necessary to authorize all of the Company's actions
required by law to be authorized by the members thereof, shall keep
minutes of such meetings and observe all other customary formalities
respecting limited liability companies (and any successor Company that
is not a limited liability company shall observe similar procedures in
accordance with its governing documents and applicable law);
(iv) the Company shall at all times hold itself out to the
public under the Company's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between the Company and its
Affiliates, including this Agreement, will be conducted on an
arm's-length basis.
SECTION 5.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------------
Obligations of, the Company.
- ---------------------------
Any Person (a) into which the Company may be merged or consolidated, (b)
which may result from any merger or consolidation to which the Company shall
be a party or (c) which may succeed to the properties and assets of the
Company substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the
Company under this Agreement and the Trust Agreement, shall be the successor
to the Company hereunder and thereunder without the execution or filing of
any document or any further act by any of the parties to this Agreement or
the Trust Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.01 shall have been breached, (ii) the Company shall have delivered
to the Owner Trustee and the Indenture Trustee an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent, if any, provided for in this Agreement relating to
such transaction have been complied with and (iii) the Rating Agency
Condition shall have been satisfied with respect to such transaction.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii) and
(iii) above shall be conditions to the consummation of the transactions
referred to in clause (a), (b) or (c) above.
SECTION 5.03. Limitation on Liability of the Company and Others.
-----------------------------------------------------
The Company and any director, officer, employee or agent of a member of the
Company may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Company shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Agreement or under
the Trust Agreement, and that in its opinion may involve it in any expense
or liability.
SECTION 5.04. The Company May Own Notes. The Company may in its
---------------------------
individual or any other capacity become the owner or pledgee of Notes with
the same rights as it would have if it were not the Company, except as
expressly provided herein or in any Basic Document.
SECTION 5.05. Covenants of the Seller. (a) The Seller hereby agrees
-----------------------
to provide to the Company copies of each notice and certificate the
Seller receives pursuant to the Sale and Servicing Agreement insofar
as such notice or certificate relates to the Rights (including each
Servicer's Certificate delivered for each Distribution Date pursuant
thereto). In addition, the Seller hereby agrees to sell any vehicle that
is received by the Company at any time in satisfaction of a Fixed Value
Payment on behalf and for the benefit of the Company.
(b) The Seller hereby agrees that it will not, without the prior
written consent of the Company, enter into any amendment to the Sale and
Servicing Agreement or the Trust Agreement.
(c) The Seller shall not, prior to the date which is one year and one
day after the termination of the Sale and Servicing Agreement, acquiesce,
petition or otherwise invoke or cause the Company to invoke the process of
any court or government authority for the purpose of commencing or sustaining
a case against the Company under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Company or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Company.
SECTION 5.06. Sale of the Rights by the Company. After the Closing
----------------------------------
Date, the Company may sell, transfer and assign the Rights to another
Person (a "Transferee"); provided, that the Indenture Trustee and the
Owner Trustee shall have received an Opinion of Counsel to the effect that
such transfer will not cause the Trust to be characterized as an
association (or a publicly traded partnership) taxable as a corporation for
federal income tax purposes or Michigan income and single business tax
purposes. Notwithstanding anything herein to the contrary, compliance
with the proviso of the preceding sentence shall be a condition to the
consummation of the transaction referred to above.
ARTICLE VI
Miscellaneous
-------------
SECTION 6.01. Amendment. This Agreement may be amended from time to
---------
time by a written amendment duly executed and delivered by the Seller
and the Company, with the consent of the Indenture Trustee, but without
the consent of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Seller or the Company; provided, however, that
such amendment will not, as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee, materially and adversely affect
the interest of any Noteholder or Certificateholder. This Agreement
may also be amended by the Seller and the Company with the consent of the
Indenture Trustee, the consent of the Holders of Notes evidencing at least
a majority of the Outstanding Amount of the Notes and the consent of the
Holders (as defined in the Trust Agreement) of Certificates evidencing at
least a majority of all the percentage interests evidenced by the
Certificates, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Seller or the Company;
provided, however, that no such amendment shall (i) increase or reduce in
any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to
be made for the benefit of Noteholders or Certificateholders or (ii)
reduce the aforesaid percentage of the Outstanding Amount of the Notes or
of the percentage interests evidenced by the Certificates 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 Assistant Secretary ((810) 948-3067) and (b) in the
case of the Company, to _________________, 27777 Franklin Road, Southfield,
Michigan 48034, Attention of Assistant Secretary ((810) 948-3067); 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
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this Agreement are solely for the benefit of the Seller, the Company,
the Servicer, the Issuer, the Owner Trustee, the
Certificateholders, the Indenture Trustee and the Noteholders, and nothing
in this Agreement, whether express or implied, shall be construed to give
to any other Person any legal or equitable right, remedy or claim under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 6.05. Severability. Any provision of this Agreement that is
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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
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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
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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
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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
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or more counterparts and by different parties on separate counterparts, each
of which shall be an original, but all of which together shall constitute
one and the same instrument.
* * * * * * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized as of the date and year
first above written.
CHRYSLER FINANCIAL CORPORATION
By:
________________________________
Name:
Title:
(COMPANY)
By:
___________________________________
Name:
Title:
