FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934. For the fiscal year ended December 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ____________ to _______________
Commission file number 1-5966
------
Chrysler Financial Corporation
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of 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)
Registrant's telephone number, including area code (810) 948-3058
---------------------------
Securities registered pursuant to Section 12(b) of the Act: (See next page)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes __ x __ No _______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
All of the shares of the outstanding stock of the registrant are owned by
Chrysler Corporation.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ________ No ________
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 31, 1996, there were 250,000 shares of the registrant's common
stock outstanding.
The registrant meets the conditions set forth in General Instructions J(1)(a)
and (b) of Form 10-K and is therefore filing this Form with the reduced
disclosure format.
Documents incorporated by reference are none.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
2
<PAGE>
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- ---------------------
<S> <C>
13 1/4% Notes due October 15, 1999 New York Stock Exchange
12 3/4% Notes due November 1, 1999 New York Stock Exchange
9 1/2% Notes due 1999 New York Stock Exchange
8 1/2% Putable-Extendible Notes due February 1, 2018 New York Stock Exchange
6 1/2% Notes due 1998 New York Stock Exchange
6 5/8% Notes due 2000 New York Stock Exchange
</TABLE>
3
<PAGE>
PART I
ITEM 1. BUSINESS
Chrysler Financial Corporation, the registrant, and its consolidated
subsidiaries (the "Company"), is a financial services organization that
principally provides consumer and dealer automotive financing. The Company
provides retail and lease financing for vehicles, dealer inventory and other
financing needs, dealer property and casualty insurance, and dealership
facility development and management, primarily for Chrysler dealers and their
customers. The Company is a wholly owned subsidiary of Chrysler Corporation (a
Delaware corporation together with its subsidiaries, "Chrysler"). The
registrant, 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 unaffiliated finance company incorporated
in 1926. At December 31, 1996, the Company had nearly 3,000 employees.
The Company's portfolio of finance receivables managed includes receivables
owned and receivables serviced for others. Receivables serviced for others
includes securitized automotive receivables and retail leases. At December 31,
1996, receivables serviced for others accounted for 71% of the Company's
portfolio of receivables managed. Total finance receivables managed at the end
of each of the five most recent years were as follows:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------- ------- ------- ------- ------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Automotive $36,858 $35,696 $29,962 $25,011 $22,481
Nonautomotive 2,204 2,391 2,775 3,251 7,657
------- ------- ------- ------- -------
Total financing $39,062 $38,087 $32,737 $28,262 $30,138
======= ======= ======= ======= =======
</TABLE>
Due to the significant and increasing portion of the Company's business
that relates to Chrysler, lower levels of production and sales of Chrysler
automotive products would likely result in a reduction in the level of
finance operations of the Company.
Automotive Financing. The Company conducts its automotive finance business
through Chrysler Financial Corporation in the United States and Chrysler
Credit Canada Ltd. in Canada (together "Chrysler Financial"). Chrysler
Financial is the major source of car and truck wholesale financing and retail
financing for Chrysler vehicles throughout North America. Chrysler Financial
also offers dealers working capital loans, real estate and equipment financing
and financing plans for fleet buyers, including daily rental car companies
independent of, and affiliated with, Chrysler. The automotive financing
operations of Chrysler Financial are conducted through 29 zone offices in the
United States and Canada. During 1996, Chrysler Financial expanded into
international markets by opening offices in Belgium, France, Italy and Japan.
During 1996, the Company financed or leased approximately 790,000 vehicles at
retail in the United States, including approximately 485,000 new Chrysler cars
and trucks, representing 20 percent of Chrysler's U.S. retail and fleet
deliveries. During 1996, the Company financed or leased approximately 83,000
vehicles at retail in Canada, including approximately 77,000 new Chrysler cars
and trucks, representing 32 percent of Chrysler's Canadian retail and fleet
deliveries. In 1996, the average monthly payment for new vehicle retail
installment sale contracts acquired in the United States was $370. The average
new contract balance was $19,954 and the average original term was 54 months.
During 1996, the Company financed approximately 2,693,000 vehicles at
wholesale in the United States, including approximately 1,771,000 new Chrysler
cars and trucks representing 72 percent of Chrysler's vehicle shipments.
During 1996, the Company financed approximately 177,000 vehicles at wholesale
in Canada, including approximately 157,000 new Chrysler cars and trucks
representing 67 percent of Chrysler's vehicle shipments.
4
<PAGE>
ITEM 1. BUSINESS - continued
Automotive Insurance. Chrysler Insurance Company and its subsidiaries
("Chrysler Insurance"), a wholly owned subsidiary, provides specialized
insurance coverages for automotive dealers and their customers in the United
States and Canada. Chrysler Insurance's property and casualty business
includes physical damage, garage liability, workers' compensation and property
and contents coverage provided directly to automotive dealers. Chrysler
Insurance also provides vehicle collateral protection and single interest
insurance to retail customers and their financing sources.
Automotive Dealership Management. Chrysler Realty Corporation ("Chrysler
Realty"), a wholly owned subsidiary, which is engaged in the ownership,
development and management of Chrysler automotive dealership properties in the
United States, typically purchases, leases or options dealership facilities
and then leases or subleases these facilities to Chrysler dealers. At December
31, 1996, Chrysler Realty controlled 824 sites (of which 259 were owned by
Chrysler Realty).
Nonautomotive Financing. The Company conducts its nonautomotive finance
business through its subsidiary, Chrysler Capital Corporation. At December 31,
1996, the nonautomotive receivables managed throughout the United States
consisted of $0.2 billion of commercial loans and leases and $2.0 billion of
leveraged leases.
Funding. Receivable sales are a significant source of funding. Net proceeds
from the sales of automotive retail receivables were $8.1 billion during 1996
compared to $6.5 billion in 1995. Securitization of revolving wholesale
account balances provided funding which aggregated $6.8 billion and $6.7
billion at December 31, 1996 and 1995, respectively. During 1996, the Company
issued $1.2 billion of term debt (primarily medium term notes) and repaid term
debt of $2.0 billion.
The revolving credit facilities, which total $8.0 billion, consist of a
$2.0 billion facility expiring in April, 1997 and a $6.0 billion facility
expiring in April 2001. These facilities include $0.8 billion allocated to
Chrysler Credit Canada, Ltd. As of December 31, 1996, no amounts were
outstanding under these facilities.
The Company's primary market risks include fluctuations in interest rates,
variability in spread relationships (Prime to LIBOR spreads), mismatches of
repricing intervals between finance receivables and related funding
obligations, and exchange variability in foreign debt issuances. Sensitivity
of earnings to changing interest rates, variability in spread relationships
and mismatches of repricing intervals has been managed by entering into
securitization transactions and the issuance of debt obligations with
appropriate price and term characteristics. Derivative financial instruments,
which consist primarily of interest rate swaps, are utilized to reduce the
exposure to market risks and manage funding costs. Exposure to variability in
foreign exchange rates is mitigated through the use of currency exchange
agreements on foreign debt. The Company does not use derivative financial
instruments for trading purposes.
5
<PAGE>
ITEM 1. BUSINESS - continued
The Company's outstanding debt at the end of each of the five most recent
years was as follows:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Short-term notes
(primarily commercial paper) $ 2,616 $ 2,435 $ 4,315 $ 2,772 $ 352
Bank borrowings under
revolving credit facilities -- -- -- -- 5,924
Bank borrowings - International 90 -- -- -- --
Senior term debt 8,435 9,234 6,069 5,139 4,436
Subordinated term debt -- -- 27 77 585
Other borrowings 104 100 260 447 455
------- ------- ------- ------- -------
Total $11,245 $11,769 $10,671 $ 8,435 $11,752
======= ======= ======= ======= =======
</TABLE>
ITEM 2. PROPERTIES
At December 31, 1996, the following facilities were used by the registrant and
its subsidiaries in conducting their businesses:
(a) executive offices of the registrant, Chrysler Insurance and certain
other domestic subsidiaries in Southfield, Michigan;
(b) a total of 25 zone offices, 2 satellite offices and 3 customer
service centers of Chrysler Financial located throughout the United
States;
(c) headquarters of Chrysler Capital in Stamford, Connecticut;
(d) headquarters of Chrysler Realty in Auburn Hills, Michigan;
(e) a total of 4 offices used as headquarters and zone offices in
Canada; and
(f) a total of 4 offices used for international operations, located in
Belgium, France, Italy and Japan.
All of the facilities described above were leased by the registrant.
At December 31, 1996, a total of 259 automobile dealership properties,
generally consisting of land and improvements, were owned by Chrysler Realty
and leased primarily to dealers franchised by Chrysler.
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of business, the registrant and its subsidiaries are
parties, either as plaintiff or defendant, in various legal proceedings which
are incidental to the business of such companies. The pending proceedings are
not other than ordinary routine litigation and are not deemed by the
registrant to be material with respect to the business of the registrant and
its subsidiaries taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(Omitted in accordance with General Instruction J.)
6
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
All of the outstanding common stock of the registrant, consisting of one class
of common stock, is owned by Chrysler.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Finance revenue
and other revenues $ 2,481 $ 2,439 $ 1,995 $ 2,039 $ 2,575
Earnings before cumulative
effect of changes in
accounting principles $ 376 $ 339 $ 195 $ 159 $ 180
Cumulative effect of changes
in accounting principles $ -- $ -- $ -- $ (30) $ 51
Net earnings $ 376 $ 339 $ 195 $ 129 $ 231
Total assets $ 17,533 $ 17,835 $ 16,648 $ 14,251 $ 17,585
Total debt $ 11,245 $ 11,769 $ 10,671 $ 8,435 $ 11,752
Cash dividends:
Preferred stock $ -- $ -- $ -- $ -- $ 1
Common stock $ 382 $ 335 $ 40 $ -- $ --
</TABLE>
7
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Review
Chrysler Financial Corporation and its consolidated subsidiaries (the
"Company") achieved record net earnings of $376 million in 1996
compared to $339 million and $195 million in 1995 and 1994,
respectively. The increase in net earnings for 1996 compared to 1995
primarily reflects net margin improvements partially offset by an
increase in the provision for credit losses. The increase in net
earnings for 1995 compared to 1994 primarily reflects higher levels of
automotive financing, lower operating expenses and lower costs of bank
facilities.
Automotive volume totaled $77.2 billion in 1996, compared with $81.9 billion
and $70.4 billion in 1995 and 1994, respectively. The decrease in automotive
volume from 1996 to 1995 is primarily due to increased competition and actions
taken by the Company to improve retail credit mix. The increase in automotive
volume in 1995 compared to 1994 reflects higher retail lease penetration and
higher levels of dealer financing.
Financing support provided in the United States for new Chrysler vehicle
retail deliveries (including fleet), and wholesale vehicle sales to dealers
and the number of vehicles financed over the last three years were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
United States Penetration:
Retail 20% 27% 24%
Wholesale 72% 74% 73%
Number of New Chrysler Vehicles
Financed in the United States
(in thousands):
Retail 485 594 525
Wholesale 1,771 1,632 1,647
</TABLE>
Net margin totaled $783 million in 1996 compared to $675 million in 1995 and
$603 million in 1994. Automotive financing revenue totaled $1,540 million in
1996, compared with $1,475 million in 1995 and $1,089 million in 1994. The
increase in net margin in 1996 primarily reflects lower average effective cost
of borrowings. The increase in net margin from 1994 to 1995 reflects higher
average automotive finance receivables outstanding and vehicles leased, and
lower average effective cost of borrowings.
A comparison of the borrowing costs is shown in the following table:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
(dollars in millions)
<S> <C> <C> <C>
Interest expense $ 797 $ 910 $ 754
Average borrowings $11,590 $11,463 $ 9,407
Average effective cost of
borrowings:
Consolidated 6.9% 7.9% 8.0%
U.S. and Canada 6.9% 7.4% 7.4%
</TABLE>
8
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Financial Review (continued)
The decline in the average effective borrowing costs for the year ended
December 31, 1996, primarily reflects lower market interest rates in the
United States and Canada.
Service fee income was $299 million for the year ended December 31, 1996,
compared to $271 million and $247 million for the years ended December 31,
1995 and 1994, respectively. The increase in service fee income over the last
two years is due to higher levels of sold receivables which the Company
continues to service.
Investment and other income decreased to $382 million in 1996, compared to
$397 million and $243 million in 1995 and 1994, respectively. Investment and
other income reflects a $9 million loss from the sale of certain nonautomotive
assets during 1996 and a gain of $12 million on the sale of certain
nonautomotive assets during 1995. The increase in receivable sale gains for
1996 compared to 1995 was offset by a decrease in interest income earned on
cash equivalents and marketable securities. The increase in investment and
other income for 1995 compared to 1994 was primarily due to an increase in
gains on sales of receivables and higher average outstandings of cash
equivalents and marketable securities.
Operating and other expenses totaled $523 million in 1996, compared to $508
million and $603 million in 1995 and 1994, respectively. The decline in
operating and other expenses in 1995 compared to 1994 reflects the downsizing
and sale of nonautomotive operations.
Provision for credit losses for 1996 totaled $387 million compared to $342
million and $203 million for 1995 and 1994, respectively. The increase in
provision for credit losses in 1996 compared to 1995 reflects higher loss
experience from retail automotive receivables. The increase in the provision
for credit losses for 1995 compared to 1994 reflects an increase in automotive
volume.
Total assets at December 31, 1996 were $17.5 billion, compared to $17.8
billion and $16.6 billion at December 31, 1995 and 1994, respectively. Total
debt outstanding at December 31, 1996 was $11.2 billion, compared to $11.8
billion at December 31, 1995 and $10.7 billion at December 31, 1994. The
Company's debt-to-equity ratio was 3.4 to 1 at December 31, 1996, compared to
3.6 to 1 at December 31, 1995, and 3.3 to 1 at December 31, 1994.
The Company's portfolio of finance receivables managed, which includes
receivables owned and receivables serviced for others, totaled $39.1 billion
at December 31, 1996, compared to $38.1 billion at December 31, 1995, and
$32.7 billion at December 31, 1994. The increase in finance receivables
managed over the last two years reflects higher automotive volume. Receivables
serviced for others totaled $27.8 billion at December 31, 1996, compared to
$25.2 billion at December 31, 1995, and $20.1 billion at December 31, 1994.
9
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Financial Review (continued)
Net credit loss experience, including net losses on receivables sold subject
to limited recourse provisions, for the years ended December 31, 1996, 1995
and 1994 was as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
Net Credit Losses:
<S> <C> <C> <C>
Automotive financing $ 358 $ 229 $ 117
Nonautomotive financing 35 23 41
------ ------ ------
Total $ 393 $ 252 $ 158
====== ====== ======
<CAPTION>
Year Ended December 31,
-------------------------------------
1996 1995 1994
---- ---- ----
Net Credit Losses to
Average Receivables Outstanding
<S> <C> <C> <C>
Automotive financing 1.06% 0.70% 0.42%
Nonautomotive financing 1.06% 0.69% 1.05%
Total 1.06% 0.70% 0.50%
</TABLE>
During the fourth quarter of 1995 and throughout 1996, the Company experienced
higher credit losses on automotive retail receivables. Company management
attributes the increased losses to the combined effect of a deterioration in
consumer credit markets, an increase in the frequency of repossessions, and
organizational realignments within the Company that affected retail
collections. Recent credit loss experience may continue while continued
actions are taken to improve the credit mix and servicing of the Company's
automotive retail receivables. However, no assurance can be given as to future
results.
The Company's allowance for credit losses totaled $526 million, $578 million,
and $512 million at December 31, 1996, 1995, and 1994, respectively. The
allowance for credit losses as a percentage of related finance receivables
outstanding was 1.52 percent at December 31, 1996, 1.69 percent at December
31, 1995, and 1.66 percent at December 31, 1994. The decline in the allowance
for credit losses as a percentage of related finance receivables outstanding
from December 31, 1995 is primarily attributable to the Company's sale of
nonautomotive assets and higher loss experience on the Company's retail
automotive receivables.
Liquidity and Capital Resources
Term debt, commercial paper, and receivable sales represent the Company's
primary funding sources. During 1996, the Company issued $1.2 billion of term
debt (primarily medium term notes), repaid term debt of $2.0 billion and
increased its commercial paper by $0.2 billion.
10
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Liquidity and Capital Resources (Continued)
Receivable sales continued to be a significant source of funding during 1996
as the Company realized $8.1 billion of net proceeds from the sale of
automotive retail receivables, compared to $6.5 billion of net proceeds in
1995. Securitization of revolving wholesale account balances provided funding
which aggregated $6.8 billion and $6.7 billion at December 31, 1996 and 1995,
respectively.
At December 31, 1996, the Company had contractual debt maturities of $5.7
billion in 1997 (including $2.6 billion of short-term notes with an average
remaining term of 37 days), $2.6 billion in 1998, $1.6 billion in 1999, $0.8
billion in 2000, $0.4 billion in 2001, and $0.1 billion in years thereafter.
The revolving credit facilities which total $8.0 billion consist of a $2.0
billion facility expiring in April, 1997 and a $6.0 billion facility expiring
in April, 2001. These facilities include $0.8 billion allocated to Chrysler
Credit Canada Ltd. As of December 31, 1996, no amounts were outstanding under
these facilities.
The Company paid dividends to Chrysler Corporation totaling $382 million, $335
million and $40 million for the years ended December 31, 1996, 1995, and 1994,
respectively.
The Company believes that cash provided by operations, receivable sales,
securitizations, and issuance of term debt and commercial paper will provide
sufficient liquidity to meet its funding requirements.
New Accounting Standard
In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
125 requires securitization transactions to be accounted for as sales when
legal and effective control over transferred receivables is surrendered. In
addition, servicing assets or liabilities are to be recognized when servicing
rights are retained by the seller. Current accounting standards do not permit
recognition of servicing assets arising from securitization transactions. SFAS
No. 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is to be
applied prospectively.
The Company will adopt SFAS No. 125 on January 1, 1997, as required. SFAS No.
125 is not expected to have a material effect on results of operations or
financial position when adopted. Securitization transactions entered into
after December 31, 1996 are expected to be structured in a manner that
qualifies for sale accounting under SFAS No. 125. Gains or losses from
securitization transactions occurring after December 31, 1996 may vary from
historical results due to, among other things, adoption of SFAS No. 125, the
level of securitization activity and interest rates.
11
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Net Earnings
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Finance Revenue (Notes 1 and 11):
Automotive:
Retail $ 710 $ 718 $ 545
Wholesale and other 588 653 523
Vehicles leased - rents and fees (Notes 5 and 9) 242 104 21
Nonautomotive 132 156 279
------ ------ ------
Total finance revenue 1,672 1,631 1,368
Interest expense (Note 6) 797 910 754
Depreciation on vehicles leased (Note 1) 92 46 11
------ ------ ------
Net margin 783 675 603
Other Revenues:
Servicing fee income (Note 1) 299 271 247
Insurance premiums earned (Note 7) 128 140 137
Investment and other income (Note 3) 382 397 243
------ ------ ------
Net margin and other revenues 1,592 1,483 1,230
------ ------ ------
Costs and Expenses:
Operating and other expenses 523 508 603
Provision for credit losses (Notes 1 and 2) 387 342 203
Insurance losses and loss adjustment expenses
(Notes 1 and 7) 96 111 109
------ ------ ------
Total costs and expenses 1,006 961 915
------ ------ ------
Earnings before income taxes 586 522 315
Provision for income taxes (Note 8) 210 183 120
------ ------ ------
Net Earnings $ 376 $ 339 $ 195
====== ====== ======
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
12
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Balance Sheet
December 31,
---------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Assets (Note 1):
Finance receivables - net (Note 2) $11,158 $12,644
Retained interests in sold receivables - net (Notes 2 and 3) 3,153 2,733
------- -------
Total finance receivables and retained interests - net 14,311 15,377
Cash and cash equivalents (Note 4) 230 476
Marketable securities (Note 4) 472 674
Vehicles leased - net (Note 5) 614 397
Dealership properties leased - net (Note 5) 319 363
Repossessed collateral 146 194
Loans and other amounts due from affiliated companies (Note 11) 859 --
Other assets 582 354
------- -------
Total Assets $17,533 $17,835
======= =======
Liabilities (Note 1):
Debt (Note 6) $11,245 $11,769
Accounts payable, accrued expenses and other (Note 7) 1,372 1,236
Amounts due to affiliated companies (Note 11) -- 29
Deferred income taxes (Note 8) 1,628 1,499
------- -------
Total Liabilities 14,245 14,533
------- -------
Commitments and contingent liabilities (Notes 3, 7 and 9)
Shareholder's Investment (Note 10):
Common stock - par value $100 per share:
Authorized, issued and outstanding 250,000 shares 25 25
Additional paid-in capital 1,168 1,168
Retained earnings 2,095 2,109
------- -------
Total Shareholder's Investment 3,288 3,302
------- -------
Total Liabilities and Shareholder's Investment $17,533 $17,835
======= =======
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
13
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended December 31,
----------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 376 $ 339 $ 195
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Net gains from receivable sales (169) (122) (59)
Net loss (gain) from sales of nonautomotive assets 9 (12) --
Provision for credit losses 387 342 203
Depreciation and amortization 118 88 83
Change in deferred income taxes and income taxes payable 136 (62) 42
Change in amounts due to/from affiliated companies 104 136 (82)
Change in accounts payable, accrued expenses
and other assets (58) 59 160
-------- -------- --------
Net cash provided by operating activities 903 768 542
-------- -------- --------
Cash Flows From Investing Activities:
Acquisitions of finance receivables (72,339) (74,770) (66,334)
Collections of finance receivables 21,646 27,164 28,251
Sales of finance receivables 50,126 46,262 35,543
Purchases of marketable securities (Note 4) (1,910) (2,189) (2,013)
Sales and maturities of marketable securities 3,096 2,386 2,056
Change in loans to affiliated companies (Note 11) (825) -- --
Purchases of vehicles leased (366) (321) (143)
Sales of vehicles leased 59 16 --
Sales of nonautomotive assets 225 94 --
Other 11 129 (181)
-------- -------- --------
Net cash used in investing activities (277) (1,229) (2,821)
-------- -------- --------
Cash Flows From Financing Activities:
Change in short-term notes and affiliated borrowings 181 (1,880) 1,535
Issuance of term debt 1,163 4,281 1,762
Repayment of term debt (1,962) (1,143) (882)
Change in bank borrowings - International 90 -- --
Payment of dividends (382) (335) (40)
Other 38 (160) (187)
-------- -------- --------
Net cash (used in) provided by financing activities (872) 763 2,188
-------- -------- --------
Change in cash and cash equivalents (246) 302 (91)
Cash and cash equivalents at beginning of year 476 174 265
-------- -------- --------
Cash and Cash Equivalents at End of Year $ 230 $ 476 $ 174
======== ======== ========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Chrysler
Financial Corporation and its consolidated subsidiaries (the "Company").
Intercompany accounts and transactions have been eliminated. Chrysler
Financial Corporation's common shares are owned by Chrysler Corporation
(together with its subsidiaries, "Chrysler"). Amounts for prior years have
been reclassified to conform with the current year's classifications.
Nature of Operations
The Company is a financial services organization that principally provides
consumer and dealer automotive financing. The Company provides retail and
lease financing for vehicles, dealer inventory and other financing needs,
dealer property and casualty insurance, and dealership facility development
and management primarily for Chrysler dealers and their customers. The
principal markets for the Company's automotive financial products and services
are the United States and Canada. During 1996, the Company expanded into
international markets by opening offices in Belgium, France, Italy and Japan.
The Company's nonautomotive operations consist of leveraged lease investments
and other commercial loans.
Use of Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Receivable Sales
The Company sells significant amounts of automotive retail and wholesale
receivables in transactions subject to limited recourse provisions. The
Company generally sells its receivables to a trust and remains as servicer for
which it is paid a servicing fee. Normal servicing fees are earned on a level
yield basis over the remaining terms of the related sold receivables. In a
subordinated capacity, the Company retains residual cash flows, a limited
interest in the principal balances of the sold receivables and certain cash
deposits provided as credit enhancements for investors.
Gains or losses from the sales of retail receivables are recognized in the
period in which such sales occur. In determining the gain or loss for each
qualifying sale of retail receivables, the investment in the sold receivable
pool is allocated between the portion sold and the portion retained, based on
their relative fair values. Since the allowance for credit losses is provided
prior to receivable sales, gains from receivable sales are not reduced for
expected credit losses. Gains or losses are reflected under the caption,
"Investment and other income." Gains on sales of wholesale receivables are not
material.
In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
125 requires securitization transactions to be accounted for as sales when
legal and effective control over transferred receivables is surrendered. In
addition, servicing assets or liabilities are to be recognized when servicing
rights are retained by the seller. Current accounting standards do not permit
recognition of servicing assets arising from securitization transactions. SFAS
No. 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is to be
applied prospectively.
15
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies (continued)
The Company will adopt SFAS No. 125 on January 1, 1997, as required. SFAS No.
125 is not expected to have a material effect on results of operations or
financial position when adopted. Securitization transactions entered into
after December 31, 1996 are expected to be structured in a manner that
qualifies for sale accounting under SFAS No. 125. Gains or losses from
securitization transactions occurring after December 31, 1996 may vary from
historical results due to, among other things, adoption of SFAS No. 125, the
level of securitization activity and interest rates.
Revenue Recognition
Finance revenue from finance receivables is recognized using the interest
method. Certain loan and lease origination costs are deferred and amortized to
finance revenue over the contractual terms.
Recognition of finance revenue is generally suspended when a loan or lease
becomes contractually delinquent for periods ranging from 60 to 90 days.
Finance revenue recognition is resumed when the loan or lease becomes
contractually current, at which time all past due finance revenue is
recognized.
Property and casualty premiums are earned on a straight-line basis over the
term of their respective policies.
Lease Transactions
Leasing operations consist of operating leases of vehicles and leveraged
leases of major equipment and real estate, all of which are accounted for in
accordance with the classification of the leases. The related revenue is
recorded as finance revenue. Depreciation is provided for on a straight-line
basis over the term of the lease.
The Company has significant investments in the residual values of its leasing
portfolios. These residual values represent estimates of the value of the
leased assets at the end of the contract terms and are initially recorded
based upon appraisals and estimates. Residual values are continually reviewed
to determine that recorded amounts are appropriate.
Allowance for Credit Losses
An allowance for credit losses is generally established during the period in
which receivables or vehicles leased are acquired. The allowance for credit
losses is maintained at a level deemed appropriate, based primarily on loss
experience. Other factors affecting collectibility are also evaluated, and
appropriate adjustments are recorded. Retail automotive receivables and
vehicles leased not supported by a dealer guaranty are charged to the
allowance for credit losses net of the estimated value of repossessed
collateral at the time of repossession. Nonautomotive finance receivables are
reduced to the estimated fair value of the collateral when loans are deemed to
be impaired.
Reserve for Insurance Losses and Loss Adjustment Expenses
The reserve for insurance losses and loss adjustment expenses, included in
"Accounts payable, accrued expenses and other", represents the estimated net
liability for incurred losses based upon prior years' experience adjusted for
current trends. The methods for making such estimates and for establishing the
resulting liability are continually reviewed, and adjustments are recorded, if
necessary.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies (continued)
Cash Equivalents
Temporary investments of excess borrowed funds with a maturity of less than
three months when purchased are considered to be cash equivalents.
Marketable Securities
The Company's debt and equity securities are classified as available-for-sale
and are reported at fair value. Changes in the fair value of
available-for-sale securities are recorded as adjustments to retained
earnings, net of applicable deferred taxes. The Company determines gains and
losses on securities using the specific identification method.
Repossessed Collateral
Repossessed collateral and real estate owned are carried at the lower of fair
value less estimated selling expenses or cost. Repossessed collateral carrying
costs and gains or losses from disposition of such assets are recognized in
the period incurred. Fair value for real estate owned is determined by
appraisal. Other factors affecting collectibility are also evaluated and
adjustments are recorded, if necessary.
Derivative Financial Instruments
The Company uses derivative financial instruments to manage funding costs and
exposures arising from changes in interest rates and currency exchange rates.
These derivative financial instruments include interest rate swaps and
currency exchange agreements. The Company does not use derivative financial
instruments for trading purposes.
Interest differentials resulting from interest rate swap agreements used to
change the interest rate characteristics of the Company's debt are recorded on
an accrual basis as an adjustment to interest expense. Interest rate swaps
related to term debt are matched with specific obligations. Interest rate
swaps are matched with groups of commercial paper obligations on a layered
basis.
Gains or losses on early terminations of derivative financial instruments that
modify the interest rate characteristics of debt are deferred and amortized as
adjustments to interest expense over the remaining term of the related
borrowing.
The Company hedges against borrowings denominated in currencies other than the
borrowers' local currency. Such borrowings are translated in the financial
statements at the rates of exchange established under the related currency
exchange agreements.
Income Taxes
Chrysler Financial Corporation and its U.S. subsidiaries are included in
Chrysler's consolidated U.S. income tax return. The Company's provision for
income taxes is determined on a separate return basis. Under the Tax Sharing
Agreement between the Company and Chrysler, U.S. income taxes have been
settled substantially without regard to alternative minimum tax or limitations
on utilization of net operating losses and foreign tax credits.
Deferred tax liabilities reflect the impact of temporary differences between
the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
17
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Finance Receivables and Retained Interests - Net
Outstanding balances of "Finance receivables - net" were as follows:
<TABLE>
<CAPTION>
December 31,
----------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Automotive:
Retail (Note 11) $ 4,710 $ 6,528
Wholesale and other (Note 11) 3,755 3,059
Retained senior interests in sold
wholesale receivables (1) 677 935
-------- --------
Total automotive 9,142 10,522
Nonautomotive:
Leveraged leases 1,952 1,679
Commercial 252 712
-------- --------
Total nonautomotive 2,204 2,391
-------- --------
Total finance receivables 11,346 12,913
Allowance for credit losses (2) (188) (269)
-------- --------
Total finance receivables - net $ 11,158 $ 12,644
======== ========
<FN>
(1) Represents receivables held in trust eligible to be securitized or
returned to the Company.
(2) During 1996, the allowance for credit losses was reduced $40 million as a
result of the sale of nonautomotive assets.
</TABLE>
The Company's retained interests in sold receivables are generally restricted
and subject to limited recourse provisions. The following is a summary of
amounts included in "Retained interests in sold receivables - net":
<TABLE>
<CAPTION>
December 31,
----------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Cash and investments $ 460 $ 424
Subordinated interests in receivables 2,589 2,206
Residual cash flows 202 166
Other 237 243
Allowance for credit losses (335) (306)
------- -------
Total retained interests in sold receivables - net $ 3,153 $ 2,733
======= =======
</TABLE>
<PAGE>
Changes in the allowance for credit losses, including receivables sold subject
to limited recourse provisions and vehicles leased, were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Balance at beginning of year $ 578 $ 512 $ 494
Provision for credit losses 387 342 203
Net credit losses (393) (252) (158)
Reduction due to sale of nonautomotive assets (40) -- --
Other adjustments (6) (24) (27)
----- ----- -----
Balance at end of year $ 526 $ 578 $ 512
===== ===== =====
</TABLE>
18
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Finance Receivables and Retained Interests - Net (continued)
Nonearning finance receivables and nonearning receivables sold subject to
limited recourse provisions totaled $263 million and $333 million, at December
31, 1996 and 1995, respectively, which represented 0.8 percent and 1.0 percent
of such receivables outstanding, respectively.
Maturities of finance receivables at December 31, 1996, are as follows: 1997 -
$5,979 million; 1998 - $1,391 million; 1999 - $1,102 million; 2000 - $646
million; 2001 - $538 million; and thereafter - $1,690 million. Actual cash
flow experience will vary from contractual maturities due to future receivable
sales, prepayments and charge-offs.
The Company's investment in leveraged leases included in "Finance receivables
- - net" and related deferred income taxes, were as follows:
<TABLE>
<CAPTION>
December 31,
----------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Rentals receivable (net of principal and
interest on non-recourse debt) $ 2,015 $ 1,608
Residual values 923 850
Unearned income (903) (688)
Deferred investment tax credits (83) (91)
------- -------
Net receivables 1,952 1,679
Deferred income taxes (1,554) (1,468)
------- -------
Net investment in leveraged leases $ 398 $ 211
======= =======
</TABLE>
Note 3 - Sales of Receivables
The Company sells receivables subject to limited recourse provisions.
Outstanding balances of sold finance receivables, excluding retained senior
interests in sold wholesale receivables, were as follows:
<TABLE>
<CAPTION>
December 31,
--------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Retail $15,048 $13,043
Wholesale 8,014 8,010
------- -------
Total $23,062 $21,053
======= =======
</TABLE>
Included in "Investment and other income" are net gains before expected credit
losses totaling $169 million, $122 million and $59 million for the years ended
December 31, 1996, 1995 and 1994, respectively. The provision for credit
losses related to such sales amounted to $244 million, $180 million and $130
million for the years ended December 31, 1996, 1995 and 1994, respectively.
The Company is committed to sell all wholesale receivables related to certain
dealer accounts.
19
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 - Securities
Contractual maturities of marketable debt securities at December 31, 1996,
were as follows:
<TABLE>
<CAPTION>
Available-for-sale
Securities
------------------
Fair
Cost Value
---- -----
(in millions of dollars)
<S> <C> <C>
Within one year $117 $117
After one year through five years 111 114
After five years through ten years 59 60
After ten years 139 140
---- ----
Total $426 $431
==== ====
</TABLE>
The proceeds from sales of available-for-sale securities were $138 million,
$129 million and $63 million for the years ended December 31, 1996, 1995 and
1994, respectively. The related realized gains and losses were immaterial.
Information with respect to the Company's portfolio of securities, which
includes investments classified as marketable securities and cash equivalents
was as follows:
<TABLE>
<CAPTION>
December 31, 1996
------------------------------------
Fair Gross Unrealized
Cost Value Gains Losses
---- ----- ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C>
Available-for-sale securities:
Bonds - Corporate/Public Utility $111 $114 $ 5 $ 2
State/Municipal 50 51 1 --
Government securities - United States
and Canada 156 157 3 2
Short-term notes 37 37 -- --
Asset-backed securities* 72 72 -- --
---- ---- ---- ----
Total debt securities 426 431 9 4
Common stocks 13 13 -- --
Preferred stocks 27 28 1 --
---- ---- ---- ----
Total available-for-sale securities 466 472 $ 10 $ 4
==== ====
Cash equivalents 38 38
---- ----
Total securities $504 $510
==== ====
<PAGE>
<CAPTION>
December 31, 1996
------------------------------------
Fair Gross Unrealized
Cost Value Gains Losses
---- ----- ----- -------
(in millions of dollars)
<S> <C> <C> <C> <C>
Available-for-sale securities:
Bonds - Corporate/Public Utility $112 $120 $ 9 $ 1
State/Municipal 48 48 -- --
Government securities - United States
and Canada 186 188 4 2
Short-term notes 21 21 -- --
Asset-backed securities* 270 278 8 --
---- ---- ---- ----
Total debt securities 637 655 21 3
Preferred stocks 18 19 1 --
---- ---- ---- ----
Total available-for-sale securities 655 674 $ 22 $ 3
==== ====
Cash equivalents 270 270
---- ----
Total securities $925 $944
==== ====
<FN>
* Money market notes purchased from trusts established in connection with the
Company's securitization of retail receivables.
</TABLE>
20
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 - Securities (continued)
The Company had $400 million and $394 million of marketable securities limited
for use in its insurance operations in accordance with various statutory
requirements at December 31, 1996 and 1995, respectively.
The Company acquired $1 billion and $250 million of asset-backed securities in
non-cash transactions relating to the securitization of retail receivables
during 1996 and 1995, respectively.
Note 5 - Vehicles Leased and Dealership Properties Leased
"Vehicles leased - net" was as follows:
<TABLE>
<CAPTION>
December 31,
----------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Vehicles at cost $ 743 $ 454
Accumulated depreciation (126) (54)
Allowance for credit losses (3) (3)
----- -----
Vehicles leased - net $ 614 $ 397
===== =====
</TABLE>
Future minimum rentals on vehicles leased at December 31, 1996 are as follows:
1997 - $147 million; 1998 - $79 million; 1999 - $9 million; and 2000 - $1
million.
"Dealership properties leased - net" was as follows:
<TABLE>
<CAPTION>
December 31,
----------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Dealership properties at cost $ 441 $ 490
Accumulated depreciation (122) (127)
----- -----
Dealership properties leased - net $ 319 $ 363
===== =====
</TABLE>
Future minimum rentals on dealership properties leased at December 31, 1996
are as follows: 1997 - $76 million; 1998 - $62 million; 1999 - $49 million;
2000 - $33 million; 2001 - $20 million; and thereafter - $29 million.
Note 6 - Debt
Average effective cost of borrowing was as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1996 1995
-------------------- ----------------------
Short- Short-
Term Term Total Term Term Total
Notes Debt Debt Notes Debt Debt
------ ---- ----- ------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
United States operations 6.1% 6.9% 6.9% 6.8% 7.4% 7.3%
Consolidated operations 5.6% 7.0% 6.9% 6.9% 8.2% 7.9%
</TABLE>
21
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 - Debt (continued)
Debt outstanding at December 31, 1996 and 1995 was as follows:
<TABLE>
<CAPTION>
Weighted Average December 31,
Interest Rates* at -------------------
Maturity December 31, 1996 1996 1995
- -------- ------------------ ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Short-term notes placed primarily in the open market:
United States $ 2,008 $ 2,194
Canada 608 241
------------ ------------
Total short-term notes (primarily
commercial paper) 5.0% 2,616 2,435
------------ ------------
Bank borrowings - International 4.0% 90 --
------------ ------------
Senior term debt:
United States, due
1996 -- 1,600
1997 6.5% 2,877 2,877
1998 6.4% 2,309 1,885
1999 8.1% 1,531 1,394
2000 6.4% 788 770
2001 5.5% 376 --
Thereafter 6.2% 49 391
------------ ------------
Total United States 7,930 8,917
Canada, due 1996-1999 7.5% 505 317
------------ ------------
Total senior term debt 8,435 9,234
Other borrowings 8.6% 104 100
------------ ------------
Total debt $ 11,245 $ 11,769
============ ============
<FN>
* The weighted average interest rates, including the effects of interest rate
exchange agreements, have been calculated on the basis of rates in effect at
December 31, 1996, including $2,425 million of variable rate senior term
debt.
</TABLE>
Interest paid by the Company for the years ended December 31, 1996, 1995 and
1994 amounted to $788 million, $847 million and $733 million, respectively.
The Company has contractual debt maturities at December 31, 1996, as follows:
1997 - $5.7 billion (including $2.6 billion of short-term notes with an
average remaining term of 37 days); 1998 - $2.6 billion; 1999 - $1.6 billion;
2000 - $0.8 billion; 2001 - $0.4 billion; and thereafter - $0.1 billion.
The Company manages its exposure arising from changes in interest rates and
currency exchange rates by utilizing derivative financial instruments (see
Note 13 - Financial Instruments).
Credit Facilities
The revolving credit facilities, which total $8.0 billion, consist of a $2.0
billion facility expiring in April, 1997 and a $6.0 billion facility expiring
in April, 2001. These facilities include $0.8 billion allocated to Chrysler
Credit Canada Ltd. As of December 31, 1996, no amounts were outstanding under
these facilities.
22
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 7 - Reinsurance Arrangements and Property and Casualty Insurance Reserves
The Company enters into various reinsurance contracts with other insurance
enterprises and reinsurers to reduce the losses that may arise from
catastrophes or other events. Reinsurance contracts do not relieve the Company
from its obligations to policyholders. Failure of reinsurers to fulfill their
obligations could result in losses to the Company.
The amounts reported as "Insurance premiums earned" are net of related ceded
reinsurance premiums of $49 million, $46 million and $40 million for the years
ended December 31, 1996, 1995 and 1994, respectively. Amounts reported as
"Insurance losses and loss adjustment expenses" are net of related reinsurance
loss and loss adjustment expenses of $28 million, $26 million and $28 million
for the years ended December 31, 1996, 1995 and 1994, respectively.
Included in "Accounts payable, accrued expenses and other" are net unearned
premiums and net reserves for insurance losses and loss adjustment expenses
for the Company's property and casualty and life insurance operations, as
follows:
<TABLE>
<CAPTION>
December 31,
---------------
1996 1995
---- ----
(in millions of dollars)
<S> <C> <C>
Direct and assumed unearned premiums $ 58 $ 68
Reinsurance ceded (6) (7)
----- -----
Net unearned premiums $ 52 $ 61
===== =====
Direct and assumed reserve for insurance losses
and loss adjustment expenses $ 210 $ 216
Reinsurance ceded (38) (33)
----- -----
Net reserve for insurance losses and loss
adjustment expenses $ 172 $ 183
===== =====
</TABLE>
Changes in the net reserve for unpaid losses and loss adjustment expenses net
of reinsurance, salvage and subrogation for the Company's property and
casualty operations were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Balance at beginning of year (net of reinsurance
ceded of $33 million, $44 million and $47 million) $ 180 $ 177 $ 166
Incurred related to:
Current year 109 117 115
Prior years (12) (8) (8)
----- ----- -----
Total incurred 97 109 107
----- ----- -----
Paid related to:
Current year (49) (51) (42)
Prior years (56) (55) (54)
----- ----- -----
Total paid (105) (106) (96)
----- ----- -----
Balance at end of year (net of reinsurance
ceded of $38 million, $33 million and $44 million) $ 172 $ 180 $ 177
===== ===== =====
</TABLE>
23
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 8 - Income Taxes
The provision for income taxes included the following:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Current tax expense (credit):
United States $ 56 $ 218 $ 86
State and local (3) 15 10
Foreign 10 14 22
----- ----- -----
Total current tax expense (credit) 63 247 118
----- ----- -----
Deferred tax expense (credit):
United States 111 (71) (8)
State and local 22 3 11
Foreign 14 4 (1)
----- ----- -----
Total deferred tax expense (credit) 147 (64) 2
----- ----- -----
Total provision for income taxes $ 210 $ 183 $ 120
===== ===== =====
</TABLE>
Income taxes paid by the Company for the years ended December 31, 1996, 1995
and 1994 amounted to $4 million, $337 million and $27 million, respectively.
Included in these amounts were taxes refunded (net of taxes paid) by Chrysler
under the Tax Sharing Agreement of $13 million in 1996, and taxes paid (net of
refunds) to Chrysler under the Tax Sharing Agreement of $312 million and $15
million in 1995 and 1994, respectively.
The provision for income taxes differs from the amount of income tax
determined by applying the U.S. statutory income tax rate to earnings before
income taxes, as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Tax at U.S. statutory rate $ 205 $ 183 $ 110
State and local income taxes 12 12 14
Foreign income taxes 5 8 7
Tax credits (6) (2) (1)
Purchase accounting adjustments -- (6) 2
Leveraged lease rate adjustments (5) (5) (6)
Other (1) (7) (6)
----- ----- -----
Total provision for income taxes $ 210 $ 183 $ 120
===== ===== =====
Effective tax rate 35.8% 35.0% 38.1%
Statutory tax rate 35.0% 35.0% 35.0%
</TABLE>
24
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 8 - Income Taxes (continued)
The tax-effected temporary differences which comprise deferred tax assets and
liabilities were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------------
1996 1995
---------------------- ---------------------
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
-------- ----------- -------- -----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Nondeductible reserves $ 201 $ -- $ 182 $ --
Leasing activities -- 1,768 -- 1,674
Depreciation -- 9 -- 11
State and local taxes -- 127 -- 106
Postretirement benefits other than pensions 23 -- 20 --
Foreign currency exchange 29 -- 28 --
Servicing transactions 40 -- 61 --
Other 59 76 70 69
------ ------ ------ ------
Total $ 352 $1,980 $ 361 $1,860
====== ====== ====== ======
</TABLE>
Note 9 - Commitments and Contingent Liabilities
Various legal actions are pending against the Company, some of which seek
damages in large or unspecified amounts and other relief. The Company believes
each proceeding constitutes routine litigation encountered in the normal
course of business. Although the ultimate amount of liability with respect to
such matters cannot be determined at December 31, 1996, the Company has
established reserves which it believes will be sufficient to cover these
matters. After giving effect to these reserves, management believes the
ultimate resolution of these matters will not have a material adverse effect
on the Company's financial position.
In connection with a funding agreement with a third party, the Company
originates and services a portfolio of vehicles leased to others. Net fees
under this agreement are included in "Finance Revenue" in "Vehicles leased -
rents and fees." At December 31, 1996, the Company is contingently liable
under this agreement for approximately $46 million.
The Company is obligated under terms of noncancelable operating leases for the
majority of its office facilities and equipment, as well as for a number of
dealership facilities which are subleased to Chrysler-authorized automotive
dealers. These leases are generally renewable and provide that certain
expenses related to the properties are to be paid by the lessee.
Future minimum lease commitments under the aforementioned leases with
remaining terms in excess of one year at December 31, 1996 are as follows:
1997 - $42 million; 1998 - $37 million; 1999 - $32 million; 2000 - $27
million; 2001 - $20 million; and thereafter - $62 million. Future minimum
lease commitments have not been reduced by minimum sublease rentals of $134
million due in the future under noncancelable subleases.
Rental expense for operating leases for the years ended December 31, 1996,
1995 and 1994 was $47 million, $50 million and $53 million, respectively.
Sublease rentals of $37 million, $40 million and $42 million were received in
1996, 1995 and 1994, respectively.
25
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 10 - Shareholder's Investment
"Shareholder's Investment" is summarized as follows:
<TABLE>
<CAPTION>
Additional Total
Common Paid-In Retained Shareholder's
Stock Capital Earnings Investment
------ ---------- -------- -------------
(in millions of dollars)
<S> <C> <C> <C> <C>
Balance - December 31, 1993 $ 25 $ 1,168 $ 1,938 $ 3,131
Net earnings -- -- 195 195
Common stock dividends -- -- (40) (40)
Net unrealized holding losses on
securities -- -- (13) (13)
------- ------- ------- -------
Balance - December 31, 1994 25 1,168 2,080 3,273
------- ------- ------- -------
Net earnings -- -- 339 339
Common stock dividends -- -- (335) (335)
Net unrealized holding gains on
securities -- -- 25 25
------- ------- ------- -------
Balance - December 31, 1995 25 1,168 2,109 3,302
------- ------- ------- -------
Net earnings -- -- 376 376
Common stock dividends -- -- (382) (382)
Net unrealized holding losses on
securities -- -- (8) (8)
------- ------- ------- -------
Balance - December 31, 1996 $ 25 $ 1,168 $ 2,095 $ 3,288
======= ======= ======= =======
</TABLE>
Note 11 - Transactions with Affiliates
The Company has an Income Maintenance Agreement with Chrysler. The agreement
provides for payments to maintain the Company's required coverage of earnings
available for fixed charges at 110 percent. No payments were required pursuant
to the Income Maintenance Agreement for 1996, 1995 or 1994.
Gains and losses from translating assets and liabilities outside the United
States to U.S. dollar equivalents are credited or charged to Chrysler in
accordance with an agreement indemnifying the Company against losses incurred
as a result of foreign exchange risks. Pursuant to this agreement, the Company
charged Chrysler $1 million in 1996, paid approximately $1 million in 1995 and
charged Chrysler $24 million in 1994.
Pursuant to an agreement between Chrysler and Chrysler Realty Corporation, the
Company received fees of $19 million in 1996, $22 million in 1995 and $22
million in 1994. The fees include charges for administrative services rendered
in the management of dealership land and facilities, reimbursement of holding
costs on vacant facilities, reimbursement of charges by the Company to dealer
tenants for rent in amounts less than the Company pays as rent on certain
leased facilities and for rent in amounts less than current market rent on
certain owned facilities.
The Company provides financing related to programs sponsored by Chrysler for
the sale and lease of Chrysler vehicles. Under these programs, interest rate
differentials received from Chrysler are earned on a level yield basis over
the term of the receivables, or if the related receivables are sold, unearned
amounts are included in the calculation of gains or losses from the sale of
retail receivables.
26
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 11 - Transactions with Affiliates (continued)
The Company provides secured financing to Chrysler in the normal course of
business. At December 31, 1996, $714 million was outstanding under these
agreements compared to $628 million at December 31, 1995. These amounts were
included in "Finance receivables - net" as "Retail."
In addition, the Company purchases trade receivables from Chrysler. The amount
of purchased receivables outstanding was $1.4 billion and $1.0 billion at
December 31, 1996 and 1995, respectively. These amounts were included in
"Finance receivables - net" as "Wholesale and other."
During 1996, the Company executed a $1.1 billion secured revolving loan
agreement with Chrysler Canada Ltd. ("CCL") to fund CCL's purchase of leased
vehicles. At December 31, 1996, $432 million was outstanding.
At December 31, 1996, Chrysler had short-term borrowings from the Company of
$433 million. At December 31, 1995, the Company had short-term borrowings from
Chrysler of $37 million and Chrysler had short-term borrowings from the
Company of $37 million.
Effective as of January 1, 1996, the Company contributed the shares of its
wholly owned subsidiary, Chrysler Comercial, S.A. de C.V. to Grupo Chrysler de
Mexico, S.A. de C.V. ("Grupo") in exchange for shares of Grupo. The noncash
exchange was recorded at historical cost resulting in an increase in "Other
assets" of approximately $59 million and a decrease in "Finance receivables -
net" of $278 million, "Debt" of $34 million, "Amounts due to affiliated
companies" of $167 million and "Deferred income taxes" of $13 million. The
Company has recorded its investment in Grupo under the cost method. Amounts
for prior years have not been restated for the transfer of ownership due to
immateriality.
In 1995, the Company and Chrysler entered into a support agreement in which
Chrysler will reimburse the Company for actual credit losses in Mexico up to a
specified amount. Reimbursement for credit losses will be recorded as a
reduction to the Company's investment.
Note 12 - Employee Benefit Plans
On December 31, 1995, the Company's pension plans were merged into similar
pension plans providing noncontributory and contributory benefits sponsored by
Chrysler, which cover substantially all of the employees of Chrysler Financial
Corporation and certain of its consolidated subsidiaries. The noncontributory
Chrysler Pension Plan provides benefits based on a fixed rate for each year of
service. Additionally, the contributory Chrysler Salaried Employees'
Retirement Plan provides benefits to salaried employees based on the
employee's cumulative contributions, years of service and employee's average
salary during the consecutive five years in which salary was highest in the 15
years preceding retirement. Net pension expense was $23 million in 1996, $24
million in 1995 (including $9 million in 1996 and $17 million in 1995 in
connection with voluntary early retirement programs offered in those years)
and $11 million in 1994.
The Company provides health and life insurance benefits to substantially all
of its U.S. and Canadian employees. Upon retirement from the Company,
employees may become eligible for continuation of these benefits. However,
benefits and eligibility rules may be modified periodically.
27
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 - Financial Instruments
Derivative Financial Instruments
The Company enters into derivative financial instruments with off-balance
sheet risk in the normal course of business to reduce the sensitivity of
earnings to various market risks. The Company's primary market risks include
fluctuations in interest rates, variability in spread relationships (Prime to
LIBOR spreads), mismatches of repricing intervals between finance receivables
and related funding obligations, and exchange variability in foreign debt
issuances. Derivative financial instruments, which consist primarily of
interest rate swaps, are utilized to reduce the exposure to market risks and
manage funding costs. The Company manages exposure to counterparty credit risk
by entering into derivative financial instruments with highly rated
institutions that can be expected to fully perform under the terms of such
agreements. Exposure to variability in foreign exchange rates is mitigated
through the use of currency exchange agreements on foreign debt. Notional
amounts are used to measure the volume of derivative financial instruments and
do not represent settlement exposure.
Interest Rate Derivative Financial Instruments
The Company's financing and investing activities are exposed to market risk
due to changes in interest rates. To minimize these effects, management has
entered into various derivative financial instruments. The objective of
entering into these transactions is to minimize the fluctuations in earnings
due to interest rate risk. The Company primarily uses interest rate swaps to
manage its interest rate risk under contractually binding agreements with a
counterparty.
The Company uses interest rate swap agreements to change the characteristics
of its fixed and variable rate exposures and to manage the Company's
asset/liability match. Interest rate basis swaps are used to manage
variability in spread relationships (Prime to LIBOR spreads). The Company's
interest rate swap portfolio is an integral element of its risk management
policy and as such, all swaps are specific to a financing or an obligation.
The off-balance sheet interest rate derivatives and related financial
instruments were as follows:
<TABLE>
<CAPTION>
Notional Amounts
Outstanding and
Weighted Average Rates
December 31,
Interest Rate Derivatives Variable Rate Maturing ----------------------
and Related Financial Instruments Indices Through 1996 1995
- --------------------------------- ------------- -------- ---- ----
(in millions of dollars)
<S> <C> <C> <C> <C>
Pay Fixed Interest Rate Swaps
Short-term notes 1998 $ 250 $ 250
Weighted avg. pay rate 9.08% 9.08%
Weighted avg. receive rate Money Market 5.59% 5.86%
Term notes 1998 $ 369 $ 74
Weighted avg. pay rate 5.44% 7.38%
Weighted avg. receive rate Bankers' Acceptance 4.41% 6.59%
Receive Fixed Interest Rate Swaps
Term notes 2002 $ 1,436 $ 750
Weighted avg. pay rate LIBOR 8.07% 7.54%
Weighted avg. receive rate 9.03% 8.27%
Variable Interest Rate Swaps
Term notes 1999 $ 1,611 $ 1,611
Weighted avg. pay rate LIBOR 5.51% 5.93%
Weighted avg. receive rate Fed Funds 5.62% 6.08%
------- -------
Total notional amounts outstanding $ 3,666 $ 2,685
======= =======
</TABLE>
28
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 - Financial Instruments (continued)
The impact of interest rate derivatives on interest expense was not material
in 1996, 1995 and 1994.
The Company enters into currency exchange agreements to manage its exposure
arising from fluctuating exchange rates related to specific funding
transactions. The Company hedges against borrowings denominated in currencies
other than the borrowers' local currency. The borrowings are translated in the
financial statements at the rates of exchange established under the related
currency exchange agreement. The reported amount of such currency borrowings
was $75 million and $330 million at December 31, 1996 and 1995, respectively.
If the Company had not entered into currency exchange agreements, the recorded
amount of debt would have been $22 million higher at December 31, 1996,and
$175 million higher at December 31, 1995.
The Company's portfolio of currency derivative financial instruments was as
follows:
<TABLE>
<CAPTION>
December 31, 1996
------------------------------
Currency Weighted Contract or Net
Derivative Financial Currency Average Notional Unrealized
Instrument Amount Maturity Interest Rate Amount Gain
- -------------------- -------- -------- ------------- ----------- ----------
(in millions) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Deutsche marks -
Fixed Rate
Senior Term Debt DM 150 1997 6.63% $ 75 $ 26
============ ============
<CAPTION>
December 31, 1995
------------------------------
Currency Weighted Contract or Net
Derivative Financial Currency Average Notional Unrealized
Instrument Amount Maturity Interest Rate Amount Gain
- -------------------- -------- -------- ------------- ----------- ----------
(in millions) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Deutsche marks -
Fixed Rate 1996-
Senior Term Debt DM 350 1997 6.69% $ 161 $ 97
Swiss francs -
Fixed Rate
Senior Term Debt SF 260 1996 5.52% 132 102
U.S. dollars (1)
Fixed Rate
Short-term Notes US$ 37 1996 5.99% 37 1
------------ ------------
Total $ 330 $ 200
============ ============
<FN>
(1) Amounts represent U.S. dollar funding for the Company's Canadian and Mexican operations.
</TABLE>
Fair Value of Financial Instruments
The estimated fair value amounts have been determined by the Company using
available market information and valuation methodologies as described below.
Considerable judgment is required in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions or valuation
methodologies may have a material effect on the estimated fair value amounts.
29
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 - Financial Instruments (continued)
The carrying amounts and estimated fair values of the Company's financial
instruments were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------------
1996 1995
------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- -------- -----
(in millions of dollars)
<S> <C> <C> <C> <C>
Balance Sheet financial instruments:
Marketable securities $ 472 $ 472 $ 674 $ 674
Finance receivables - net (1) $ 9,172 $ 9,167 $10,844 $10,824
Retained interests in sold
receivables - net $ 3,153 $ 3,120 $ 2,733 $ 2,757
Debt (2) $11,267 $11,410 $11,944 $12,229
Currency exchange agreements (3) $ 22 $ 26 $ 175 $ 200
<FN>
(1) The carrying value of finance receivables - net excludes approximately
$1,986 million and $1,800 million of leases classified as "Finance
receivables - net" in the Company's Consolidated Balance Sheet at December
31, 1996 and 1995, respectively. December 31, 1996 and 1995 data includes
approximately $4,702 million and $4,704 million, respectively of finance
receivables which reprice monthly at current market rates. The carrying
value approximates fair value.
(2) December 31, 1996 and 1995 data includes approximately $3,934 million and
$4,924 million, respectively, of short-term notes, term debt and other
borrowings which reprice at current market rates. The carrying amount and
fair value of debt includes the effect of the foreign currency exchange
agreements.
(3) The carrying amount is recorded in the balance sheet as a net reduction in
debt.
</TABLE>
The carrying value of cash and cash equivalents and accounts payable
approximates market value due to the short maturity of these instruments.
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------
1996 1995
------------------------ -----------------------
Contract or Unrealized Contract or Unrealized
Notional Gains Notional Gains
Amount (Losses) Amount (Losses)
----------- ---------- ----------- ----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Derivative financial instruments with
off-balance sheet risk:
Aggregate unrealized gain positions:
Interest rate swaps $1,246 $ 14 $ 750 $ 26
Aggregate unrealized loss positions:
Interest rate swaps 2,420 (22) 1,935 (33)
------ ------ ------ ------
Total $3,666 $ (8) $2,685 $ (7)
====== ====== ====== ======
</TABLE>
The methods and assumptions used to estimate the fair value of financial
instruments are summarized as follows:
Marketable Securities
The fair value of marketable securities was estimated using quoted market
prices.
30
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 - Financial Instruments (continued)
Finance Receivables - Net
The carrying value of variable rate finance receivables was assumed to
approximate fair value since they are priced at current market rates. The fair
value of fixed rate finance receivables was estimated by discounting expected
cash flows using rates at which loans of similar maturities would be made as
of December 31, 1996 and 1995, respectively.
Retained Interests in Sold Receivables - Net
The fair value of residual cash flows and other subordinated amounts due the
Company arising from receivable sale transactions was estimated by discounting
expected cash flows at current market rates.
Debt
The fair value of debt was estimated by discounting cash flows using rates
currently available for debt with similar terms and remaining maturities.
Interest Rate Swaps
The fair value of the Company's existing interest rate swaps was estimated by
discounting net cash flows using quoted market interest rates.
Currency Exchange Agreements
The fair value of currency exchange agreements was estimated by discounting
expected cash flows using market exchange rates and relative market interest
rates over the remaining term of the agreements.
The fair value estimates presented herein are based on pertinent information
available as of the date of the Consolidated Balance Sheet. Although
management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been revalued since the
date of the Consolidated Balance Sheet and, therefore, current estimates of
fair value may differ significantly from the amounts presented herein.
Note 14 - Revenues, Earnings and Assets by Business Segment and Geographical
Area
Revenues, earnings and assets of finance and insurance operations were as
follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Finance revenue and other revenues:
Finance operations $2,315 $2,266 $1,831
Insurance operations 166 173 164
------ ------ ------
Consolidated finance revenue and other revenues $2,481 $2,439 $1,995
====== ====== ======
Earnings before income taxes:
Finance operations $ 549 $ 492 $ 295
Insurance operations 37 30 20
------ ------ ------
Consolidated earnings before income taxes $ 586 $ 522 $ 315
====== ====== ======
</TABLE>
31
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 - Revenues, Earnings and Assets by Business Segment and Geographical
Area (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Assets:
Finance operations $17,098 $17,405 $16,274
Insurance operations 435 430 374
------- ------- -------
Consolidated assets $17,533 $17,835 $16,648
======= ======= =======
</TABLE>
Revenues, earnings and assets by geographical area were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Revenues:
United States $ 2,251 $ 2,154 $ 1,778
Canada 230 162 98
Mexico* -- 123 119
------- ------- -------
Consolidated revenues $ 2,481 $ 2,439 $ 1,995
======= ======= =======
Earnings before income taxes:
United States $ 530 $ 495 $ 278
Canada 56 37 26
Mexico* -- (10) 11
------- ------- -------
Consolidated earnings before income taxes $ 586 $ 522 $ 315
======= ======= =======
<CAPTION>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Assets:
United States $16,090 $16,753 $15,507
Canada 1,443 837 708
Mexico* -- 245 433
------- ------- -------
Consolidated assets $17,533 $17,835 $16,648
======= ======= =======
<FN>
*See Note 11.
</TABLE>
32
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 - Selected Quarterly Financial Data - Unaudited
Selected quarterly financial data for the years ended December 31, 1996 and
1995 were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1996
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(in millions of dollars)
<S> <C> <C> <C> <C>
Total finance revenue $434 $414 $410 $414
Interest expense $216 $211 $178 $192
Net margin and other revenues $376 $388 $397 $431
Provision for credit losses $ 67 $ 88 $ 92 $140
Provision for income taxes $ 56 $ 54 $ 50 $ 50
Net earnings $ 98 $101 $ 94 $ 83
<CAPTION>
Year Ended December 31, 1995
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(in millions of dollars)
<S> <C> <C> <C> <C>
Total finance revenue $383 $418 $381 $449
Interest expense $213 $247 $221 $229
Net margin and other revenues $341 $371 $352 $419
Provision for credit losses $ 88 $100 $ 68 $ 86
Provision for income taxes $ 40 $ 41 $ 51 $ 51
Net earnings $ 69 $ 86 $ 87 $ 97
</TABLE>
33
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
RESPONSIBILITY FOR FINANCIAL REPORTING
The Company's management is responsible for preparing the financial statements
and other financial information in this Annual Report. This responsibility
includes maintaining the integrity and objectivity of financial data and the
presentation of the Company's results of operations and financial position in
accordance with generally accepted accounting principles. The financial
statements include amounts that are based on management's best estimates and
judgements.
The Company's financial statements have been audited by Deloitte & Touche LLP,
independent auditors. Their audits were conducted in accordance with generally
accepted auditing standards and included consideration of the internal control
system and tests of transactions as part of planning and performing their
audits.
The Company maintains a system of internal controls throughout its operations
that provides reasonable assurance that its records reflect its transactions
in all material respects and that significant misuse or loss of assets will be
prevented. Management believes that the Company's system of internal controls
is adequate to accomplish these objectives on a continuous basis. The Company
maintains a strong internal auditing program that independently assesses the
effectiveness of the internal controls and recommends possible improvements.
Management has considered the internal auditors' and Deloitte & Touche LLP's
recommendations concerning the Company's system of internal controls and has
taken appropriate actions to respond to these recommendations.
The Board of Directors of Chrysler Corporation, acting through its Audit
Committee composed solely of nonemployee directors, is responsible for
determining that management fulfills its responsibilities in the preparation
of financial statements and the maintenance of internal controls. In
fulfilling its responsibility, the Audit Committee recommends independent
auditors to the Board of Directors for appointment by the shareholders of
Chrysler Corporation. The Audit Committee also reviews the Company's
consolidated financial statements and adequacy of internal controls. The Audit
Committee meets regularly with management, the internal auditors and the
independent auditors. Both the independent auditors and the internal auditors
have full and free access to the Audit Committee, without management
representatives present, to discuss the results of their audits and their
views on the adequacy of internal controls and the quality of financial
reporting.
It is the business philosophy of the Company to obey the law and to require
that its employees conduct their activities according to the highest standards
of business ethics. This responsibility is characterized and reflected in
various policies of the Company. A systematic program is maintained to assess
compliance with these policies.
/s/ Thomas W. Sidlik /s/ Thomas F. Gilman
- --------------------- -----------------------------
Thomas W. Sidlik Thomas F. Gilman
Chairman of the Board Vice President and Controller
34
<PAGE>
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35
<PAGE>
{Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
__________ __________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' REPORT
Shareholder and Board of Directors
Chrysler Financial Corporation
Southfield, Michigan
We have audited the accompanying consolidated balance sheet of Chrysler
Financial Corporation (a subsidiary of Chrysler Corporation) and consolidated
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of net earnings and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Chrysler Financial Corporation
and consolidated subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/ Deloitte & Touche LLP
January 21, 1997
______________________
Deloitte & Touche LLP
Tohmatsu
International
_____________
36
<PAGE>
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37
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There is nothing to report with regard to this Item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(Omitted in accordance with General Instruction J.)
ITEM 11. EXECUTIVE COMPENSATION
(Omitted in accordance with General Instruction J.)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(Omitted in accordance with General Instruction J.)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(Omitted in accordance with General Instruction J.)
38
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements
Financial statements filed as part of this Form 10-K are listed
under Part II, Item 8 of this Form 10-K.
2. Financial Statement Schedules
Independent Auditors' Report on Schedule (page 36 of Form 10-K)
Schedule II - Valuation and qualifying accounts and reserves (page
61 of Form 10-K)
Notes:
(A) Separate Company financial statements of Chrysler Financial
Corporation for the years ended December 31, 1995, 1994, and
1993 are omitted as not required under instructions contained
in Regulation S-X.
(B) Schedules other than those listed above have been omitted as
not required under instructions contained in Regulation S-X
or inapplicable.
Exhibits
3-A Copy of the Restated Articles of Incorporation of Chrysler
Financial Corporation as adopted and filed with the Corporation
Division of the 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-B Copies of 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-C Copies of 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-D Copies of 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, 1987, and incorporated herein by reference.
39
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
3-E Copies of 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 and June 23,
1989, respectively. Filed as Exhibit 3-E to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
June 30, 1989, and incorporated herein by reference.
3-F Copies of amendments to the Restated Articles of Incorporation of
Chrysler Financial Corporation filed with the Department of
Commerce of the State of Michigan on 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-G Copy of 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-H Copy of the By-Laws of Chrysler Financial Corporation as amended to
March 2, 1987. Filed as Exhibit 3-C to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1986, and incorporated herein by reference.
3-I Copy of the 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-J Copy of 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.
4-A Copy of Indenture, dated as of June 15, 1984, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company, as
Trustee, United States Trust Company of New York, as successor
Trustee, related to Senior Debt Securities of Chrysler Financial
Corporation. Filed as Exhibit (1) to the Current Report of Chrysler
Financial Corporation on Form 8-K, dated June 26, 1984, and
incorporated herein by reference.
4-B Copy of Supplemental Indenture, dated as of August 24, 1995,
between Chrysler Financial Corporation and the United States Trust
Company of New York, as Trustee, to the Indenture, dated as of June
15, 1984, related to Senior Debt Securities of Chrysler Financial
Corporation. Filed as Exhibit 4-K to the Current Report of Chrysler
Financial Corporation on Form 8-K, dated August 24, 1995, and
incorporated herein by reference.
4-C Copy of Indenture, dated as of September 15, 1986, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-E to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1986, and incorporated herein by reference.
40
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
4-D Copy of Amended and Restated Indenture, dated as of September 15,
1986, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as successor Trustee, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-H to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended June 30, 1987, and incorporated herein by
reference.
4-E Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-F Copy of First Supplemental Indenture, dated as of March 1, 1988,
between Chrysler Financial Corporation and Manufacturers Hanover
Trust Company, Trustee, United States Trust Company of New York, as
successor Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Senior Debt Securities. Filed as Exhibit 4-L to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1987, and incorporated herein by reference.
4-G Copy of Second Supplemental Indenture, dated as of September 7,
1990, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as successor Trustee, to the Indenture, dated as of February
15, 1988, between such parties, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-M to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended September 30, 1990, and incorporated herein by
reference.
4-H Copy of Third Supplemental Indenture, dated as of May 4, 1992,
between Chrysler Financial Corporation and United States Trust
Company of New York, as successor Trustee, to the Indenture, dated
as of February 15, 1988 between such parties, relating to Chrysler
Financial Corporation Senior Debt Securities. Filed as Exhibit 4-N
to the Quarterly Report of Chrysler Financial Corporation on Form
10-Q for the quarter ended June 30, 1992, and incorporated herein
by reference.
4-I Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and IBJ Schroder Bank & Trust Company,
Trustee, related to Chrysler Financial Corporation Subordinated
Debt Securities. Filed as Exhibit 4-B to Registration No. 33-23479
of Chrysler Financial Corporation, and incorporated herein by
reference.
4-J Copy of First Supplemental Indenture, dated as of September 1,
1989, between Chrysler Financial Corporation and IBJ Schroder Bank
& Trust Company, Trustee, to the Indenture, dated as of February
15, 1988, between such parties, related to Chrysler Financial
Corporation Subordinated Debt Securities. Filed on September 13,
1989 as Exhibit 4-N to the Current Report of Chrysler Financial
Corporation on Form 8-K dated September 1, 1989, and incorporated
herein by reference.
41
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
4-K Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-L Copy of First Supplemental Indenture, dated as of September 1,
1989, between Chrysler Financial Corporation and Irving Trust
Company, Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Junior Subordinated Debt Securities. Filed on September 13, 1989 as
Exhibit 4-O to the Current Report of Chrysler Financial Corporation
on Form 8-K dated September 1, 1989, and incorporated herein by
reference.
10-A Copy of Income Maintenance Agreement, made December 20, 1968, among
Chrysler Financial Corporation, Chrysler Corporation and Chrysler
Motors Corporation. Filed as Exhibit 13-D to Registration Statement
No. 2-32037 of Chrysler Financial Corporation, and incorporated
herein by reference.
10-B Copy of Agreement, made April 19, 1971, among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation,
amending the Income Maintenance Agreement among such parties. Filed
as Exhibit 13-B to Registration Statement No. 2-40110 of Chrysler
Financial Corporation and Chrysler Corporation, and incorporated
herein by reference.
10-C Copy of Agreement, made May 29, 1973, among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation,
further amending the Income Maintenance Agreement among such
parties. Filed as Exhibit 5-C to Registration Statement No. 2-49615
of Chrysler Financial Corporation, and incorporated herein by
reference.
10-D Copy of Agreement, made as of July 1, 1975, among Chrysler
Financial Corporation, Chrysler Corporation and Chrysler Motors
Corporation, further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit D to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1975, and incorporated herein by reference.
10-E Copy of Agreement, made June 4, 1976, between Chrysler Financial
Corporation and Chrysler Corporation further amending the Income
Maintenance Agreement between such parties. Filed as Exhibit 5-H to
Registration Statement No. 2-56398 of Chrysler Financial
Corporation, and incorporated herein by reference.
10-F Copy of Agreement, made March 27, 1986, between Chrysler Financial
Corporation, Chrysler Holding Corporation (now known as Chrysler
Corporation) and Chrysler Corporation (now known as Chrysler Motors
Corporation) further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit 10-F to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1986, and incorporated herein by reference.
42
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-G Copy of Short Term Revolving Credit Agreement, dated as of April
26, 1996, among Chrysler Financial Corporation, Chrysler Credit
Canada Ltd., the several commercial banks party thereto, as
Managing Agents, Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as Administrative Agent. Filed as Exhibit
10-G to the Quarterly Report of Chrysler Financial Corporation Form
10-Q for the quarter ended June 30, 1996, and incorporated herein
by reference.
10-H Copy of Long Term Revolving Credit Agreement, dated as of April 26,
1996, among Chrysler Financial Corporation, Chrysler Credit Canada
Ltd., the several commercial banks party thereto, as Managing
Agents, Royal Bank of Canada, as Canadian Administrative Agent, and
Chemical Bank, as Administrative Agent. Filed as Exhibit 10-H to
the Quarterly Report of Chrysler Financial Corporation Form 10-Q
for the quarter ended June 30, 1996, and incorporated herein by
reference.
10-I Copy of Sixth Amended and Restated Commitment Transfer Agreement,
dated as of April 26, 1996, among Chrysler Financial Corporation,
the several financial institutions parties thereto and Chemical
Bank, as Agent. Filed as Exhibit 10-I to the Quarterly Report of
Chrysler Financial Corporation Form 10-Q for the quarter ended June
30, 1996, and incorporated herein by reference.
10-J Copy of Amended and Restated Trust Agreement, dated as of April 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-K Copy of Indenture, dated as of April 1, 1993, between Premier Auto
Trust 1993-2 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.2 of the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-L Copy of Amended and Restated Trust Agreement, dated as of June 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-3. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-3 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-M Copy of Indenture, dated as of June 1, 1993, between Premier Auto
Trust 1993-3 and Bankers Trust Company, as Indenture Trustee.
Filed as Exhibit 4.2 to the Quarterly Report of Premier Auto Trust
1993-3 on Form 10-Q for the quarter ended June 30, 1993, and
incorporated herein by reference.
10-N Copy of Series 1993-1 Supplement, dated as of February 1, 1993,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1993-1. Filed as Exhibit 3 to the Trust's Registration
Statement on Form 8-A dated March 15, 1993, and incorporated herein
by reference.
43
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-O Copy of Receivables Purchase Agreement, made as of April 7, 1993,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Association Assets Acquisition Inc., with respect to CARS
1993-1. Filed as Exhibit 10-OOOO to the Quarterly Report on Form
10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-P Copy of Pooling and Servicing Agreement, dated as of August 1,
1993, among Auto Receivables Corporation, Chrysler Credit Canada
Ltd., Montreal Trust Company of Canada and Chrysler Financial
Corporation, with respect to CARCO 1993-1. Filed as Exhibit 10-QQQQ
to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-Q Copy of Standard Terms and Conditions of Agreement, dated as of
August 1, 1993, among Auto Receivables Corporation, Chrysler Credit
Canada Ltd. and Chrysler Financial Corporation, with respect to
CARCO 1993-1. Filed as Exhibit 10-RRRR to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-R Copy of Purchase Agreement, dated as of August 1, 1993, between
Chrysler Credit Canada Ltd. and Auto Receivables Corporation, with
respect to CARCO 1993-1. Filed as Exhibit 10-SSSS to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-S Copy of Amended and Restated Loan Agreement, dated as of June 1,
1993, between Chrysler Realty Corporation and Chrysler Credit
Corporation. Filed as Exhibit 10-XXXX to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-T Copy of Origination and Servicing Agreement, dated as of June 4,
1993, among Chrysler Leaserve, Inc., General Electric Capital Auto
Lease, Inc., Chrysler Credit Corporation and Chrysler Financial
Corporation. Filed as Exhibit 10-ZZZZ to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-U Copy of Amended and Restated Trust Agreement, dated as of September
1, 1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Trustee, with respect to
Premier Auto Trust 1993-5. Filed as Exhibit 4.1 to the Quarterly
Report of Premier Auto Trust 1993-5 on Form 10-Q for the quarter
ended September 30, 1993, and incorporated herein by reference.
10-V Copy of Indenture, dated as of September 1, 1993, between Premier
Auto Trust 1993-5 and Bankers Trust Company, as Indenture Trustee,
with respect to Premier Auto Trust 1993-5. Filed as Exhibit 4.2 to
the Quarterly Report of Premier Auto Trust 1993-5 on Form 10-Q for
the quarter ended September 30, 1993, and incorporated herein by
reference.
10-W Copy of Secured Loan Purchase Agreement, dated as of December 15,
1993, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-PPPP to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1993, and incorporated herein by reference.
44
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-X Copy of Series 1993-2 Supplement, dated as of November 1, 1993,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1993-2. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated December 6, 1993,
and incorporated herein by reference.
10-Y Copy of Amended and Restated Trust Agreement, dated as of November
1, 1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-6. Filed as Exhibit 4-A to the
Annual Report on Form 10-K of Premier Auto Trust 1993-6 for the
year ended December 31, 1993, and incorporated herein by reference.
10-Z Copy of Indenture, dated as of November 1, 1993, between Premier
Auto Trust 1993-6 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1993-6. Filed as
Exhibit 4-B to the Annual Report on Form 10-K of Premier Auto Trust
1993-6 for the year ended December 31, 1993, and incorporated
herein by reference.
10-AA Copy of Secured Loan Purchase Agreement, dated as of March 29,
1994, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-ZZZ to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended March 31, 1994, and incorporated herein by reference.
10-BB Copy of Amended and Restated Trust Agreement, dated as of February
1, 1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-1 for the
quarter ended March 31, 1994, and incorporated herein by reference.
10-CC Copy of Indenture, dated as of February 1, 1994, between Premier
Auto Trust 1994-1 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-1. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-1 for the quarter ended March 31, 1994, and incorporated
herein by reference.
10-DD Copy of Secured Loan Purchase Agreement, dated as of July 6, 1994,
among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-BBBB to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended June 30, 1994, and incorporated herein by reference.
10-EE Copy of Amended and Restated Trust Agreement, dated as of May 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-2 for the
quarter ended June 30, 1994, and incorporated herein by reference.
10-FF Copy of Indenture, dated as of May 1, 1994, between Premier Auto
Trust 1994-2 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-2. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-2 for the quarter ended June 30, 1994, and incorporated
herein by reference.
45
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-GG Copy of Amended and Restated Trust Agreement, dated as of June 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank, Delaware, with respect to Premier
Auto Trust 1994-3. Filed as Exhibit 4.1 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1994-3 for the quarter ended June
30, 1994, and incorporated herein by reference.
10-HH Copy of Indenture, dated as of June 1, 1994, between Premier Auto
Trust 1994-3 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-3. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-3 for the quarter ended June 30, 1994, and incorporated
herein by reference.
10-II Copy of Master Receivables Purchase Agreement among Chrysler Credit
Canada Ltd., CORE Trust and Chrysler Financial Corporation, dated
as of November 29, 1994. Filed as Exhibit 10-FFF to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1994, and incorporated herein by reference.
10-JJ Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 2,
1994, with respect to the sale of retail automotive receivables to
CORE Trust. Filed as Exhibit 10-GGG to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-KK Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 22,
1994, with respect to the sale of retail automotive receivables to
CORE Trust. Filed as Exhibit 10-HHH to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-LL Copy of Asset Purchase Agreement, dated as of December 14, 1994,
between Chrysler Capital Income Partners, L.P. and First Union
Commercial Corporation. Filed as Exhibit 10-III to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1994, and incorporated herein by reference.
10-MM Copy of Receivables Purchase Agreement, dated as of December 15,
1994, among Chrysler Financial Corporation, Premier Auto
Receivables Company and ABN AMRO Bank, N.V. as Agent, with respect
to the sale of retail automotive receivables to Windmill Funding
Corporation. Filed as Exhibit 10-JJJ to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-NN Copy of Series 1992-2 Supplement to the Pooling and Servicing
Agreement, dated as of October 1, 1992, among U.S. Auto Receivables
Company, as Seller, Chrysler Credit Corporation, as Servicer, and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust, Series 1992-2. Filed as Exhibit 3
to Form 8-A of CARCO Auto Loan Master Trust on October 30, 1992,
and incorporated herein by reference.
10-OO Copy of Master Custodial and Servicing Agreement, dated as of
September 1, 1992 between Chrysler Credit Canada Ltd. and The Royal
Trust Company, as Custodian. Filed as Exhibit 10-TTTTT to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
46
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-PP Copy of Series 1995-1 Supplement, dated as of September 20, 1995,
among Chrysler Credit Canada Ltd., The Royal Trust Company, Pure
Trust, Auto Receivables Corporation and Chrysler Financial
Corporation, to the Master Custodial and Servicing Agreement, dated
as of September 1, 1992. Filed as Exhibit 10-NNN to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1995, and incorporated herein by
reference.
10-QQ Copy of Trust Indenture, dated as of September 1, 1992, among
Canadian Dealer Receivables Corporation and Montreal Trust Company
of Canada, as Trustee. Filed as Exhibit 10-UUUUU to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
10-RR Copy of Servicing Agreement, dated as of October 20, 1992, between
Chrysler Leaserve, Inc. (a subsidiary of General Electric Capital
Auto Lease, Inc.) and Chrysler Credit Corporation, with respect to
the sale of Gold Key Leases. Filed as Exhibit 10-YYYYY to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
10-SS Copy of Amended and Restated Trust Agreement, dated as of August 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-TT Copy of Indenture, dated as of August 1, 1993, between Premier Auto
Trust 1993-4 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-UU Copy of Amended and Restated Trust Agreement, dated as of August 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-4. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-4 for the
quarter ended September 30, 1994, and incorporated herein by
reference.
10-VV Copy of Indenture, dated as of August 1, 1994, between Premier Auto
Trust 1994-4 and Bankers Trust Company, as Indenture Trustee. Filed
as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-4 for the quarter ended September 30, 1994, and
incorporated herein by reference.
10-WW Copy of Receivables Purchase Agreement, dated as of February 28,
1995, among Chrysler Financial Corporation, Premier Auto
Receivables Company and ABN AMRO Bank, N.V., with respect to the
sale of retail automotive receivables to Windmill Funding
Corporation. Filed as Exhibit 10-GGGG to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
March 31, 1995, and incorporated herein by reference.
47
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-XX Copy of Series 1994-1 Supplement, dated as of September 30, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1994-1. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated November 23, 1994,
and incorporated herein by reference.
10-YY Copy of Series 1994-2 Supplement, dated as of October 31, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust
1994-2. Filed as Exhibit 3 to the Registration Statement on Form
8-A of CARCO Auto Loan Master Trust dated December 22, 1994, and
incorporated herein by reference.
10-ZZ Copy of Series 1994-3 Supplement, dated as of November 30, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1994-3. Filed as Exhibit 4-W to the Annual Report on Form
10-K of CARCO Auto Loan Master Trust for the year ended December
31, 1994, and incorporated herein by reference.
10-AAA Copy of Series 1995-1 Supplement, dated as of December 31, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1995-1. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated January 19, 1995,
and incorporated herein by reference.
10-BBB Copy of Series 1995-2 Supplement, dated as of February 28, 1995,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust
1995-2. Filed as Exhibit 3 to CARCO Auto Loan Master Trust's
Registration Statement on Form 8-A dated March 27, 1995, and
incorporated herein by reference.
10-CCC Copy of Amended and Restated Trust Agreement, dated as of February
1, 1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995
of Premier Auto Trust 1995-1, and incorporated herein by reference.
10-DDD Copy of Indenture, dated as of February 1, 1995, between Premier
Auto Trust 1995-1 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1995-1. Filed as Exhibit 4.2 to
the Quarterly Report on Form 10-Q for the quarter ended March 31,
1995 of Premier Auto Trust 1995-1, and incorporated herein by
reference.
10-EEE Copy of Sale and Servicing Agreement, dated as of February 1, 1995,
among Premier Auto Trust 1995-1, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-1. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995 of Premier Auto Trust 1995-1,
and incorporated herein by reference.
48
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-FFF Copy of Amended and Restated Trust Agreement, dated as of April 1,
1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
of Premier Auto Trust 1995-2, and incorporated herein by reference.
10-GGG Copy of Indenture, dated as of April 1, 1995, between Premier Auto
Trust 1995-2 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1995-2. Filed as Exhibit 4.2 to the
Quarterly report on Form 10-Q for the quarter ended June 30, 1995
of Premier Auto Trust 1995-2, and incorporated herein by reference.
10-HHH Copy of Sale and Servicing Agreement, dated as of April 1, 1995,
among Premier Auto Trust 1995-2, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-2. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 of Premier Auto Trust 1995-2,
and incorporated herein by reference.
10-III Copy of Series 1995-3 Supplement, dated as of April 30, 1995, among
U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust 1995-3. Filed as Exhibit 4-Z to the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
of CARCO Auto Loan Master Trust, and incorporated herein by
reference.
10-JJJ Copy of Series 1995-4 Supplement, dated as of April 30, 1995, among
U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust Series 1995-4. Filed as Exhibit
4-AA to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 of CARCO Auto Loan Master Trust, and incorporated
herein by reference.
10-KKK Copy of Series 1995-4A Supplement, dated as of April 30, 1995,
among U.S. Auto Receivables Company, Chrysler Credit Corporation
and Manufacturers and Traders Trust Company, as Trustee, with
respect to CARCO Auto Loan Master Trust Series 1995-4A. Filed as
Exhibit 4-BB to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995 of CARCO Auto Loan Master Trust, and
incorporated herein by reference.
10-LLL Copy of Master Receivables Purchase Agreement, made as of July 24,
1995, among Chrysler Credit Canada Ltd., The Royal Trust Company
and Chrysler Financial Corporation, with respect to Pure Trust
1995-1. Filed as Exhibit 10-RRRR to the Quarterly Report on Form
10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1995, and incorporated herein by reference.
10-MMM Copy of Terms Schedule, dated as of July 24, 1995, among Chrysler
Credit Canada Ltd., The Royal Trust Company and Chrysler Financial
Corporation, with respect to Pure Trust 1995-1. Filed as Exhibit
10-SSSS to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1995, and
incorporated herein by reference.
49
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-NNN Copy of Receivables Purchase Agreement, dated as of December 14,
1995, among Chrysler Financial Corporation, Premier Auto
Receivables Company, Chrysler Credit Corporation, and ABN AMRO Bank
N.V., as Agent, with respect to the sale of retail automotive
receivables to Windmill Funding Corporation, Series 1995-2. Filed
as Exhibit 10-KKKK to the Annual Report on Form 10-K of Chrysler
Financial Corporation for the year ended December 31, 1995, and
incorporated herein by reference.
10-OOO Copy of Certificate of Trust of Premier Auto Trust 1995-3. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1995-3 for the quarter ended September 30, 1995, and
incorporated herein by reference.
10-PPP Copy of Amended and Restated Trust Agreement, dated as of July 1,
1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-3. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1995-3 for the
quarter ended September 30, 1995, and incorporated herein by
reference.
10-QQQ Copy of Indenture, dated as of July 1, 1995, between Premier Auto
Trust 1995-3 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1995-3. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1995-3 for the
quarter ended September 30, 1995, and incorporated herein by
reference.
10-RRR Copy of Sale and Servicing Agreement, dated as of July 1, 1995,
among Premier Auto Trust 1995-3, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-3. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1995-3 for the quarter ended September 30,
1995, and incorporated herein by reference.
10-SSS Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 14,
1995, with respect to CORE Trust 1995-1. Filed as Exhibit 10-PPPP
to the Annual Report of Chrysler Financial Corporation for the year
ended December 31, 1995, and incorporated herein by reference.
10-TTT Copy of Agreement and Plan of Merger, dated as of December 31,
1995, between Chrysler Financial Corporation and Chrysler Credit
Corporation, providing for the merger of these two corporations on
December 31, 1995, with Chrysler Financial Corporation being the
surviving corporation. Filed as Exhibit 10-QQQQ to the Annual
Report of Chrysler Financial Corporation for the year ended
December 31, 1995, and incorporated by reference.
10-UUU Copy of Amended and Restated Trust Agreement, dated as of November
1, 1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Receivables 1995-4. Filed as Exhibit 4.1 to
the Annual Report on Form 10-K of Premier Auto Trust 1995-4 for the
year ended December 31, 1995, and incorporated herein by reference.
10-VVV Copy of Certificate of Trust of Premier Auto Trust 1995-4. Filed as
Exhibit 3 to the Annual Report on Form 10-K of Premier Auto Trust
1995-4 for the year ended December 31, 1995, and incorporated
herein by reference.
50
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-WWW Copy of Indenture, dated as of November 1, 1995, between Premier
Auto Trust 1995-4 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1995-4. Filed as Exhibit 4.2 to
the Annual Report on Form 10-K of Premier Auto Trust 1995-4 for the
year ended December 31, 1995, and incorporated herein by reference.
10-XXX Copy of Sale and Servicing Agreement, dated as of November 1, 1995,
among Premier Auto Trust 1995-4, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-4. Filed as Exhibit 4.3 to the Annual Report on Form 10-K of
Premier Auto Trust 1995-4 for the year ended December 31, 1995, and
incorporated herein by reference.
10-YYY Copy of Receivables Purchase Agreement, dated as of May 30, 1996,
among Premier Auto Receivables Company, Chrysler Financial
Corporation, and ABN AMRO Bank, N.V., as Agent, with respect to the
sale of retail automotive receivables to Windmill Funding
Corporation, Series 1996-1. Filed as Exhibit 10-OOOO to the
Quarterly Report on Form 10-Q of Chrysler Financial Corporation for
the quarter ended June 30, 1996, and incorporated herein by
reference.
10-ZZZ Copy of Certificate of Trust of Premier Auto Trust 1996-1. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-1 for the quarter ended March 31, 1996, and incorporated
herein by reference.
10-AAAA Copy of Amended and Restated Trust Agreement, dated as of March 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-1 for the
quarter ended March 31, 1996, and incorporated herein by reference.
10-BBBB Copy of Indenture, dated as of March 1, 1996, between Premier Auto
Trust 1996-1 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-1.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-1 for the quarter ended March 31, 1996, and
incorporated herein by reference.
10-CCCC Copy of Sale and Servicing Agreement, dated as of March 1, 1996,
between Premier Auto Trust 1996-1 and Chrysler Financial
Corporation (excluding Schedules A and C), for Premier Auto Trust
1996-1. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1996-1 for the quarter ended March 31, 1996,
and incorporated by reference.
10-DDDD Copy of Receivables Sale Agreement, dated as of June 27, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Asset Securitization Cooperative Corporation and Canadian Imperial
Bank of Commerce, as Administrative Agent. Filed as Exhibit 10-TTTT
to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended June 30, 1996, and incorporated
herein by reference.
10-EEEE Copy of Asset Purchase Agreement, dated as of August 30, 1996,
between Chrysler First Business Credit Corporation and Berkeley
Federal Bank & Trust, F.S.B. Filed as Exhibit 10-IIII to the
Quarterly Report on Form 10-Q of Chrysler Financial Corporation for
the quarter ended September 30, 1996, and incorporated herein by
reference.
51
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-FFFF Copy of Asset Purchase Agreement, dated as of August 30, 1996,
between Chrysler First Business Credit Corporation and Blackrock
Capital Finance, L.P. Filed as Exhibit 10-JJJJ to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996, and
incorporated herein by reference.
10-GGGG Copy of Certificate of Trust of Premier Auto Trust 1996-2. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-2 for the quarter ended June 30, 1996, and incorporated
herein by reference.
10-HHHH Copy of Amended and Restated Trust Agreement, dated as of May 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation, and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-2 for the
quarter ended June 30, 1996, and incorporated herein by reference.
10-IIII Copy of Indenture, dated as of May 1, 1996, between Premier Auto
Trust 1996-2 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-2.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-2 for the quarter ended June 30, 1996, and
incorporated herein by reference.
10-JJJJ Copy of Sale and Servicing Agreement, dated as of May 1, 1996,
between Premier Auto Trust 1996-2 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to Premier
Auto Trust 1996-2. Filed as Exhibit 4.3 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1996-2 for the quarter ended June
30, 1996, and incorporated herein by reference.
10-KKKK Copy of Certificate of Trust of Premier Auto Trust 1996-3. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-3 for the quarter ended June 30, 1996, and incorporated
herein by reference.
10-LLLL Copy of Amended and Restated Trust Agreement, dated as of June 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation, and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-3. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-3 for the
quarter ended June 30, 1996, and incorporated herein by reference.
10-MMMM Copy of Indenture, dated as of June 1, 1996, between Premier Auto
Trust 1996-3 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-3.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-3 for the quarter ended June 30, 1996, and
incorporated herein by reference.
10-NNNN Copy of Sale and Servicing Agreement, dated as of June 1, 1996,
between Premier Auto Trust 1996-3 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to Premier
Auto Trust 1996-3. Filed as Exhibit 4.3 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1996-3 for the quarter ended June
30, 1996, and incorporated herein by reference.
10-OOOO Copy of Receivables Sale Agreement, dated as of November 25, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Asset Securitization Cooperative Corporation, and Canadian Imperial
Bank of Commerce, as Administrative Agent.
10-PPPP Copy of Certificate of Trust of Premier Auto Trust 1996-4. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-4 for the quarter ended September 30, 1996, and
incorporated herein by reference.
52
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
10-QQQQ Copy of Amended and Restated Trust Agreement, dated as of August 1,
1996, among Premier Receivables L.L.C., Chrysler Financial
Corporation, and Chase Manhattan Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1996-4. Filed as Exhibit 4.1 to
the Quarterly Report on Form 10-Q of Premier Auto Trust 1996-4 for
the quarter ended September 30, 1996, and incorporated herein by
reference.
10-RRRR Copy of Indenture, dated as of August 1, 1996, between Premier Auto
Trust 1996-4 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1996-4. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-4 for the
quarter ended September 30, 1996, and incorporated herein by
reference.
10-SSSS Copy of Sale and Servicing Agreement, dated as of August 1, 1996,
between Premier Auto Trust 1996-4 and Chrysler Financial
Corporation, with respect to Premier Auto Trust 1996-4. Filed as
Exhibit 4.3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-4 for the quarter ended September 30, 1996, and
incorporated herein by reference.
10-TTTT Copy of Receivables Sale Agreement, dated as of December 12, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Monte Rosa Capital Corporation, and Union Bank of Switzerland, New
York Branch, as Administrative Agent.
10-UUUU Copy of Receivables Sale Agreement, dated as of December 12, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Old Line Funding Corp., and Royal Bank of Canada, as Agent.
10-VVVV Copy of Receivables Sale Agreement, dated as of December 18, 1996,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation,
Canadian Master Trust, and Nesbitt Burns, Inc.
10-WWWW Copy of Loan Agreement, dated as of August 1, 1996, between
Chrysler Canada Ltd. and Chrysler Credit Canada Ltd., with respect
to Gold Key Leasing.
12-A Chrysler Financial Corporation and Subsidiaries Computations of
Ratios of Earnings to Fixed Charges.
12-B Chrysler Corporation Enterprise as a Whole Computations of Ratios
of Earnings to Fixed Charges and Preferred Stock Dividend
Requirements.
23 Consent of Deloitte & Touche LLP.
24 Power of Attorney, to which the signatures of directors of Chrysler
Financial Corporation have been affixed to this Annual Report on
Form 10-K.
27 Financial Data Schedule
Copies of instruments defining the rights of holders of long-term
debt of the registrant and its consolidated subsidiaries, other
than the instruments copies of which are filed with this report as
Exhibit 4-A, 4-B, 4-C, 4-D, 4-E, 4-F, 4-G, 4-H, 4-I, 4-J, 4-K,
4-L, 4-M, 4-N, 4-O, and 4-P thereto, have not been filed as
exhibits to this report since the amount of securities authorized
under any one of such instruments does not exceed 10% of the total
assets of the registrant and its subsidiaries on a consolidated
basis. The registration agrees to furnish to the Commission a copy
of each such instrument upon request.
53
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K -
continued
(b) The registrant filed the following reports on Form 8-K during the
quarter ended December 31, 1996:
Date of Report Date Filed Item Reported
-------------- ---------- -------------
December 6, 1996 December 9, 1996 5
Financial Statements Filed
--------------------------
None
54
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CHRYSLER FINANCIAL CORPORATION
By s/T. W. SIDLIK
---------------------
T. W. Sidlik
Chairman of the Board
Date: January 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Principal executive officer:
s/T. W. SIDLIK Chairman of the Board January 21, 1997
- -----------------------------
T. W. Sidlik
Principal financing officer:
s/D. M. CANTWELL Vice President and Treasurer January 21, 1997
- -----------------------------
D. M. Cantwell
Principal accounting officer:
s/T. F. GILMAN Vice President and Controller January 21, 1997
- -----------------------------
T. F. Gilman
55
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56
<PAGE>
SIGNATURES (CONTINUED)
Board of Directors:
THOMAS P. CAPO* Director January 21, 1997
Thomas P. Capo
DARRELL L. DAVIS* Director January 21, 1997
Darrell L. Davis
ROBERT J. EATON* Director January 21, 1997
Robert J. Eaton
ROBERT A. LUTZ* Director January 21, 1997
Robert A. Lutz
WILLIAM J. O'BRIEN III* Director January 21, 1997
William J. O'Brien III
T. W. SIDLIK* Director January 21, 1997
T. W. Sidlik
GARY C. VALADE* Director January 21, 1997
Gary C. Valade
*By s/B. C. BABBISH
----------------
B. C. Babbish
Attorney-in-Fact
January 21, 1997
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58
<PAGE>
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
__________ __________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' REPORT ON SCHEDULE
Shareholder and Board of Directors
Chrysler Financial Corporation
Southfield, Michigan
We have audited the consolidated financial statements of Chrysler Financial
Corporation (a subsidiary of Chrysler Corporation) and consolidated
subsidiaries as of December 31, 1996 and 1995, and for each of the three years
in the period ended December 31, 1996, and have issued our report thereon
dated January 21, 1997; such report is included elsewhere in this Form 10-K.
Our audits also included the financial statement schedule of Chrysler
Financial Corporation and consolidated subsidiaries, listed in Item 14. This
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
January 21, 1997
_____________________
Deloitte & Touche LLP
Tohmatsu
International
_____________
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60
<PAGE>
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in millions of dollars)
Column A Column B Column C Column D Column E
-------- ---------- -------- ----------- --------
Additions
------------------------
Charged to
Balance at Charged to Other Balance
Beginning Costs and Accounts- Deductions- at End
of Period Expenses Describe Describe of Period
---------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1996
Net reserve for insurance losses and
loss adjustment expenses $183 $ 96 $ -- $107(a) $172
YEAR ENDED DECEMBER 31, 1995
Net reserve for insurance losses and
loss adjustment expenses $181 $111 $ -- $109(a) $183
YEAR ENDED DECEMBER 31, 1994
Net reserve for insurance losses and
loss adjustment expenses $173 $109 $ -- $101(a) $181
<FN>
NOTES:
(a) Primarily reductions for claims settled
</TABLE>
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62
<PAGE>
EXHIBIT INDEX
3-A Copy of the Restated Articles of Incorporation of Chrysler
Financial Corporation as adopted and filed with the Corporation
Division of the 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-B Copies of 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-C Copies of 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-D Copies of 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, 1987, and incorporated herein by reference.
3-E Copies of 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 and June 23,
1989, respectively. Filed as Exhibit 3-E to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
June 30, 1989, and incorporated herein by reference.
3-F Copies of amendments to the Restated Articles of Incorporation of
Chrysler Financial Corporation filed with the Department of
Commerce of the State of Michigan on 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-G Copy of 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-H Copy of the By-Laws of Chrysler Financial Corporation as amended to
March 2, 1987. Filed as Exhibit 3-C to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1986, and incorporated herein by reference.
3-I Copy of the 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.
E-1
<PAGE>
EXHIBIT INDEX - continued
3-J Copy of 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.
4-A Copy of Indenture, dated as of June 15, 1984, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company, as
Trustee, United States Trust Company of New York, as successor
Trustee, related to Senior Debt Securities of Chrysler Financial
Corporation. Filed as Exhibit (1) to the Current Report of Chrysler
Financial Corporation on Form 8-K, dated June 26, 1984, and
incorporated herein by reference.
4-B Copy of Supplemental Indenture, dated as of August 24, 1995,
between Chrysler Financial Corporation and the United States Trust
Company of New York, as Trustee, to the Indenture, dated as of June
15, 1984, related to Senior Debt Securities of Chrysler Financial
Corporation. Filed as Exhibit 4-K to the Current Report of Chrysler
Financial Corporation on Form 8-K, dated August 24, 1995, and
incorporated herein by reference.
4-C Copy of Indenture, dated as of September 15, 1986, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-E to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1986, and incorporated herein by reference.
4-D Copy of Amended and Restated Indenture, dated as of September 15,
1986, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as successor Trustee, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-H to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended June 30, 1987, and incorporated herein by
reference.
4-E Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-F Copy of First Supplemental Indenture, dated as of March 1, 1988,
between Chrysler Financial Corporation and Manufacturers Hanover
Trust Company, Trustee, United States Trust Company of New York, as
successor Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Senior Debt Securities. Filed as Exhibit 4-L to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1987, and incorporated herein by reference.
4-G Copy of Second Supplemental Indenture, dated as of September 7,
1990, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as successor Trustee, to the Indenture, dated as of February
15, 1988, between such parties, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-M to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended September 30, 1990, and incorporated herein by
reference.
E-2
<PAGE>
EXHIBIT INDEX - continued
4-H Copy of Third Supplemental Indenture, dated as of May 4, 1992,
between Chrysler Financial Corporation and United States Trust
Company of New York, as successor Trustee, to the Indenture, dated
as of February 15, 1988 between such parties, relating to Chrysler
Financial Corporation Senior Debt Securities. Filed as Exhibit 4-N
to the Quarterly Report of Chrysler Financial Corporation on Form
10-Q for the quarter ended June 30, 1992, and incorporated herein
by reference.
4-I Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and IBJ Schroder Bank & Trust Company,
Trustee, related to Chrysler Financial Corporation Subordinated
Debt Securities. Filed as Exhibit 4-B to Registration No. 33-23479
of Chrysler Financial Corporation, and incorporated herein by
reference.
4-J Copy of First Supplemental Indenture, dated as of September 1,
1989, between Chrysler Financial Corporation and IBJ Schroder Bank
& Trust Company, Trustee, to the Indenture, dated as of February
15, 1988, between such parties, related to Chrysler Financial
Corporation Subordinated Debt Securities. Filed on September 13,
1989 as Exhibit 4-N to the Current Report of Chrysler Financial
Corporation on Form 8-K dated September 1, 1989, and incorporated
herein by reference.
4-K Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-L Copy of First Supplemental Indenture, dated as of September 1,
1989, between Chrysler Financial Corporation and Irving Trust
Company, Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Junior Subordinated Debt Securities. Filed on September 13, 1989 as
Exhibit 4-O to the Current Report of Chrysler Financial Corporation
on Form 8-K dated September 1, 1989, and incorporated herein by
reference.
10-A Copy of Income Maintenance Agreement, made December 20, 1968, among
Chrysler Financial Corporation, Chrysler Corporation and Chrysler
Motors Corporation. Filed as Exhibit 13-D to Registration Statement
No. 2-32037 of Chrysler Financial Corporation, and incorporated
herein by reference.
10-B Copy of Agreement, made April 19, 1971, among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation,
amending the Income Maintenance Agreement among such parties. Filed
as Exhibit 13-B to Registration Statement No. 2-40110 of Chrysler
Financial Corporation and Chrysler Corporation, and incorporated
herein by reference.
10-C Copy of Agreement, made May 29, 1973, among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation,
further amending the Income Maintenance Agreement among such
parties. Filed as Exhibit 5-C to Registration Statement No. 2-49615
of Chrysler Financial Corporation, and incorporated herein by
reference.
E-3
<PAGE>
EXHIBIT INDEX - continued
10-D Copy of Agreement, made as of July 1, 1975, among Chrysler
Financial Corporation, Chrysler Corporation and Chrysler Motors
Corporation, further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit D to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1975, and incorporated herein by reference.
10-E Copy of Agreement, made June 4, 1976, between Chrysler Financial
Corporation and Chrysler Corporation further amending the Income
Maintenance Agreement between such parties. Filed as Exhibit 5-H to
Registration Statement No. 2-56398 of Chrysler Financial
Corporation, and incorporated herein by reference.
10-F Copy of Agreement, made March 27, 1986, between Chrysler Financial
Corporation, Chrysler Holding Corporation (now known as Chrysler
Corporation) and Chrysler Corporation (now known as Chrysler Motors
Corporation) further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit 10-F to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1986, and incorporated herein by reference.
10-G Copy of Short Term Revolving Credit Agreement, dated as of April
26, 1996, among Chrysler Financial Corporation, Chrysler Credit
Canada Ltd., the several commercial banks party thereto, as
Managing Agents, Royal Bank of Canada, as Canadian Administrative
Agent, and Chemical Bank, as Administrative Agent. Filed as Exhibit
10-G to the Quarterly Report of Chrysler Financial Corporation Form
10-Q for the quarter ended June 30, 1996, and incorporated herein
by reference.
10-H Copy of Long Term Revolving Credit Agreement, dated as of April 26,
1996, among Chrysler Financial Corporation, Chrysler Credit Canada
Ltd., the several commercial banks party thereto, as Managing
Agents, Royal Bank of Canada, as Canadian Administrative Agent, and
Chemical Bank, as Administrative Agent. Filed as Exhibit 10-H to
the Quarterly Report of Chrysler Financial Corporation Form 10-Q
for the quarter ended June 30, 1996, and incorporated herein by
reference.
10-I Copy of Sixth Amended and Restated Commitment Transfer Agreement,
dated as of April 26, 1996, among Chrysler Financial Corporation,
the several financial institutions parties thereto and Chemical
Bank, as Agent. Filed as Exhibit 10-I to the Quarterly Report of
Chrysler Financial Corporation Form 10-Q for the quarter ended June
30, 1996, and incorporated herein by reference.
10-J Copy of Amended and Restated Trust Agreement, dated as of April 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-K Copy of Indenture, dated as of April 1, 1993, between Premier Auto
Trust 1993-2 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.2 of the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
E-4
<PAGE>
EXHIBIT INDEX - continued
10-L Copy of Amended and Restated Trust Agreement, dated as of June 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-3. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-3 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by
reference.
10-M Copy of Indenture, dated as of June 1, 1993, between Premier Auto
Trust 1993-3 and Bankers Trust Company, as Indenture Trustee.
Filed as Exhibit 4.2 to the Quarterly Report of Premier Auto Trust
1993-3 on Form 10-Q for the quarter ended June 30, 1993, and
incorporated herein by reference.
10-N Copy of Series 1993-1 Supplement, dated as of February 1, 1993,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1993-1. Filed as Exhibit 3 to the Trust's Registration
Statement on Form 8-A dated March 15, 1993, and
incorporated herein by reference.
10-O Copy of Receivables Purchase Agreement, made as of April 7, 1993,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Association Assets Acquisition Inc., with respect to CARS
1993-1. Filed as Exhibit 10-OOOO to the Quarterly Report on Form
10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by
reference.
10-P Copy of Pooling and Servicing Agreement, dated as of August 1,
1993, among Auto Receivables Corporation, Chrysler Credit Canada
Ltd., Montreal Trust Company of Canada and Chrysler Financial
Corporation, with respect to CARCO 1993-1. Filed as Exhibit 10-QQQQ
to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-Q Copy of Standard Terms and Conditions of Agreement, dated as of
August 1, 1993, among Auto Receivables Corporation, Chrysler Credit
Canada Ltd. and Chrysler Financial Corporation, with respect to
CARCO 1993-1. Filed as Exhibit 10-RRRR to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein
by reference.
10-R Copy of Purchase Agreement, dated as of August 1, 1993, between
Chrysler Credit Canada Ltd. and Auto Receivables Corporation, with
respect to CARCO 1993-1. Filed as Exhibit 10-SSSS to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-S Copy of Amended and Restated Loan Agreement, dated as of June 1,
1993, between Chrysler Realty Corporation and Chrysler Credit
Corporation. Filed as Exhibit 10-XXXX to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-T Copy of Origination and Servicing Agreement, dated as of June 4,
1993, among Chrysler Leaserve, Inc., General Electric Capital Auto
Lease, Inc., Chrysler Credit Corporation and Chrysler Financial
Corporation. Filed as Exhibit 10-ZZZZ to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
E-5
<PAGE>
EXHIBIT INDEX - continued
10-U Copy of Amended and Restated Trust Agreement, dated as of September
1, 1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Trustee, with respect to
Premier Auto Trust 1993-5. Filed as Exhibit 4.1 to the Quarterly
Report of Premier Auto Trust 1993-5 on Form 10-Q for the quarter
ended September 30, 1993, and incorporated herein by reference.
10-V Copy of Indenture, dated as of September 1, 1993, between Premier
Auto Trust 1993-5 and Bankers Trust Company, as Indenture Trustee,
with respect to Premier Auto Trust 1993-5. Filed as Exhibit 4.2 to
the Quarterly Report of Premier Auto Trust 1993-5 on Form 10-Q for
the quarter ended September 30, 1993, and incorporated herein by
reference.
10-W Copy of Secured Loan Purchase Agreement, dated as of December 15,
1993, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-PPPP to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1993, and incorporated herein by reference.
10-X Copy of Series 1993-2 Supplement, dated as of November 1, 1993,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1993-2. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated December 6, 1993,
and incorporated herein by reference.
10-Y Copy of Amended and Restated Trust Agreement, dated as of November
1, 1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-6. Filed as Exhibit 4-A to the
Annual Report on Form 10-K of Premier Auto Trust 1993-6 for the
year ended December 31, 1993, and incorporated herein by reference.
10-Z Copy of Indenture, dated as of November 1, 1993, between Premier
Auto Trust 1993-6 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1993-6. Filed as
Exhibit 4-B to the Annual Report on Form 10-K of Premier Auto Trust
1993-6 for the year ended December 31, 1993, and incorporated
herein by reference.
10-AA Copy of Secured Loan Purchase Agreement, dated as of March 29,
1994, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-ZZZ to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended March 31, 1994, and incorporated herein by reference.
10-BB Copy of Amended and Restated Trust Agreement, dated as of February
1, 1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-1 for the
quarter ended March 31, 1994, and incorporated herein by reference.
10-CC Copy of Indenture, dated as of February 1, 1994, between Premier
Auto Trust 1994-1 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-1. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-1 for the quarter ended March 31, 1994, and incorporated
herein by reference.
E-6
<PAGE>
EXHIBIT INDEX - continued
10-DD Copy of Secured Loan Purchase Agreement, dated as of July 6, 1994,
among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-BBBB to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended June 30, 1994, and incorporated herein by reference.
10-EE Copy of Amended and Restated Trust Agreement, dated as of May 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-2 for the
quarter ended June 30, 1994, and incorporated herein by
reference.
10-FF Copy of Indenture, dated as of May 1, 1994, between Premier Auto
Trust 1994-2 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-2. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-2 for the quarter ended June 30, 1994, and incorporated
herein by reference.
10-GG Copy of Amended and Restated Trust Agreement, dated as of June 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank, Delaware, with respect to Premier
Auto Trust 1994-3. Filed as Exhibit 4.1 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1994-3 for the quarter ended June
30, 1994, and incorporated herein by reference.
10-HH Copy of Indenture, dated as of June 1, 1994, between Premier Auto
Trust 1994-3 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-3. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-3 for the quarter ended June 30, 1994, and incorporated
herein by reference.
10-II Copy of Master Receivables Purchase Agreement among Chrysler Credit
Canada Ltd., CORE Trust and Chrysler Financial Corporation, dated
as of November 29, 1994. Filed as Exhibit 10-FFF to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1994, and incorporated herein by reference.
10-JJ Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 2,
1994, with respect to the sale of retail automotive receivables to
CORE Trust. Filed as Exhibit 10-GGG to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-KK Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 22,
1994, with respect to the sale of retail automotive receivables to
CORE Trust. Filed as Exhibit 10-HHH to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-LL Copy of Asset Purchase Agreement, dated as of December 14, 1994,
between Chrysler Capital Income Partners, L.P. and First Union
Commercial Corporation. Filed as Exhibit 10-III to the Annual
Report on Form 10-K of Chrysler Financial Corporation for the year
ended December 31, 1994, and incorporated herein by reference.
E-7
<PAGE>
EXHIBIT INDEX - continued
10-MM Copy of Receivables Purchase Agreement, dated as of December 15,
1994, among Chrysler Financial Corporation, Premier Auto
Receivables Company and ABN AMRO Bank, N.V. as Agent, with respect
to the sale of retail automotive receivables to Windmill Funding
Corporation. Filed as Exhibit 10-JJJ to the Annual Report on Form
10-K of Chrysler Financial Corporation for the year ended December
31, 1994, and incorporated herein by reference.
10-NN Copy of Series 1992-2 Supplement to the Pooling and Servicing
Agreement, dated as of October 1, 1992, among U.S. Auto Receivables
Company, as Seller, Chrysler Credit Corporation, as Servicer, and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust, Series 1992-2. Filed as Exhibit 3
to Form 8-A of CARCO Auto Loan Master Trust on October 30, 1992,
and incorporated herein by reference.
10-OO Copy of Master Custodial and Servicing Agreement, dated as of
September 1, 1992 between Chrysler Credit Canada Ltd. and The Royal
Trust Company, as Custodian. Filed as Exhibit 10-TTTTT to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
10-PP Copy of Series 1995-1 Supplement, dated as of September 20, 1995,
among Chrysler Credit Canada Ltd., The Royal Trust Company, Pure
Trust, Auto Receivables Corporation and Chrysler Financial
Corporation, to the Master Custodial and Servicing Agreement, dated
as of September 1, 1992. Filed as Exhibit 10-NNN to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1995, and incorporated herein by
reference.
10-QQ Copy of Trust Indenture, dated as of September 1, 1992, among
Canadian Dealer Receivables Corporation and Montreal Trust Company
of Canada, as Trustee. Filed as Exhibit 10-UUUUU to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
10-RR Copy of Servicing Agreement, dated as of October 20, 1992, between
Chrysler Leaserve, Inc. (a subsidiary of General Electric Capital
Auto Lease, Inc.) and Chrysler Credit Corporation, with respect to
the sale of Gold Key Leases. Filed as Exhibit 10-YYYYY to the
Registration Statement on Form S-2 of Chrysler Financial
Corporation (Registration Statement No. 33-51302) on November 24,
1992, and incorporated herein by reference.
10-SS Copy of Amended and Restated Trust Agreement, dated as of August 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-TT Copy of Indenture, dated as of August 1, 1993, between Premier Auto
Trust 1993-4 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
E-8
<PAGE>
EXHIBIT INDEX - continued
10-UU Copy of Amended and Restated Trust Agreement, dated as of August 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1994-4. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-4 for the
quarter ended September 30, 1994, and incorporated herein by
reference.
10-VV Copy of Indenture, dated as of August 1, 1994, between Premier Auto
Trust 1994-4 and Bankers Trust Company, as Indenture Trustee. Filed
as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1994-4 for the quarter ended September 30, 1994, and
incorporated herein by reference.
10-WW Copy of Receivables Purchase Agreement, dated as of February 28,
1995, among Chrysler Financial Corporation, Premier Auto
Receivables Company and ABN AMRO Bank, N.V., with respect to the
sale of retail automotive receivables to Windmill Funding
Corporation. Filed as Exhibit 10-GGGG to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
March 31, 1995, and incorporated herein by reference.
10-XX Copy of Series 1994-1 Supplement, dated as of September 30, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1994-1. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated November 23, 1994,
and incorporated herein by reference.
10-YY Copy of Series 1994-2 Supplement, dated as of October 31, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust
1994-2. Filed as Exhibit 3 to the Registration Statement on Form
8-A of CARCO Auto Loan Master Trust dated December 22, 1994, and
incorporated herein by reference.
10-ZZ Copy of Series 1994-3 Supplement, dated as of November 30, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1994-3. Filed as Exhibit 4-W to the Annual Report on Form
10-K of CARCO Auto Loan Master Trust for the year ended December
31, 1994, and incorporated herein by reference.
10-AAA Copy of Series 1995-1 Supplement, dated as of December 31, 1994,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust,
Series 1995-1. Filed as Exhibit 3 to the Registration Statement on
Form 8-A of CARCO Auto Loan Master Trust dated January 19, 1995,
and incorporated herein by reference.
10-BBB Copy of Series 1995-2 Supplement, dated as of February 28, 1995,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to CARCO Auto Loan Master Trust
1995-2. Filed as Exhibit 3 to CARCO Auto Loan Master Trust's
Registration Statement on Form 8-A dated March 27,
1995, and incorporated herein by reference.
E-9
<PAGE>
EXHIBIT INDEX - continued
10-CCC Copy of Amended and Restated Trust Agreement, dated as of February
1, 1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995
of Premier Auto Trust 1995-1, and incorporated herein by reference.
10-DDD Copy of Indenture, dated as of February 1, 1995, between Premier
Auto Trust 1995-1 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1995-1. Filed as Exhibit 4.2 to
the Quarterly Report on Form 10-Q for the quarter ended March 31,
1995 of Premier Auto Trust 1995-1, and incorporated herein by
reference.
10-EEE Copy of Sale and Servicing Agreement, dated as of February 1, 1995,
among Premier Auto Trust 1995-1, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-1. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995 of Premier Auto Trust 1995-1,
and incorporated herein by reference.
10-FFF Copy of Amended and Restated Trust Agreement, dated as of April 1,
1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
of Premier Auto Trust 1995-2, and incorporated herein by reference.
10-GGG Copy of Indenture, dated as of April 1, 1995, between Premier Auto
Trust 1995-2 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1995-2. Filed as Exhibit 4.2 to the
Quarterly report on Form 10-Q for the quarter ended June 30, 1995
of Premier Auto Trust 1995-2, and incorporated herein by reference.
10-HHH Copy of Sale and Servicing Agreement, dated as of April 1, 1995,
among Premier Auto Trust 1995-2, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-2. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 of Premier Auto Trust 1995-2,
and incorporated herein by reference.
10-III Copy of Series 1995-3 Supplement, dated as of April 30, 1995, among
U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust 1995-3. Filed as Exhibit 4-Z to the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
of CARCO Auto Loan Master Trust, and
incorporated herein by reference.
10-JJJ Copy of Series 1995-4 Supplement, dated as of April 30, 1995, among
U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, with respect
to CARCO Auto Loan Master Trust Series 1995-4. Filed as Exhibit
4-AA to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 of CARCO Auto Loan Master Trust, and
incorporated herein by reference.
10-KKK Copy of Series 1995-4A Supplement, dated as of April 30, 1995,
among U.S. Auto Receivables Company, Chrysler Credit Corporation
and Manufacturers and Traders Trust Company, as Trustee, with
respect to CARCO Auto Loan Master Trust Series 1995-4A. Filed as
Exhibit 4-BB to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995 of CARCO Auto Loan Master Trust, and
incorporated herein by reference.
E-10
<PAGE>
EXHIBIT INDEX - continued
10-LLL Copy of Master Receivables Purchase Agreement, made as of July 24,
1995, among Chrysler Credit Canada Ltd., The Royal Trust Company
and Chrysler Financial Corporation, with respect to Pure Trust
1995-1. Filed as Exhibit 10-RRRR to the Quarterly Report on Form
10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1995, and incorporated herein by reference.
10-MMM Copy of Terms Schedule, dated as of July 24, 1995, among Chrysler
Credit Canada Ltd., The Royal Trust Company and Chrysler Financial
Corporation, with respect to Pure Trust 1995-1. Filed as Exhibit
10-SSSS to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1995, and
incorporated herein by reference.
10-NNN Copy of Receivables Purchase Agreement, dated as of December 14,
1995, among Chrysler Financial Corporation, Premier Auto
Receivables Company, Chrysler Credit Corporation, and ABN AMRO Bank
N.V., as Agent, with respect to the sale of retail automotive
receivables to Windmill Funding Corporation, Series 1995-2. Filed
as Exhibit 10-KKKK to the Annual Report on Form 10-K of Chrysler
Financial Corporation for the year ended December 31, 1995, and
incorporated herein by reference.
10-OOO Copy of Certificate of Trust of Premier Auto Trust 1995-3. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1995-3 for the quarter ended September 30, 1995, and
incorporated herein by reference.
10-PPP Copy of Amended and Restated Trust Agreement, dated as of July 1,
1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1995-3. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1995-3 for the
quarter ended September 30, 1995, and incorporated
herein by reference.
10-QQQ Copy of Indenture, dated as of July 1, 1995, between Premier Auto
Trust 1995-3 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1995-3. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1995-3 for the
quarter ended September 30, 1995, and incorporated herein by
reference.
10-RRR Copy of Sale and Servicing Agreement, dated as of July 1, 1995,
among Premier Auto Trust 1995-3, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-3. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1995-3 for the quarter ended September 30,
1995, and incorporated herein by reference.
10-SSS Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE
Trust and Chrysler Financial Corporation, dated as of December 14,
1995, with respect to CORE Trust 1995-1. Filed as Exhibit 10-PPPP
to the Annual Report of Chrysler Financial Corporation for the year
ended December 31, 1995, and incorporated herein by reference.
10-TTT Copy of Agreement and Plan of Merger, dated as of December 31,
1995, between Chrysler Financial Corporation and Chrysler Credit
Corporation, providing for the merger of these two corporations on
December 31, 1995, with Chrysler Financial Corporation being the
surviving corporation. Filed as Exhibit 10-QQQQ to the Annual
Report of Chrysler Financial Corporation for the year ended
December 31, 1995, and incorporated by reference.
E-11
<PAGE>
EXHIBIT INDEX - continued
10-UUU Copy of Amended and Restated Trust Agreement, dated as of November
1, 1995, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Receivables 1995-4. Filed as Exhibit 4.1 to
the Annual Report on Form 10-K of Premier Auto Trust 1995-4 for the
year ended December 31, 1995, and incorporated herein by reference.
10-VVV Copy of Certificate of Trust of Premier Auto Trust 1995-4. Filed as
Exhibit 3 to the Annual Report on Form 10-K of Premier Auto Trust
1995-4 for the year ended December 31, 1995, and incorporated
herein by reference.
10-WWW Copy of Indenture, dated as of November 1, 1995, between Premier
Auto Trust 1995-4 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1995-4. Filed as Exhibit 4.2 to
the Annual Report on Form 10-K of Premier Auto Trust 1995-4 for the
year ended December 31, 1995, and incorporated herein by reference.
10-XXX Copy of Sale and Servicing Agreement, dated as of November 1, 1995,
among Premier Auto Trust 1995-4, Chrysler Credit Corporation and
Chrysler Financial Corporation, with respect to Premier Auto Trust
1995-4. Filed as Exhibit 4.3 to the Annual Report on Form 10-K of
Premier Auto Trust 1995-4 for the year ended December 31, 1995, and
incorporated herein by reference.
10-YYY Copy of Receivables Purchase Agreement, dated as of May 30, 1996,
among Premier Auto Receivables Company, Chrysler Financial
Corporation, and ABN AMRO Bank, N.V., as Agent, with respect to the
sale of retail automotive receivables to Windmill Funding
Corporation, Series 1996-1. Filed as Exhibit 10-OOOO to the
Quarterly Report on Form 10-Q of Chrysler Financial Corporation for
the quarter ended June 30, 1996, and incorporated herein by
reference.
10-ZZZ Copy of Certificate of Trust of Premier Auto Trust 1996-1. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-1 for the quarter ended March 31, 1996, and incorporated
herein by reference.
10-AAAA Copy of Amended and Restated Trust Agreement, dated as of March 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-1. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-1 for the
quarter ended March 31, 1996, and incorporated herein by reference.
10-BBBB Copy of Indenture, dated as of March 1, 1996, between Premier Auto
Trust 1996-1 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-1.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-1 for the quarter ended March 31, 1996, and
incorporated herein by reference.
10-CCCC Copy of Sale and Servicing Agreement, dated as of March 1, 1996,
between Premier Auto Trust 1996-1 and Chrysler Financial
Corporation (excluding Schedules A and C), for Premier Auto Trust
1996-1. Filed as Exhibit 4.3 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1996-1 for the quarter ended March 31, 1996,
and incorporated by reference.
E-12
<PAGE>
EXHIBIT INDEX - continued
10-DDDD Copy of Receivables Sale Agreement, dated as of June 27, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Asset Securitization Cooperative Corporation and Canadian Imperial
Bank of Commerce, as Administrative Agent. Filed as Exhibit 10-TTTT
to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended June 30,
1996, and incorporated herein by reference.
10-EEEE Copy of Asset Purchase Agreement, dated as of August 30, 1996,
between Chrysler First Business Credit Corporation and Berkeley
Federal Bank & Trust, F.S.B. Filed as Exhibit 10-IIII to the
Quarterly Report on Form 10-Q of Chrysler Financial Corporation for
the quarter ended September 30, 1996, and incorporated herein by
reference.
10-FFFF Copy of Asset Purchase Agreement, dated as of August 30, 1996,
between Chrysler First Business Credit Corporation and Blackrock
Capital Finance, L.P. Filed as Exhibit 10-JJJJ to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996, and
incorporated herein by reference.
10-GGGG Copy of Certificate of Trust of Premier Auto Trust 1996-2. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-2 for the quarter ended June 30, 1996, and incorporated
herein by reference.
10-HHHH Copy of Amended and Restated Trust Agreement, dated as of May 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation, and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-2. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-2 for the
quarter ended June 30, 1996, and incorporated
herein by reference.
10-IIII Copy of Indenture, dated as of May 1, 1996, between Premier Auto
Trust 1996-2 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-2.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-2 for the quarter ended June 30, 1996, and
incorporated herein by reference.
10-JJJJ Copy of Sale and Servicing Agreement, dated as of May 1, 1996,
between Premier Auto Trust 1996-2 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to Premier
Auto Trust 1996-2. Filed as Exhibit 4.3 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1996-2 for the quarter ended June
30, 1996, and incorporated herein by reference.
10-KKKK Copy of Certificate of Trust of Premier Auto Trust 1996-3. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-3 for the quarter ended June 30, 1996, and incorporated
herein by reference.
10-LLLL Copy of Amended and Restated Trust Agreement, dated as of June 1,
1996, among Premier Auto Receivables Company, Chrysler Financial
Corporation, and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1996-3. Filed as Exhibit 4.1 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-3 for the
quarter ended June 30, 1996, and incorporated herein by reference.
10-MMMM Copy of Indenture, dated as of June 1, 1996, between Premier Auto
Trust 1996-3 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust 1996-3.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1996-3 for the quarter ended June 30, 1996, and
incorporated herein by reference.
E-13
<PAGE>
EXHIBIT INDEX - continued
10-NNNN Copy of Sale and Servicing Agreement, dated as of June 1, 1996,
between Premier Auto Trust 1996-3 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to Premier
Auto Trust 1996-3. Filed as Exhibit 4.3 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1996-3 for the quarter ended June
30, 1996, and incorporated herein by reference.
10-OOOO Copy of Receivables Sale Agreement, dated as of November 25, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Asset Securitization Cooperative Corporation, and Canadian Imperial
Bank of Commerce, as Administrative Agent.
10-PPPP Copy of Certificate of Trust of Premier Auto Trust 1996-4. Filed as
Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-4 for the quarter ended September 30, 1996, and
incorporated herein by reference.
10-QQQQ Copy of Amended and Restated Trust Agreement, dated as of August 1,
1996, among Premier Receivables L.L.C., Chrysler Financial
Corporation, and Chase Manhattan Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1996-4. Filed as Exhibit 4.1 to
the Quarterly Report on Form 10-Q of Premier Auto Trust 1996-4 for
the quarter ended September 30, 1996, and incorporated herein by
reference.
10-RRRR Copy of Indenture, dated as of August 1, 1996, between Premier Auto
Trust 1996-4 and The Bank of New York, as Indenture Trustee, with
respect to Premier Auto Trust 1996-4. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1996-4 for the
quarter ended September 30, 1996, and incorporated herein by
reference.
10-SSSS Copy of Sale and Servicing Agreement, dated as of August 1, 1996,
between Premier Auto Trust 1996-4 and Chrysler Financial
Corporation, with respect to Premier Auto Trust 1996-4. Filed as
Exhibit 4.3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1996-4 for the quarter ended September 30, 1996, and
incorporated herein by reference.
10-TTTT Copy of Receivables Sale Agreement, dated as of December 12, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Monte Rosa Capital Corporation, and Union Bank of Switzerland, New
York Branch, as Administrative Agent.
10-UUUU Copy of Receivables Sale Agreement, dated as of December 12, 1996,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Old Line Funding Corp., and Royal Bank of Canada, as Agent.
10-VVVV Copy of Receivables Sale Agreement, dated as of December 18, 1996,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation,
Canadian Master Trust, and Nesbitt Burns, Inc.
10-WWWW Copy of Loan Agreement, dated as of August 1, 1996, between
Chrysler Canada Ltd. and Chrysler Credit Canada Ltd., with respect
to Gold Key Leasing.
12-A Chrysler Financial Corporation and Subsidiaries Computations of
Ratios of Earnings to Fixed Charges.
12-B Chrysler Corporation Enterprise as a Whole Computations of Ratios
of Earnings to Fixed Charges and Preferred Stock Dividend
Requirements.
E-14
<PAGE>
EXHIBIT INDEX - continued
23 Consent of Deloitte & Touche LLP.
24 Power of Attorney, to which the signatures of directors of Chrysler
Financial Corporation have been affixed to this Annual Report on
Form 10-K.
27 Financial Data Schedule
E-15
Exhibit 10.OOOO
RECEIVABLES SALE AGREEMENT
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
ASSET SECURITIZATION COOPERATIVE CORPORATION
as Purchaser
and
CANADIAN IMPERIAL BANK OF COMMERCE
as Administrative Agent
Dated as of November 25, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I: DEFINITIONS....................................................1
ARTICLE II: THE SALE AND PURCHASE........................................12
ARTICLE III: FEES AND EXPENSES...........................................14
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE ............................16
ARTICLE V: SETTLEMENT PROCEDURES.........................................18
ARTICLE VI: SERVICING OF RECEIVABLES.....................................19
ARTICLE VII: REPRESENTATIONS AND WARRANTIES..............................24
ARTICLE VIII: COVENANTS..................................................26
ARTICLE IX: INDEMNIFICATIONS; INCREASED COSTS............................30
ARTICLE X: ADMINISTRATIVE AGENT .........................................34
ARTICLE XI: MISCELLANEOUS................................................35
EXHIBITS
EXHIBIT A -- Form of Servicer Report
EXHIBIT B -- Form of Opinion of Counsel
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RECEIVABLES SALE AGREEMENT dated as of November 25, 1996 among
PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as the
"Seller", CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer", ASSET SECURITIZATION COOPERATIVE CORPORATION, as the
"Purchaser" and CANADIAN IMPERIAL BANK OF COMMERCE, as the "Administrative
Agent" for the Purchaser.
ARTICLE I: DEFINITIONS
"Administrative Agent" means Canadian Imperial Bank of Commerce
and any replacement thereof under Section 10.1.1.
"Adverse Claim" means any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (consensual,
statutory or other), charge, security arrangement, negative pledge or any
other encumbrance or other right or claim in, of or on any Person's assets or
properties in favor of any other Person, of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic
effect as any of the foregoing).
"Affiliate" means any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
another Person or a subsidiary of such other Person. A Person shall be deemed
to control another Person if the controlling Person owns five percent (5%) or
more of any class of voting securities (or, if such controlled Person is not a
corporation, five percent (5%) or more of any equity interest) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock or other equity interest, by contract or
otherwise. Neither CIBC nor ASCC shall constitute an "Affiliate" of the
Seller.
"Agreement" means this Receivables Sale Agreement, as it may be
amended from time to time.
"Aggregate Principal Balance" means, at any time, the aggregate
Principal Balance of all Purchased Receivables at such time.
"Bankruptcy Code" means the Bankruptcy Reform Act of
1978 (11 U.S.C. ss.ss. 101 et seq.), as amended.
"Balloon Payment" means, for any Receivable, the principal
component of any payment (including any balloon payments under the "Gold Key
Plus Program") which is not a level
<PAGE>
monthly payment (other than the first or last payment made on the Receivable
which is minimally different from the other level payments).
"Business Day" means any day on which banks are not authorized
or required to close in New York City.
"Carrying Costs" means, for each Settlement Period, an
amount equal to the sum of:
(i) (PD + PP + OEF) x DSP x AI
---
360
plus
(ii) SF x DSP x APB
---
360
where PD = Purchase Discount
PP = Purchase Premium
OEF = Operating Expense Fee
SF = Servicer Fee
DSP = the number of days in such
Settlement Period
AI = the average daily Purchaser's
Investment for such Settlement
Period
APB = the Aggregate Principal Balance
as of the first day of such
Settlement Period.
"Carrying Costs True-up Amount" has the meaning assigned to
such term in Section 3.1.1(b).
"Certificate of Title" means any certificate, instrument or
other document issued by a state or other governmental authority in respect of
any truck, tractor, trailer, automobile or other motor vehicle for the purpose
of evidencing the ownership of, or any Adverse Claim in or against, such motor
vehicle.
"CFC" means, Chrysler Financial Corporation, a Michigan
corporation.
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"Code" means the Internal Revenue Code of 1986, as
amended.
"Collection" means any amount paid by an Obligor or any other
party with respect to a Purchased Receivable, including Liquidation Proceeds
and Recoveries.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices, or other writings pursuant to which such
Receivable arises or which evidence such Receivable.
"Credit and Collection Policy" means the credit and collection
policies and practices of the Servicer relating to Receivables and Contracts.
"Credit Facilities" means each of the committed loan
facilities, lines of credit, letters of credit and other forms of credit
enhancement available to the Purchaser which are not Liquidity Facilities.
"Cut-Off Date" means November 21, 1996.
"Dealer" means an automobile or light-duty truck dealership
located within the United States at or through which a Financed Vehicle shall
have been purchased or is proposed to be purchased.
"Delinquency Ratio" means, as of the last calendar day of any
month, a fraction, expressed as a percentage, the numerator of which is the
sum of the Principal Balances of all Receivables which were Delinquent
Receivables as of the last calendar day of such month and the last calendar
day of each of the two immediately preceding months, and the denominator of
which is the sum of the Aggregate Principal Balance on such last calendar day
of such month and on the last calendar day of each of the two immediately
preceding months, provided, that, for purposes of determining the Delinquency
Ratio for (a) the month of December 1996, the foregoing calculation shall be
made using only data for the month of December 1996 and (b) the month of
January 1997, the foregoing calculation shall be made using only data for the
months of December 1996 and January 1997.
"Delinquent Receivable" means any Receivable which has 10% or
more of a scheduled payment past due for more than 60 days.
"Eligible Receivable" means, as of the Cut-Off Date,
any Receivable:
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(i) the Obligor of which (a) is a resident of the
United States and (b) is not an Affiliate of the originating
Dealer or any of the parties hereto,
(ii) the Obligor of which (a) is not the Obligor of any
Receivable which has 10% or more of a scheduled payment past due for
more than 30 days and (b) is not the subject of any bankruptcy,
insolvency or reorganization proceeding or any other proceeding
seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial
part of its property,
(iii) which is an account receivable representing all or part
of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended,
(iv) a purchase of which with the proceeds of notes would
constitute a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended,
(v) which is "chattel paper" within the meaning of
Section 9-105 of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United
States dollars in the United States,
(vii) which (a) has been originated in the United States by a
Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business and (b) satisfies all applicable
requirements of the Credit and Collection Policy,
(viii) which arises under a Contract which, together with such
Receivable, is (1) in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor, enforceable
against such Obligor in accordance with its terms, and (2) subject to
no dispute, offset, counterclaim or other defense, and (c) with
respect to which (1) no default, breach, violation, or event
permitting acceleration under the terms thereof has occurred and (2)
there has not arisen any condition that, with notice or lapse of time
or both, would constitute a default, breach, violation or event
permitting acceleration under the terms thereof,
(ix) which, together with the related Contract, (a) is
secured by a perfected, valid, subsisting and enforceable
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<PAGE>
first priority security interest in favor of the Servicer in the
related Financed Vehicle, (b) contains customary and enforceable
provisions such that the rights and remedies of the holder of such
security interest are adequate for realization against the collateral
of the benefits of the security, and (c) was originated and
transferred to the Seller without any conduct constituting fraud or
misrepresentation on the part of the applicable Dealer, CFC or the
Seller,
(x) which, together with the related Contract, immediately
following the execution of such Contract, was purchased by (and the
originating Dealer has validly assigned all of its right, title and
interest therein to) CFC, which, in turn, has sold such Receivable to
the Seller, and such purchase and assignment of such Receivable, such
Contract and the Related Security to CFC is expressly contemplated in
such Contract,
(xi) which arises under a Contract which (a) does not require
the Obligor under such Contract to consent to or receive notice of the
transfer, sale or assignment of the Receivable, such Contract or the
Related Security and (b) does not contain a confidentiality provision
that purports to restrict the ability of the Administrative Agent or
the Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
(xii) which, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating
to usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no part of the Contract related
thereto is in violation of any such law, rule or regulation,
(xiii) the Financed Vehicle securing which (a) is free and
clear of any Adverse Claim other than the security interest therein
then being assigned by the Seller to the Administrative Agent for the
benefit of the Purchaser, and no enforcement action, whether by
repossession or otherwise, has been taken with respect to such
Financed Vehicle or any other Financed Vehicle at any time owned by
such Obligor, and (b) is covered by the Required Insurance in respect
of such Financed Vehicle, and such Required Insurance is in full force
and effect, has been assigned to the Seller and is fully assignable to
the Administrative Agent, for the benefit of the Purchaser,
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<PAGE>
(xiv) as to which the Administrative Agent has not notified the
Seller that such Receivable or class of Receivables is not acceptable
as an Eligible Receivable, including, without limitation, because such
Receivable arises under a Contract that is not acceptable,
(xv) with respect to which the Seller has good and marketable
title, free and clear of any Adverse Claim, and in which, following
the purchase of an ownership interest therein hereunder, the Purchaser
shall have an undivided first priority ownership interest therein,
free and clear of any Adverse Claim,
(xvi) with respect to the Outstanding Balance thereof, (a) the
related Contract requires that payment in full of such Outstanding
Balance is scheduled to be made (1) not earlier than 5 months after,
and not later than 72 months after, the date such Receivable was
originated, and (2) not later than 60 months after the date any
interest therein is purportedly transferred to the Purchaser hereunder
and (b) such Outstanding Balance is scheduled to be paid in equal
consecutive monthly installments, unless such Receivable arises under
the Gold Key Plus Program,
(xvii) which Receivable bears interest at the per annum rate
stated on the face of the related Contract, which per annum rate
remains fixed during the term of such Receivable and accrued interest
on such Receivable is payable monthly, in arrears,
(xviii) other than in accordance with the Credit and Collection
Policy, the Contract with respect to such Receivable has not been
amended, waived, altered or modified in any respect since the date of
the sale of the applicable Financed Vehicle,
(xix) each of CFC, the Seller and the applicable Dealer with
respect to such Receivable have duly fulfilled all obligations on its
part to be fulfilled under, or in connection with, the related
Contract and such Person has done nothing to impair the rights of the
Administrative Agent or the Purchaser in such Contract or the proceeds
thereof,
(xx) with respect to such Receivable, there is only one
original executed Contract, which will, together with the related
records, be conveyed hereunder by the Seller to the Purchaser and,
pursuant to this Agreement, will be held by the Servicer as bailee of
the Administrative Agent and
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<PAGE>
the Purchaser, and no other custodial agreements are in
effect with respect thereto, and
(xxi) the applicable Dealer with respect thereto shall have
been solvent at the time of, and immediately after giving effect to,
the transfer of such Receivable to the CFC.
"ERISA" means the Employee Retirement Income Security Act of
1974 and the rules and regulations thereunder, as amended from time to time.
"Facility Limit" means $500,000,000.
"Finance Charges" means, with respect to any Receivable and its
related Contract, any finance, interest or similar charges owing by an Obligor
pursuant to such Contract, including, without limitation, any charge payable
in connection with any extension or adjustment under such Contract (without
regard to whether any such extension or adjustment is permitted under the
terms of this Agreement).
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the applicable Contract.
"Fixed Value Payment" means the dollar amount of the final
Balloon Payment under a Receivable which was created under the Gold Key Plus
Program.
"Gold Key Plus Program" means a retail installment sale program
offered by CFC to Obligors which the final payment is a Balloon Payment that
may be made by the Obligor by (1) payment in full in cash of the Fixed Value
Payment, (2) return of the Financed Vehicle to the Servicer in lieu of paying
the Fixed Value Payment in cash provided that certain conditions are satisfied
or (3) refinancing the Fixed Value Payment in accordance with certain
conditions.
"Hedging Proceeds" means any amount payable by CFC to the
Administrative Agent under the Swap Confirmation.
"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
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<PAGE>
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.
"Insurance Policy" means (i) any comprehensive and collision,
fire, theft or other insurance policy maintained by an Obligor with respect to
one or more Financed Vehicles, and (ii) any credit, life or disability
insurance maintained by an Obligor in connection with any Contract.
"Investment" means the aggregate amount of cash paid by the
Purchaser to the Seller for the Purchase, less the amount of all Collections
received and applied as reductions of Investment pursuant to Article V.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer whether through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the monies collected in respect thereof, from whatever source on a
Liquidated Receivable during the month 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.
"Liquidity Facilities" means each of the committed loan
facilities, lines of credit and other financial accommodations available to
the Purchaser to support the liquidity of the Purchaser's commercial paper
notes and medium term notes.
"Moody's" means Moody's Investors Service, Inc.
"Net Loss" for a month means the sum of the Aggregate Principal
Balance of all Purchased Receivables which are deemed to be uncollectible for
such month, minus any Liquidation Proceeds and Recoveries received during such
month, plus any
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<PAGE>
losses resulting from disposition expenses paid during such
month.
"Net Loss Ratio" means, as of the last day of any month, a
fraction, expressed as an annualized percentage, the numerator of which is the
product of (i) the sum of the Net Loss for such month and the two immediately
preceding months and (ii) a factor of 4, and the denominator of which is the
average of the Aggregate Principal Balance on the first day of such calendar
month and the first day of the two immediately preceding months, provided,
that, for purposes of determining the Net Loss Ratio (a) for the month of
December 1996, the numerator shall be the product of (i) the Net Loss for the
month of December 1996 and (ii) a factor of 12, and the denominator shall be
the Aggregate Principal Balance on the first day of December 1996 and (b) for
the month of January 1997, the numerator shall be the product of (i) the sum
of the Net Loss for December 1996 and Janaury 1997 and (ii) a factor of 6, and
the denominator shall be the average of the Aggregate Principal Balance on the
first day of December 1996 and the first day of January 1997.
"Obligor" means any Person which is obligated to make
payment on a Receivable.
"Operating Expense Fee" means the percentage used to determine
the fee payable by the Seller to the Purchaser, as described in Section 3.1.3.
"Person" means any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Principal Balance" means with respect to any Receivable the
outstanding principal balance thereof determined in accordance with the Credit
and Collection Policy and the Servicer's customary calculation methods,
provided, that with respect to a Receivable identified as a "Fixed Value
Receivable," the "Principal Balance" shall not include the Fixed Value
Payment.
"Purchase" has the meaning assigned to that term in
Section 2.1.
"Purchase Date" means the date on which the conditions
precedent to the Purchase described in Section 4.1 have been satisfied or
waived.
"Purchase Discount" has the meaning assigned to that
term in Section 3.1.1.
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"Purchase Premium" has the meaning assigned to that
term in Section 3.1.2.
"Purchased Receivable" means an Eligible Receivable arising
under a Contract listed on the Schedule of Contracts delivered to the
Administrative Agent prior to the Purchase Date.
"Purchaser" means Asset Securitization Cooperative
Corporation and its successors and assigns.
"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 the indebtedness and other obligations of an
Obligor arising under a Contract, whether such indebtedness or other
obligations constitute accounts, chattel paper, instruments or general
intangibles, and including, without limitation, the obligation to pay any
Finance Charges with respect thereto.
"Receivables Files" means the documents specified in
Section 6.3.
"Recoveries" means, with respect to any Receivable that becomes
a Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any month following the month 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.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed Vehicle, the
financing of the purchase of which gave rise to such Receivable,
including, without limitation, all of the Seller's right, title and
interest in and to the Insurance Policies with respect thereto, and
all warranties, indemnities, service obligations and other contract
rights issued or granted by, or otherwise existing under applicable
law against, the manufacturer or Dealer in respect of such Financed
Vehicle,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of
such Receivable, whether pursuant to the Contract related to such
Receivable, or otherwise,
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together with all financing statements signed by an Obligor describing
any collateral securing such Receivable, and including, without
limitation, all security interests or liens, and property subject
thereto, granted by any Person (whether or not the primary Obligor on
such Receivable) under or in connection therewith,
(iii) all guaranties, powers of attorney, indemnities,
warranties, letters of credit and proceeds thereof and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable, whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all of the Seller's right, title and interest in, to and
under any instrument, document or agreement relating to the transfer
of such Receivable by the applicable Dealer to CFC and, in turn, by
CFC to the Seller, and all claims against such Dealer or CFC arising
from or in connection with the purported transfer of such Receivable
to CFC and, in turn, to the Seller,
(v) all books, records and other information relating to such
Receivable, including, without limitation, all Contracts, computer
programs, tapes, discs, punch cards, data processing software and
related rights and property (but excluding any proprietary software
and related programs of the Servicer and the Seller),
(vi) all service contracts and other contracts and
agreements relating to such Receivable, and
(vii) all proceeds of any of the foregoing.
"Required Insurance" means an Insurance Policy with respect to
a Financed Vehicle (i) that has been issued by an insurance company acceptable
to the Administrative Agent or by a government-sponsored insurance company,
assigned risk pool or joint underwriting association located within or
organized under the auspices of a single state in the United States and
otherwise acceptable to the Administrative Agent, (ii) that provides
comprehensive collision, fire, theft and other physical damage coverage, (iii)
that is in an amount not less than the market value of the applicable Financed
Vehicle and (iv) that is fully assignable to Persons having a security
interest in the Financed Vehicle.
"Reserve" means an amount equal to 7.0% of the
Investment as of the Purchase Date.
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"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
"Sale Documents" means this Agreement, the Exhibits hereto to
which the Seller is a party and all other certificates, instruments,
agreements and documents executed from time to time by the Seller in
connection with the transactions contemplated in this Agreement.
"Schedule of Contracts" means the Microfiche containing a list
of Contracts delivered to the Administrative Agent.
"Seller" means Premier Receivables L.L.C., a Michigan limited
liability company, and its successors and permitted assigns.
"Servicer" means CFC or any replacement thereof under
Article VI.
"Servicer Default" has the meaning assigned to that
term in Section 6.2.
"Servicer Fee" means the percentage used to determine the fee
payable by the Purchaser to the Servicer as described in Section 3.1.4.
"Servicer Report" means the report in the form of Exhibit A
hereto to be provided by the Servicer in accordance with Section 5.3 of this
Agreement, which report shall include the Delinquency Ratio and the Net Loss
Ratio for the applicable month.
"Settlement Date" means the 20th day of each calendar month (or
if such 20th day is not a Business Day, the next succeeding Business Day).
"Settlement Period" means a calendar month.
"Swap Confirmation" means the Swap Confirmation dated as of
November 25, 1996 executed pursuant to the Interest Rate Swap Agreement dated
as of December 10, 1987 between Canadian Imperial Bank of Commerce and CFC, as
such agreement may be amended, supplemented or replaced from time to time.
ARTICLE II: THE SALE AND PURCHASE
SECTION 2.1. Purchase. Upon the terms and subject to
the conditions set forth herein, effective as of the Purchase
Date, (i) the Seller hereby sells, transfers and assigns to the
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Purchaser all of the Seller's right, title and interest to and in the
Purchased Receivables, together with the Related Security and Collections from
and after the Cut-Off Date relating to such Purchased Receivables, (ii) the
Purchaser hereby purchases and accepts the transfer and assignment of all of
the Seller's right, title and interest to and in the Purchased Receivables,
together with the Related Security and Collections relating to such Purchased
Receivables (the foregoing sale, transfer and assignment being referred to as
the "Purchase"), and (iii) the Purchaser hereby, without any further action
hereunder, does sell, transfer, assign, set over and otherwise convey to the
Seller, effective as of the Purchase Date, without recourse, representation or
warranty of any kind, all right, title and interest of the Purchaser in and to
the Fixed Value Payments, all monies due and to become due and all amounts
received with respect thereto and all proceeds thereof.
SECTION 2.2. Purchase Price. The purchase price payable by the
Purchaser for the Purchase shall equal the Aggregate Principal Balance as of
the Cut-Off Date. Such purchase price shall be comprised of a cash component
and a deferred payment component. The cash component of the purchase price
shall be paid by the Purchaser to the Seller on the Purchase Date and shall
equal the aggregate Principal Balance of the Purchased Receivables as of the
Cut-Off Date minus the Reserve calculated as of such Purchase Date. Upon and
after the reduction of the Investment to zero and the payment in full of all
other amounts due to the Purchaser hereunder, all Collections or other cash
received by the Purchaser on account of Receivables and the interest of the
Purchaser therein and all Receivables held by or on behalf of the Purchaser
will be transmitted in the form received by the Purchaser to the Seller. The
transmission of such amount by the Purchaser shall be deemed to satisfy the
payment of the deferred payment component of the purchase price under this
Section 2.2.
SECTION 2.3. Seller's Optional Termination. The Seller shall
have the right, on five (5) Business Days' written notice to the
Administrative Agent, at any time following the reduction of the Aggregate
Principal Balance to a level that is less than ten percent (10%) of the
Aggregate Principal Balance on the Purchase Date, to repurchase from the
Purchaser all, and not part, of the then outstanding Purchased Receivables,
together with the Related Security and Collections relating to such Purchased
Receivables. The purchase price in respect thereof shall be an amount equal to
the Investment outstanding at such time plus all other amounts payable
(whether due or accrued) hereunder or under any other Sale Document to the
Purchaser or the Administrative Agent at such time. Such repurchase shall be
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without representation, warranty or recourse of any kind by, on the part of or
against the Purchaser or the Administrative Agent.
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. The following
rates shall be utilized in calculating the amount of Carrying Costs to be
distributed each Settlement Period out of Collections of Purchased
Receivables:
SECTION 3.1.1. Purchase Discount. (a) A Purchase
Discount equal to the weighted average of the following:
(i) the weighted average of the discount rates on all
commercial paper notes issued at a discount during the related Settlement
Period (other than commercial paper notes the proceeds of which are used by
the Purchaser to (x) purchase receivables, or extend financing secured
thereby, at a fixed interest rate or (y) conduct any arbitrage activities of
the Purchaser), converted to an annual yield-equivalent rate on the basis of a
360-day year;
(ii) the weighted average of the annual interest rates payable
on all interest-bearing commercial paper notes issued during the related
Settlement Period (other than the commercial paper notes described in clauses
(x) and (y) of paragraph (i) above), on the basis of a 360-day year; and
(iii) the weighted average of the annual interest rates
applicable to any Liquidity Facilities under which the Purchaser has borrowed
loans during the related Settlement Period (which loans shall be borrowed only
after a determination by the Purchaser that financing its activities during
such period by issuing commercial paper notes would not be practicable or
cost-efficient;
provided that, to the extent that the Investment is funded by a specific
issuance of commercial paper notes and/or by a specific borrowing under a
Liquidity Facility or a Credit Facility, the Purchase Discount shall equal the
rate or weighted average of the rates applicable to such issuance or
borrowing, provided, further, that, for purposes of the foregoing, the
interest rates applicable under any Liquidity Facility shall not exceed the
reserved adjusted "LIBO Rate" quoted by the Administrative Agent plus 0.25%
per annum and the interest rates under any Credit Facility shall not exceed
the rate of interest per annum published on such day (or, if not then
published, on the most recently preceding day) in The Wall Street Journal as
the "Prime Rate" plus 2.0% per annum.
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(b) Two calendar days prior to the end of each calendar month
(or if such day is not a Business Day, the immediately preceding Business
Day), the Administrative Agent shall determine the Purchase Discount pursuant
to (a) above by using the actual Purchase Discount for each day elapsed in
such month and estimating the Purchase Discount for each remaining day in such
month. In addition, the Administrative Agent shall concurrently notify the
Servicer of the actual Purchase Discount for any days during the immediately
preceding Settlement Period with respect to which the Purchase Discount was
estimated, and the difference, if any, between the Carrying Costs actually
paid using the estimated Purchase Discount and the Carrying Costs which would
have been paid had the actual Purchase Discount been available (such
differential being the "Carrying Costs True-up Amount"). If the amount of
Carrying Costs paid for such immediately preceding Settlement Period based
upon an estimated Purchase Discount was less than the amount of Carrying Costs
for such Settlement Period based upon the actual Purchase Discount, the amount
of Collections remitted to the Administrative Agent pursuant to Section 5.2(i)
shall be increased by an amount equal to the Carrying Costs True-up Amount,
or, if the amount of Carrying Costs paid for such immediately preceding
Settlement Period based upon an estimated Purchase Discount was greater than
the amount of Carrying Costs for such Settlement Period based upon the actual
Purchase Discount, the amount of Collections remitted to the Administrative
Agent pursuant to Section 5.2(i) shall be decreased by an amount equal to the
Carrying Costs True-up Amount.
SECTION 3.1.2. Purchase Premium. A Purchase Premium
equal to 0.18% per annum.
SECTION 3.1.3. Operating Expense Fee. An Operating Expense Fee
to cover routine operating expenses of the Purchaser incurred during the
immediately preceding Settlement Period, including fees payable to commercial
paper dealers, issuing and paying agents, rating agencies, printers and
auditors. The Operating Expense Fee shall equal 0.06% per annum; provided that
(i) the Operating Expense Fee in respect of commercial paper dealer
commissions shall not exceed a rate per annum equal to 0.05% and (ii) the
Operating Expense Fee in respect of issuing and paying agent fees, rating
agency fees, printing and all other routine operating expenses shall not
exceed a rate per annum equal to 0.01%. If the amount of any Operating Expense
Fee paid for any Settlement Period exceeds the actual amount of the operating
costs and expenses of the Purchaser incurred during such period, then the
Purchaser will annually remit the excess to the Seller (it being understood
that the determination and allocation of such excess shall be determined based
upon the
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average daily Investment outstanding hereunder and the average daily
investment of the Purchaser under receivables purchase facilities with other
sellers).
SECTION 3.1.4. Servicer Fee. A Servicer Fee equal to 1.0% per
annum, which fee shall be remitted by the Purchaser to the Servicer. If CFC is
acting as the Servicer, then the Servicer shall retain an amount equal to the
Servicer Fee (in full satisfaction of the payment of such fee to the Servicer)
out of amounts required to be remitted by the Servicer in accordance with
Section 5.2.
SECTION 3.2. Interest on Unpaid Amounts. To the extent that the
Seller or Servicer fails to pay when due to the Purchaser or the
Administrative Agent any fee, expense or other amount payable hereunder or
under any Sale Document, interest shall be due and payable on such unpaid
amount, for each day until paid in full, at the rate of one percent in excess
of the rate of interest per annum published on such day (or, if not then
published, on the most recently preceding day) in The Wall Street Journal as
the "Prime Rate". Changes in the rate payable hereunder shall be effective on
each date on which a change in the "Prime Rate" is published.
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4.1. Conditions Precedent to Purchase. The
following conditions must be satisfied before the Purchaser will
make the Purchase:
SECTION 4.1.1 Absence of Liens. The Administrative Agent will
have received evidence acceptable to it (including Uniform Commercial Code
search reports) that all Purchased Receivables, Related Security and all
proceeds thereof are free and clear of any Adverse Claim.
SECTION 4.1.2. Financing Statements. The Administrative Agent
will have received acknowledgment copies of UCC-1 financing statements, and
all other documents reasonably requested by the Administrative Agent, to
evidence the perfection of the Purchaser's interest in the Purchased
Receivables, the Related Security and the Collections.
SECTION 4.1.3. Schedule of Contracts. The
Administrative Agent will have received the Schedule of
Contracts.
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SECTION 4.1.4. Seller Resolutions. The Administrative
Agent will have received a certificate of the Seller's secretary
or assistant secretary attesting to:
(a) the resolutions of the majority interest of the Seller's
members (or an executive committee thereof) authorizing the execution by the
Seller of the Sale Documents to be executed by the Seller;
(b) the names and signatures of the officers of the
Seller authorized to execute the Sale Documents to be executed by
the Seller; and
(c) the completeness and correctness of the attached
articles of organization (certified by the appropriate Secretary
of State) and operating agreement of the Seller.
SECTION 4.1.5. Servicer Resolutions. The
Administrative Agent will have received a certificate of the
Servicer's secretary or assistant secretary attesting to:
(a) the resolutions of the Servicer's Board of Directors (or an
executive committee thereof) authorizing the execution by the Servicer of the
Sale Documents to be executed by the Servicer;
(b) the names and signatures of the officers of the
Servicer authorized to execute the Sale Documents to be executed
by the Servicer; and
(c) the completeness and correctness of the attached
articles of incorporation (certified by the appropriate Secretary
of State) and by-laws of the Servicer.
SECTION 4.1.6. Legal Opinion of Counsel to the Seller and the
Servicer. The Administrative Agent will have received an opinion from counsel
to the Seller and the Servicer, substantially in the form attached hereto as
Exhibit B, together with such other matters as the Administrative Agent or the
Purchaser may reasonably request.
SECTION 4.1.7. Good Standing Certificates. The Administrative
Agent will have received certificates of recent date issued by the Secretary
of State of the State of Michigan, as to the legal existence and good standing
of the Seller and the Servicer.
SECTION 4.1.8. Representations and Covenants. On and
as of the date of the Purchase (i) the representations of the
Seller and the Servicer in Article IX shall be true and correct
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with the same effect as if made on such date and (ii) the Seller and the
Servicer shall be in compliance with the covenants set forth in this
Agreement. The Seller and the Servicer, by accepting the proceeds of such
Purchase, shall be deemed to have certified as to the truth and accuracy of
each of the matters described in the foregoing clauses (i) and (ii), both
before and after giving effect to such Purchase.
SECTION 4.1.9. Other Documents. The Administrative
Agent and the Purchaser will have received all other documents
that either of them had reasonably requested from the Seller or
the Servicer.
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall segregate all
Collections from other funds of the Servicer and the Seller within two
Business Days of receipt thereof and hold such Collections in trust for the
Purchaser in a separate bank account, provided, however, notwithstanding the
foregoing, for so long as (i) CFC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii) CFC maintains a
long-term unsecured senior debt rating of at least BBB- by S&P and Baa3 by
Moody's, the Servicer shall not be required to segregate all Collections and
shall remit such Collections with respect to each Settlement Period to the
Administrative Agent on the Settlement Date relating to such Settlement
Period.
SECTION 5.2. Application of Collections on Settlement Dates.
The Servicer will, by 3:00 P.M. (New York time) on each Settlement Date, from
Collections received during the preceding Settlement Period, pay to the
Administrative Agent and the Administrative Agent shall distribute such
Collections, together with any Hedging Proceeds received by the Administrative
Agent with respect to such Settlement Period, to the Purchaser (i) first, an
amount equal to the Carrying Costs for the Settlement Period (as such amount
shall be increased or decreased by the Carrying Costs True-up Amount, if any,
for the immediately preceding Settlement Period as determined pursuant to
Section 3.1.1(b)), (ii) second, the amount, if any, of increased costs
notified to the Seller pursuant to Section 9.3 (a) which are then due and
payable, and (iii) third, all remaining Collections as a reduction to
Investment.
SECTION 5.3. Servicer Report. The Servicer will
provide the Purchaser, either in writing or electronically, with
a Servicer Report with respect to each Settlement Period no later
than 15 days following the end of such Settlement Period (or, if
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such 15th day is not a Business Day, the next succeeding Business
Day).
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of Servicer.
(a) The Purchaser and the Seller each hereby appoint CFC as the
Servicer and CFC accepts such appointment. The Servicer, for the benefit of
the Purchaser (or the extent provided herein), shall manage, service,
administer and make collections on the 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 Purchased
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections and
furnishing reports required hereunder. 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 Seller, the
Purchaser, the Administrative Agent 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 Purchased Receivables or to
the Financed Vehicles securing such Purchased Receivables. If the Servicer
shall commence a legal proceeding to enforce a Purchased Receivable, the
Purchaser shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection, such Purchased Receivables to the Servicer. If in
any enforcement suit or legal proceeding it shall be held that the Servicer
may not enforce a Purchased Receivable on the ground that it shall not be a
real party, in interest or a holder entitled to enforce such Purchased
Receivable, the Administrative Agent 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 Purchaser. The Purchaser shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
(b) On behalf of the Purchaser, the Servicer shall use
commercially reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Purchased
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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 a repossessed Financed Vehicle at public
or private sale. The foregoing sale of a repossessed Financed Vehicle shall be
subject to the provision that, in any case in which a repossessed Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with the repair of such repossessed Financed Vehicle unless it
shall determine in its discretion that such repair will increase the
Liquidation Proceeds by an amount greater than the amount of such expense.
(c) 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 Purchased 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 Purchaser and
the Seller in the event of the relocation of a Financed Vehicle or for any
other reason. The Servicer shall not release the Financed Vehicle securing any
Purchased Receivable from the security interest granted by such Purchased
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 Purchaser in such Purchased Receivable, nor shall the Servicer increase
the number of scheduled payments due under a Purchased Receivable. The
Servicer shall inform the Purchaser and the Seller promptly, in writing, upon
the discovery of any breach pursuant to this Section 6.01(c). Unless the
breach shall have been cured by the last day of the second Settlement Period
following such discovery (or, at the Servicer's election, the last day of the
first following Settlement Period), the Servicer shall purchase any Purchased
Receivable materially and adversely affected by such breach as of such last
day.
SECTION 6.2. Replacement of Servicer.
(a) If any of the following events (a "Servicer
Default") shall occur and be continuing:
(i) any failure by the Servicer to make any payment or deposit
required to be made hereunder and the continuance of such failure for
a period of five Business Days;
(ii) any representation or warranty made by the Servicer in
Section 7.1 or any information set forth in a Servicer Report or other
certificate delivered to the
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Administrative Agent, shall prove to have been incorrect in any
material respect when made, which continues to be incorrect in any
material respect for a period of sixty days after the earlier of the
date on which an officer of the Servicer has actual knowledge thereof
and the date on which written notice thereof has been given to the
Servicer requiring the same to be remedied, by the Purchaser or the
Administrative Agent;
(iii) failure on the part of the Servicer to observe or perform
in any material respect any other term, covenant or agreement in this
Agreement or any other Sale Document which continues unremedied for
sixty days after the earlier of the date on which an officer of the
Servicer has actual knowledge of such failure and the date on which
written notice of such failure has been given to the Servicer
requiring the same to be remedied, by the Purchaser or the
Administrative Agent; or
(iv) an Insolvency Event with respect to the Seller or
the Servicer,
then, so long as such Servicer Default shall not have been remedied, the
Purchaser shall have the right to remove CFC (or any successor Servicer) as
Servicer by giving written notice thereof to the Servicer. On and after
receipt of such written notice, all authority and power of the Servicer under
this Agreement shall, without further action, pass to and be vested in such
successor Servicer as may be appointed by the Purchaser.
(b) If CFC is removed as Servicer, CFC shall transfer to any
successor Servicer designated by the Purchaser all records, correspondence and
documents (including computer software) requested by the Purchaser or such
successor Servicer and to permit such Persons to have access to, and to copy,
all software used by the Servicer in the collection, administration or
monitoring of the Purchased Receivables. In the case of software that is then
licensed by, or otherwise made available to, the Servicer from or by any third
party, the Servicer shall use its best efforts to obtain such consents and
otherwise take all actions necessary in order to enable any Servicer hereunder
to succeed to all rights of CFC to the quiet use and enjoyment of such
software for the purpose of discharging the obligations of the Servicer under
or in connection with the Sale Documents.
(c) Following the removal of CFC as Servicer, (i) the Purchaser
and the Administrative Agent may (A) notify Obligors of the ownership interest
of the Purchaser hereunder in the Purchased Receivables and the Related
Security, (B) notify each issuer of an Insurance Policy of the ownership
interest of the
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Purchaser hereunder in the Purchased Receivables and in the Related Security
(including the applicable Financed Vehicle and Insurance Policy thereon), and
(C) direct the Seller to, whereupon the Seller immediately shall, note the
interest of the Purchaser hereunder on each Certificate of Title relating to
each Financed Vehicle and (ii) the Purchaser and the Administrative Agent
shall have, in addition to all other rights and remedies under this Agreement
or otherwise, all other rights and remedies provided under the Uniform
Commercial Code of the applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
SECTION 6.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Purchaser and the Seller hereby irrevocably appoint the Servicer, and the
Servicer hereby accepts such appointment, to act for the benefit of the
Purchaser and the Seller as custodian of the following documents or
instruments which are hereby or will hereby be constructively delivered to the
Administrative Agent, as pledgee of the Seller, as of the Closing Date with
respect to each Purchased Receivable:
(a) the fully executed original of the Contract
related to such Purchased 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 Purchased Receivable, an Obligor or a
Financed Vehicle.
SECTION 6.4. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files as custodian for the benefit of
the Seller and the Purchaser and maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall
enable the Seller 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
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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 Seller or the Purchaser to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the
Seller and the Purchaser any failure on its part to hold the Receivables 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 Seller or the Purchaser 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 1 or
at such other offices to which the Servicer shall, in its discretion, relocate
such Receivables File with notice to the Administrative Agent. The Servicer
shall make available to the Seller and the Purchaser or their respective duly
authorized representative, 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
Seller or the Purchaser shall instruct.
SECTION 6.5. Custodian's Indemnification. The Servicer as
custodian shall indemnify the Seller, the Purchaser and the Administrative
Agent 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 Seller, the Purchaser, the Administrative
Agent 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 any indemnified
party for any portion of any such amount result from the willful misfeasance,
bad faith or negligence of such indemnified party.
SECTION 6.6. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cut-Off Date and
shall continue in full force and effect until terminated pursuant to this
Section. If CFC shall cease to be Servicer in accordance with the provisions
of this Agreement, the appointment of such Servicer as custodian shall be
terminated by the Purchaser. The Purchaser may terminate the Servicer's
appointment as custodian at any time following the occurrence of a Servicer
Default upon written notification to the Servicer. As soon as practicable
after any termination of such appointment, the Servicer shall deliver the
Receivable Files to the
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Administrative Agent or to a Person designated by the Administrative Agent at
a place or places as the Administrative Agent may reasonably designate.
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1 Representations and Warranties of the Seller and
the Servicer. Each of the Seller and the Servicer makes, with respect to
itself, the following representations and warranties to the Purchaser:
(a) It is a limited liability company or corporation, as
applicable, duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation and is duly qualified in good standing as a foreign corporation
in each jurisdiction where the failure to be so qualified could materially
adversely affect its ability to perform its obligations hereunder.
(b) The execution, delivery and performance by the Seller and
the Servicer of the Sale Documents, and the Seller's use of the proceeds of
the Purchases, are within the Seller's and the Servicer's respective corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's or the Servicer's respective articles of
organization or charter, as applicable, or operating agreement or by-laws, as
applicable, or (ii) law or any contractual restriction binding on or affecting
the Seller or the Servicer, and do not result in or require the creation of
any Adverse Claim (other than pursuant hereto) upon or with respect to any of
its properties; and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller or the
Servicer of the Sale Documents, or for the perfection of or the exercise by
the Purchaser of its rights and remedies under the Sale Documents, except for
the filing of the financing statements referred to in Section 4.3.3.
(d) Each Sale Document constitutes the legal, valid and binding
obligation of the Seller and the Servicer, respectively, enforceable in
accordance with its terms.
(e) There is no pending or threatened action or proceeding
affecting the Seller or the Servicer or any of its subsidiaries before any
court, governmental agency or arbitrator which may materially adversely affect
(i) its financial condition
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or operations or (ii) its ability to perform its obligations under the Sale
Documents, or which could affect the legality, validity or enforceability of
any Sale Document or of the interest of the Purchaser in the Purchased
Receivables.
(f) The Seller is the legal and beneficial owner of the
Receivables, the Related Security and Collections, free and clear of any
Adverse Claim, except as created by this Agreement; upon consummation of the
Purchase, the Purchaser will acquire a valid and perfected first priority
ownership interest in the Purchased Receivable and in the Related Security and
the Collections with respect thereto, free and clear of any Adverse Claim
except as created by this Agreement.
(g) The information provided by the Seller to the Servicer for
use in each Servicer Report prepared under Section 5.3 and all information and
Sale Documents furnished or to be furnished at any time by the Seller to the
Administrative Agent in connection with this Agreement is or will be accurate
in all material respects as of its date, and no such document will contain any
untrue statement of a material fact or will omit to state a material fact
which is necessary to make the facts stated therein not misleading.
(h) Each Servicer Report prepared by the Servicer under Section
5.3 will be accurate in all material respects as of its date.
(i) The chief place of business and chief executive office of
the Seller and the office where the Seller keeps its records concerning the
Receivables are located at the address specified on Schedule 1 to this
Agreement (or at such other location in respect of which the Seller shall have
satisfied the requirements set forth in Section 8.4(c)).
(j) The balance sheets of the Servicer and its subsidiaries as
at December 31, 1995, and the related statements of income and retained
earnings of the Servicer and its subsidiaries for the fiscal year then ended,
copies of which have been furnished to the Administrative Agent, fairly
present the financial condition of the Servicer and its subsidiaries as at
such date and the results of the operations of the Servicer and its
subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and since
December 31, 1995, there has been no material adverse change in such condition
or operations.
(k) The Seller is treating the conveyance of the
interest in the Purchased Receivables and the Collections under
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this Agreement to the Purchaser as a sale for purposes of
generally accepted accounting principles.
(l) The Servicer and the Seller are in compliance with
all of the applicable material provisions of ERISA.
(m) Other than "Chrysler Credit Corporation" (an entity which
has merged into CFC), neither the Servicer nor the Seller operates, or
originates or acquires Receivables, under any trade name, fictitious name,
assumed name or "doing business as" name.
(n) Each Purchase will constitute (i) a "current transaction"
within the meaning of Section 3(a)(3) of the Securities Act of 1933, as
amended, and (ii) a purchase or other acquisition of notes, drafts,
acceptances, open accounts receivable or other obligations representing part
or all of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended.
The Seller is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(o) No proceeds of any Purchase will be used for any purpose
that violates Regulations G or U of the Board of Governors of the Federal
Reserve System.
(p) The transfer of each Purchased Receivable by a Dealer to
CFC and by CFC to the Seller shall have been made for "reasonably equivalent
value" (as such term is used under Section 548 of the Bankruptcy Code) given
by CFC to such Dealer and by the Seller to CFC and not for or on account of
"antecedent debt" (as such term is used under Section 547 of the Bankruptcy
Code) owed by such Dealer to CFC or by the Seller to CFC.
(q) With respect to each Receivable, the Seller has complied in
all material respects with the Credit and Collection Policy.
(r) The Seller is solvent; at the time of (and immediately
after) each transfer by any Dealer to the Seller of any Receivable, each of
such Dealer (to the best of the Seller's knowledge) and the Seller shall have
been solvent; and at the time of (and immediately after) each Purchase
hereunder, the Seller shall have been solvent.
ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller and
the Servicer. Until the Investment is reduced to zero and all
other amounts due to the Purchaser hereunder have been paid in
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full, each of the Seller and the Servicer (with respect to itself) will,
unless the Purchaser has otherwise consented in writing:
(a) Comply in all material respects with all applicable laws,
rules, regulations and orders (including all material provisions of ERISA)
with respect to it, its business and properties and all Purchased Receivables
and the Related Security and Collections related thereto.
(b) Maintain its corporate existence in the jurisdiction of its
organization or incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to be
so qualified could materially adversely affect its ability to perform its
obligations hereunder.
(c) At any reasonable time, permit the Purchaser or its agents
or representatives, at the expense of the Purchaser or the Administrative
Agent to visit and inspect any of its properties, to examine its books of
account and other records and files relating to Purchased Receivables
(including, without limitation, computer tapes and disks) and to discuss its
affairs, business, finances and accounts with its officers and employees.
(d) Maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Purchased Receivables in the event of the destruction of the
originals thereof), and keep and maintain all records and other information,
reasonably necessary or advisable for the collection of the Purchased
Receivables (including, without limitation, records adequate to permit the
daily identification of Purchased Receivables and all Collections and
adjustments to Purchased Receivables).
(e) At its expense timely and fully perform and comply with all
material provisions and covenants required to be observed by CFC or the Seller
under the Contracts related to the Purchased Receivables.
(f) Comply in all material respects with the Credit and
Collection Policy in regard to each Purchased Receivable and any Contract
related to such Receivable.
(g) Treat the conveyance of the interest in the Purchased
Receivables and the Collections under this Agreement as a sale for purposes of
generally accepted accounting principles.
(h) With respect to each Purchased Receivable
purchased by CFC from a Dealer and by the Seller from CFC, take
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all actions necessary to vest legal and equitable title to such Purchased
Receivable and the Related Security irrevocably in the Seller (prior to the
transfer of such Receivable hereunder), including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC of all appropriate jurisdictions (or any comparable
law) to perfect the Seller's interest in such Purchased Receivable and the
Related Security and such other action to perfect, protect or more fully
evidence the interest of the Seller as the Administrative Agent may reasonably
request, provided, that notwithstanding anything in this Agreement to the
contrary, the Seller will not be required to amend any Certificate of Title to
show any Person other than CFC as lienholder for any Financed Vehicle prior to
the removal of CFC as Servicer pursuant to Section 6.2.
SECTION 8.2 Reporting Requirements of the Servicer. Until the
Investment is reduced to zero and all amounts due to the Purchaser hereunder
have been paid in full, the Servicer will, unless the Purchaser shall
otherwise consent in writing, furnish to the Purchaser:
(a) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Servicer, balance sheets of the Servicer and its subsidiaries as of the end of
such quarter and statements of income and retained earnings of the Servicer
and its subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified by the chief
financial officer of the Servicer;
(b) as soon as available and in any event within 90 days after
the end of each fiscal year of the Servicer, a copy of the annual report for
such year for the Servicer and its subsidiaries, containing audited financial
statements for such year certified by nationally recognized independent public
accountants;
(c) the Servicer Report as required under Section 5.3;
(d) as soon as possible, and in any event within five (5) days
after the occurrence thereof, notice (which notice shall describe such event
or condition and, if applicable, the steps being taken with respect thereto by
the Person(s) affected thereby) of: (i) the occurrence of any Servicer Default
or event which with the passage of time or the giving of notice or both would
constitute a Servicer Default; (ii) any change in the rating of any
indebtedness of the Servicer by any rating agency; or (iii) the institution of
any litigation, arbitration proceeding or governmental proceeding which could
be reasonably
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likely to have a material adverse effect on the performance by the Servicer of
its obligations under this Agreement or the other Sale Documents or the
collectibility of the Purchased Receivables; and
(e) such other information, documents, records or reports
respecting the Purchased Receivables or the condition or operations, financial
or otherwise, of the Servicer or the Seller as the Purchaser may from time to
time reasonably request.
SECTION 8.3. Negative Covenants of the Seller and the Servicer.
Until the Investment is reduced to zero and all other amounts due to the
Purchaser hereunder have been paid in full, neither the Seller nor the
Servicer will, unless the Purchaser has otherwise consented in writing;
(a) Except as provided herein, sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to any Purchased Receivables, the Related
Security or any Collections or assign any right to receive income in respect
thereof.
(b) Amend or otherwise modify the terms of any Purchased
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto, in each case, in any manner which is inconsistent with the
Credit and Collection Policy.
SECTION 8.4. Protection of the Purchaser's Interest. (a) Until
the Investment is reduced to zero and all other amounts due to the Purchaser
hereunder have been paid in full, each of the Seller and the Servicer agrees
that from time to time, at its expense, it will promptly execute and deliver
all instruments and documents and take all action that the Administrative
Agent may from time to time request in order to perfect, evidence and protect
the validity, enforceability, perfection and priority of the Administrative
Agent's and the Purchaser's interests in the Purchased Receivables, the
Related Security and the Collections and to enable the Administrative Agent
and/or the Purchaser to exercise or enforce any of its rights hereunder.
Without limiting the generality of the foregoing, the Seller and the Servicer
will: (i) on or prior to the date hereof, mark its master data processing
records and, upon the request of the Administrative Agent, its other files,
books and records relating to the Purchased Receivables with a legend
describing the Administrative Agent's and the Purchaser's interests therein;
and (ii) upon the request of the Administrative Agent, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof as may be requested by the Administrative Agent;
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(b) To the fullest extent permitted by applicable law, the
Administrative Agent shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the Seller's
signature. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement.
(c) In the event the Seller shall change its name, identity or
corporate structure (within the meaning of Section 9-402(7) of any applicable
enactment of the Uniform Commercial Code) or relocate its chief executive
office or, except in connection with the previously disclosed reorganization
of its branch offices to 25 zone offices or any other routine relocation of
such zone offices in the same state, any office where the originals of the
Contracts or the Certificates of Title or other material records relating to
the Purchased Receivables are kept: the Seller shall notify the Administrative
Agent thereof and promptly file all financing statements, instruments and
other documents requested by the Administrative Agent in connection with such
change or relocation. In the event the Seller moves its chief executive office
to a location which may charge taxes, fees, costs, expenses or other charges
to perfect the Administrative Agent's and the Purchaser's interests in the
Purchased Receivables or the Related Security and Collections related thereto,
the Seller shall pay, or reimburse the Administrative Agent and the Purchaser
in respect of, all such taxes, fees, costs, expenses and other charges and all
other costs and expenses incurred in order to maintain the enforceability of
this Agreement and/or the Administrative Agent's and the Purchaser's interests
in the Purchased Receivables and the Related Security and Collections related
thereto.
(d) In each case under this Agreement in which the Seller or
any of its Affiliates is required to note its name on a UCC financing
statement, Certificate of Title or similar instrument or document, it shall
use its current legal name as set forth in its articles of organization,
articles or certificate of incorporation, certificate of organization or
similar constitutional document filed with the chartering authority in the
jurisdiction in which such Person is organized. Such Person shall not use for
such purpose any prior name, trade name, "doing business as" name or other
fictitious name unless prior notice thereof is given to the Administrative
Agent.
ARTICLE IX: INDEMNIFICATIONS; INCREASED COSTS
SECTION 9.1. Indemnification by Seller of Purchaser,
etc. Without limiting any other rights which the Purchaser, the
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Administrative Agent and their respective officers, directors, employees,
agents and Affiliates may have hereunder or under applicable law, the Seller
hereby indemnifies such parties and holds them harmless from and against any
and all damages, losses, claims, liabilities and related costs and expenses
(including attorneys' fees and disbursements) incurred by any of them arising
out of or resulting from this Agreement or the purchase by the Purchaser of
any interest in the Purchased Receivables or the Related Security and
Collections related thereto, including, without limitation:
(a) the reliance by the Administrative Agent or the Purchaser
on any representation or warranty made by the Seller (or any of its officers)
under or in connection with this Agreement or any Sale Document, which was
incorrect in any material respect when made;
(b) the failure by the Seller to comply with any
covenant set forth in this Agreement;
(c) the failure to vest and maintain in the Purchaser, or to
transfer to the Purchaser, legal and equitable title to, and ownership of, an
undivided percentage first priority perfected ownership interest in the
Purchased Receivables, free and clear of any Adverse Claim;
(d) the transfer by the Seller to any Person (other
than the Purchaser or the Administrative Agent) of any interest
in any Purchased Receivables or Related Security;
(e) the Seller's use of proceeds of the Purchase;
(f) the failure timely to file financing statements or other
similar instruments or documents under the Uniform Commercial Code of any
applicable jurisdiction or other applicable laws with respect to any Purchased
Receivables, whether at the time of the Purchase or otherwise;
(g) the return or transfer by the Servicer of any
portion of Collections to the Seller or any other Person for any
reason whatsoever;
(h) any dispute, claim, offset or defense of any Obligor to the
payment of any Purchased Receivable (including a defense based on such
Purchased Receivable's or the related Contract's not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with
its terms, but excluding a failure to pay as a result of the financial
inability of an Obligor to pay such Purchased Receivable), or any other claim
resulting from the sale, use, operation or ownership
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of or defects in or breaches of warranties with respect to, the merchandise or
services relating to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(i) the Seller's failure to pay when due any taxes (including
sales, excise or personal property taxes) payable in connection with the
Purchased Receivables or the Related Security;
(j) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Purchased Receivable or Related
Security, or the nonconformity of any Receivable or Related Security with any
such applicable law, rule or regulation; or
(k) any Purchased Receivable which is treated as or
represented by the Seller to be an Eligible Receivable which is
not as of the date of the Purchase an Eligible Receivable;
(l) the failure of the Servicer to perform its duties
as custodian as describe in Article VI;
(m) the disbursement of any proceeds of such Required Insurance
to any Person other than the Servicer for disposition as a Collection in the
manner contemplated in Article V hereof;
(n) any warranty or products liability claim allegedly arising
out of or in connection with merchandise or services which are the subject of,
or were financed with the proceeds of, any Contract under which any of the
Purchased Receivables arise, or any use or misuse by any Person of any
Financed Vehicle (including, without limitation, any use involving the
handling or disposition of any hazardous substance or waste material);
(o) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of the Purchase or the ownership of an
interest or in respect of any Purchased Receivable or Related Security;
(p) any action taken by the Seller or the Servicer (if other
than the Administrative Agent or the Purchaser) or any of their Affiliates in
the enforcement or collection of any Purchased Receivable; or
(q) the inability of the Administrative Agent or the Purchaser
to obtain any judgment in or utilize the courts of any jurisdiction in which
an Obligor may be located, which inability is caused by the Seller's, CFC's or
any Dealer's failure to qualify to do business in such jurisdiction or to file
a notice
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of business activities report or similar report in such jurisdiction.
If and to the extent that the foregoing undertaking may be unenforceable for
any reason, the Seller hereby agrees to make the maximum contribution to the
payment of the amounts indemnified against in this Section which is
permissible under applicable law.
SECTION 9.2 Indemnification Due to Failure to Consummate
Purchase. The Seller will indemnify the Purchaser on demand and hold it
harmless against all costs (including, without limitation, breakage costs) and
expenses resulting from any failure by the Seller to consummate the Purchase
after the Purchaser has accepted an offer from the Seller to make such
Purchase.
SECTION 9.3. Increased Costs under Liquidity Facilities and
Credit Facilities. (a) If the Purchaser becomes obligated to compensate the
lenders under any of its Liquidity Facilities or Credit Facilities (any such
lender being an "Increased Costs Lender") for a reduction in the rate of
return on their capital due to a change in law or regulation (which law or
regulation is generally applicable to the banking or other applicable industry
in the country of origin of the applicable Increased Costs Lender or in the
country in which such Increased Costs Lender operates), as more specifically
provided in the documents relating to such Facilities, then the Seller shall,
within 30 days following the Purchaser's request therefor, reimburse the
Purchaser for the amount of any such compensation, provided, that such
reimbursement (i) shall be made solely out of excess Collections of Purchased
Receivables and (ii) shall not exceed one percent (1.0%) per annum of the
average daily Investment.
(b) The Purchaser agrees that if compensation under Section
9.3(a) is sought by any lender under any of the Purchaser's Liquidity
Facilities or Credit Facilities, the Purchaser will request that such
Increased Costs Lender use its reasonable efforts to reduce or eliminate any
such claim for compensation and, if such claim for compensation is not reduced
or eliminated within 15 days of the Purchaser's request, the Purchaser will
notify the Seller that it is obligated (or will, after the passage of time,
become obligated) to pay the compensation described in Section 9.3(a),
provided, that, for a period of 15 days after the date of such notice (a
"Remarketing Period"), the Administrative Agent (on behalf of the Purchaser)
shall use reasonable commercial efforts to sell or otherwise dispose of the
Purchased Receivables in transactions exempt from registration under the
Securities Act of 1933 (a "Remarketing")
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to a Person that would not be subject to the increased costs for which
compensation is then being sought under Section 9.3(a). Any such Remarketing
shall occur within 15 days after the end of the applicable Remarketing Period
(or such other period that shall be acceptable to the Seller) and shall be for
a price equal to the sum of the outstanding Investment, all accrued and unpaid
Carrying Costs and all other amounts then due and owing by the Seller or the
Servicer under this Agreement and the other Sale Documents as of the date such
sale or other disposition is closed (including any accrued and unpaid
increased costs under Section 9.3(a)). If no offer is received during the
Remarketing Period, or if the sale or other disposition relating to an offer
is not completed within 15 days (or such other period acceptable to the
Seller), then the Administrative Agent (on behalf of the Purchaser) shall
offer to sell the Purchased Receivables to the Seller for a price equal to the
sum of the outstanding Investment, all accrued and unpaid Carrying Costs and
all other amounts then due and owing by the Seller or the Servicer under this
Agreement and the other Sale Documents as of the date such sale is closed
(including any accrued and unpaid increased costs under Section 9.3(a)),
provided, that the Seller shall have no obligation to accept such offer, but
if such offer is accepted, then the Seller shall have 15 days to close such
sale.
(c) The Purchaser further agrees that it will not seek
reimbursement from the Seller for any claim for compensation under Section
9.3(a) unless the Purchaser is as a general policy seeking such reimbursement
from other sellers which are participating in receivables purchase facilities
with the Purchaser, provided, that the Purchaser shall not be precluded from
waiving the reimbursement of such compensation from any such other seller.
SECTION 9.4. Notices. The Purchaser agrees to notify the Seller
upon its knowledge of a claim for which it intends to seek indemnification
under Section 9.1 or reimbursement under Section 9.3 from the Seller. The
Seller agrees to assist the parties indemnified under Section 9.1, to the
extent requested by them, in any action, suit or proceeding brought by or
against them in connection with the indemnification granted herein.
ARTICLE X: ADMINISTRATIVE AGENT
SECTION 10.1. Appointment of Administrative Agent.
The Purchaser has appointed Canadian Imperial Bank of Commerce as
its Administrative Agent. The Administrative Agent is
responsible for administering and enforcing this Agreement and
fulfilling all other duties expressly assigned to it in this
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Agreement. The Purchaser has granted the Administrative Agent the authority to
take all actions necessary to assure the Seller's compliance with the terms of
this Agreement and to take all actions required or permitted to be performed
by the Purchaser under this Agreement.
SECTION 10.1.1. Replacement of Administrative Agent. The
Purchaser may, at any time in its discretion, remove a Administrative Agent
and appoint a new Administrative Agent, which shall have the duties described
in Section 10.1.
ARTICLE XI: MISCELLANEOUS
SECTION 11.1. Amendments, Etc. No amendment or waiver of, or
consent to the Seller's or the Servicer's departure from, any provision of
this Agreement shall be effective unless it is in writing and signed by the
parties hereto and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
SECTION 11.2. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein,
be in writing (including telecopier, telegraphic, telex or cable
communication) and sent, as to each party hereto, at its address set forth
under its name on the signature pages hereto, or at such other address as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective when sent.
SECTION 11.3. Payments Net of Taxes. All payments by the Seller
payable under this Agreement shall be made free and clear of, and without
deduction for, any present or future income, stamp or other taxes, fees,
duties, withholdings or other charges imposed by any taxing authority as a
result of any change in law or regulation after the Purchase Date. If, after
the Purchase Date, any law or regulation of any governmental authority
requires that the Seller or the Servicer make any withholding or deduction
from any payment by the Seller or the Servicer, then the Seller or the
Servicer, as applicable, will:
(a) pay to the relevant authority the full amount
required to be withheld or deducted;
(b) promptly forward to the Purchaser an official
receipt or other satisfactory documentation evidencing such
payment to such authority; and
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(c) pay to the Purchaser any additional amounts necessary to
ensure that the net amount actually received by the Purchaser will equal the
full amount it would have received had no such withholding or deduction been
required.
SECTION 11.4. No Waiver; Remedies. No failure on the part of
the Purchaser to exercise, and no delay in exercising, any right hereunder or
under any Sale Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 11.5. Binding Effect; Assignability. (a) This Agreement
shall be binding upon and inure to the benefit of the Seller, the Servicer,
the Purchaser, the Administrative Agent and their respective successors and
assigns, except that the Seller shall not have the right to assign any
interest herein without the prior written consent of the Purchaser. The
Purchaser may assign any of its rights or obligations hereunder to any Person;
provided that in the case of any such assignment proposed to be made prior to
the occurrence of a Servicer Default, the consent of the Seller (which consent
shall not be unreasonably withheld) shall be required.
(b) This Agreement shall create and constitute the continuing
obligation of the parties hereto in accordance with its terms, and shall
remain in full force and effect until such time as the Investment is reduced
to zero and all other amounts due to the Purchaser hereunder have been paid in
full; provided, however, that rights and remedies of the Purchaser under
Article IX and the provisions of Section 11.11 shall survive any termination
of this Agreement.
SECTION 11.6. Governing Law. This Agreement and the
Sale Documents shall be governed by, and construed in accordance
with, the laws of the State of New York.
SECTION 11.7. Construction of the Agreement. The parties hereto
intend that the conveyance of the interest in the Purchased Receivables by the
Seller to the Purchaser shall be treated as sales for purposes of generally
accepted accounting principles. If, despite such intention, a determination is
made that such transactions shall not be treated as sales, then this Agreement
shall be interpreted to constitute a security agreement and the transactions
effected hereby shall be deemed to constitute a secured financing by the
Purchaser to the Seller under applicable law. For such purpose, the Seller
hereby grants to the Purchaser a continuing security interest in the Purchased
Receivables and the Related Security and Collections related
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thereto to secure the obligations of the Seller to the Purchaser
hereunder.
SECTION 11.8. No Proceedings. The Seller, the Administrative
Agent and the Servicer each hereby agrees that it will not institute against
the Purchaser any bankruptcy, reorganization, insolvency or similar proceeding
until the date which is one hundred twenty-three days since the last day on
which any commercial paper notes or medium term notes issued by the Purchaser
shall have matured.
SECTION 11.9. Confidentiality. The Purchaser agrees to maintain
the confidentiality of any information regarding the Seller obtained in
accordance with the terms of this Agreement which is not publicly available,
but the Purchaser may, with notice to the Seller, reveal such information (a)
to applicable rating agencies, liquidity providers and credit providers, (b)
as necessary or appropriate in connection with the administration or
enforcement of this Agreement or its funding of the Purchase under this
Agreement, (c) as required by law, government regulation, court proceeding or
subpoena or (d) to bank regulatory agencies and examiners.
SECTION 11.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
SECTION 11.11. Submission to Jurisdiction.The Seller and the
Servicer hereby submit to the nonexclusive jurisdiction of the Courts of the
State of New York and of any Federal Court located in such State in any action
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Seller and the Servicer irrevocably waives
any objection which it may have to the laying of venue of any such proceeding
and any claim that any such proceeding has been brought in an inconvenient
forum.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their duly authorized officers as of the date set forth on the
cover page of this Agreement.
PREMIER RECEIVABLES L.L.C.
as Seller
By: /S/ D. H. Olsen
---------------------------------------
Title: Assistant Treasurer of
Premier Auto Receivables
Company, a Member of the
Seller
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
CHRYSLER FINANCIAL CORPORATION
as Servicer
By: /S/ D. H. Olsen
-----------------------------------
Title: Assistant Treasurer
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
ASSET SECURITIZATION COOPERATIVE
CORPORATION, as Purchaser
By: /S/ Marcia Scheiner
--------------------------------
Chief Financial Officer
Address:
c/o Canadian Imperial Bank
of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: President
Facsimile: (212) 856-3643
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CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /S/ Christopher C. Beaudet
---------------------------------------
Authorized Signatory
Address:
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile: (212) 856-3643
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Exhibit 10-TTTT
RECEIVABLES SALE AGREEMENT
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION,
as Servicer,
MONTE ROSA CAPITAL CORPORATION
as Purchaser,
and
UNION BANK OF SWITZERLAND, NEW YORK BRANCH
as Administrative Agent
Dated as of December 12, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
ARTICLE II: THE SALE AND PURCHASE
SECTION 2.1. Sale and Purchase........................................14
SECTION 2.2. Purchase Price...........................................14
SECTION 2.3. Seller's Optional Termination............................14
SECTION 2.4. Seller's Obligation to Repurchase........................15
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs..........................15
SECTION 3.1.1. Purchase Discount........................................15
SECTION 3.1.2. Program Fee..............................................17
SECTION 3.1.3. Servicer Fee.............................................18
SECTION 3.2. Interest on Unpaid Amounts...............................18
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4.1. Conditions Precedent to Purchase.........................18
SECTION 4.1.1. Absence of Liens.........................................18
SECTION 4.1.2. Financing Statements.....................................18
SECTION 4.1.3. Schedule of Contracts....................................18
SECTION 4.1.4. Seller Resolutions.......................................18
SECTION 4.1.5. Servicer Resolutions.....................................19
SECTION 4.1.6. Legal Opinion of Counsel to the
Seller and the Servicer..................................19
SECTION 4.1.7. Good Standing Certificates...............................19
SECTION 4.1.8. Representations and Covenants............................19
SECTION 4.1.9. Fee Letter...............................................20
SECTION 4.1.10. Other Documents..........................................20
SECTION 4.1.11. Upfront Fee..............................................20
SECTION 4.1.12. Interest Rate Cap and Swap Agreement.....................20
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections..............................................20
SECTION 5.2. Application of Collections...............................21
SECTION 5.3. Advances.................................................21
SECTION 5.4. Application of Collections on
Settlement Dates.........................................22
SECTION 5.5. Servicer Report..........................................23
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of Servicer.......................23
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SECTION 6.2. Replacement of Servicer..................................23
SECTION 6.3. Custody of Receivables Files.............................25
SECTION 6.4. Duties of Servicer as Custodian..........................25
SECTION 6.5. Effective Period and Termination.........................26
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of
the Seller and the Servicer..............................26
ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller
and the Servicer.........................................28
SECTION 8.2. Reporting Requirements of the Servicer...................28
SECTION 8.3. Negative Covenants of the Seller and
the Servicer.............................................29
SECTION 8.4. Protection of the Purchaser's Interest...................29
ARTICLE IX: ADMINISTRATIVE AGENT
SECTION 9.1. Appointment of Administrative Agent......................30
SECTION 9.2. Replacement of Administrative Agent......................30
ARTICLE X: MISCELLANEOUS
SECTION 10.1. Amendments, Etc.........................................30
SECTION 10.2. Notices, Etc............................................30
SECTION 10.3. No Waiver; Remedies.....................................31
SECTION 10.4. Binding Effect; Assignability...........................31
SECTION 10.5. GOVERNING LAW...........................................31
SECTION 10.6. Construction of the Agreement...........................31
SECTION 10.7. No Proceedings..........................................32
SECTION 10.8. Confidentiality.........................................32
SECTION 10.9. Execution in Counterparts...............................32
SECTION 10.10. Indemnification by Seller...............................32
EXHIBITS
EXHIBIT A - Form of Servicer Statement
EXHIBIT B - Form of Seller's Counsel Opinion
EXHIBIT C - Swap Agreement
-ii-
<PAGE>
RECEIVABLES SALE AGREEMENT dated as of December 12, 1996
among PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as the
"Seller", CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer", MONTE ROSA CAPITAL CORPORATION, as the "Purchaser" and
UNION BANK OF SWITZERLAND, NEW YORK BRANCH, as the "Administrative Agent" for
the Purchaser.
ARTICLE I: DEFINITIONS
"Administrative Agent" means Union Bank of Switzerland,
New York Branch and any replacement thereof under Section 9.1.
"Advance" means either a Precomputed Advance or Simple
Interest Advance or both, as applicable.
"Adverse Claim" means any mortgage, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(consensual, statutory or other), charge, security arrangement, or any other
encumbrance or other right or claim in, of or on any Person's assets or
properties in favor of any other Person, of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any financial lease having substantially the same economic
effect as any of the foregoing).
"Aggregate Principal Balance" means, at any time, the
aggregate Principal Balance of all Purchased Receivables at such time.
"Agreement" means this Receivables Sale Agreement, as it may
be amended from time to time.
"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 Balloon Payment
Receivable, an amount equal to the present value of the fixed level payment
monthly installments (not including the amount designated as the Balloon
Payment) under the Balloon Payment 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 Balloon Payment Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
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"Balloon Payment" means, for any Receivable, the dollar
amount of any payment which is not a level monthly payment (other than the
first or last payment made on the Receivable which is minimally different from
the other level payments).
"Balloon Payment Program" means a retail installment sale
program in which the final payment is a Balloon Payment and the Balloon
Payment may be made by the Obligor by (i) payment in full in cash of the
Balloon Payment, (ii) return of the Financed Vehicle to the Servicer in lieu
of paying the Balloon Payment in cash provided that certain conditions are
satisfied or (iii) refinancing the Balloon Payment in accordance with certain
conditions.
"Balloon Payment Receivable" means any Contract listed on
the Schedule of Contracts 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 of the Rule of 78s, but also
requires a final payment that is a Balloon Payment that may be made by (i)
payment in full in cash of the Balloon Payment, (ii) return of the Financed
Vehicle to the Servicer provided that certain conditions are satisfied, or
(iii) refinancing the Balloon Payment in accordance with certain conditions.
"Business Day" means any day other than a day on which banks
are not authorized to be open or required to be closed in New York City.
"Carrying Costs" means, for each Settlement Period, an
amount equal to the sum of:
(i) (APD% + APF%) x DSP x AI
---
360
plus
(ii) SF% x DSP x APB
---
360
where APD% = the average for such
Settlement Period of the
weighted average daily per
annum Purchase Discount rate
(expressed as a percentage)
for each day during such
Settlement Period
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APF% = average for such Settlement
Period of the weighted average
daily per annum percentage
rate of the Program Fee for
each day during such
Settlement Period
SF% = The per annum percentage rate
of the Servicer Fee
DSP = the number of days in such
Settlement Period
AI = the average daily Investment
during such Settlement Period
APB = the Aggregate Principal
Balance on the first day of
such Settlement Period.
"Carrying Costs True-up Amount" has the meaning assigned to
that term in Section 3.1.1(b).
"Certificate of Title" means any certificate, instrument or
other document issued by a state or other governmental authority in respect of
any motor vehicle for the purpose of evidencing the ownership of, or any
Adverse Claim in or against, such motor vehicle.
"CFC" means Chrysler Financial Corporation, a Michigan
corporation.
"Collection" means any amount paid by an Obligor or any
other party with respect to a Purchased Receivable, including (i) Liquidation
Proceeds and any amounts paid by the Seller in connection with the repurchase
of Receivables pursuant to Sections 2.3 or 2.4 and (ii) any Precomputed
Advance or Simple Interest Advance made by the Servicer pursuant to Section
5.3.
"Commercial Paper Notes" means the commercial paper
notes issued by the Purchaser.
"Contract" means, with respect to any Receivable, any and
all instruments, agreements, invoices, or other writings pursuant to which
such Receivable arises or which evidence such Receivable.
"Credit and Collection Policy" means the credit and
collection policies and practices of the Servicer and any
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successor Servicer relating to Receivables and Contracts, such policies being
subject to unilateral revision or modification at any time by the Servicer or
any successor Servicer.
"Credit Facilities" means each of the committed loan
facilities, lines of credit, letters of credit and other forms of credit
enhancement available to the Purchaser which are not Liquidity Facilities.
"Cut-Off Date" means December 10, 1996.
"Dealer" means an automobile or light-duty truck dealership
located within the United States at or through which a Financed Vehicle shall
have been purchased or is proposed to be purchased.
"Delinquency Ratio" means, as of the last calendar day of
any month, a fraction, expressed as a percentage, the numerator of which is
the sum of the Principal Balances of all Receivables which were Delinquent
Receivables as of the last calendar day of such month and the last calendar
day of each of the two immediately preceding months, to the extent such
preceding months exist, and the denominator of which is the sum of the
Aggregate Principal Balance on such last calendar day of such month and on the
last calendar day of each of the two immediately preceding months, to the
extent such preceding months exist.
"Delinquent Receivable" means any Receivable which has 10%
or more of a scheduled payment past due for more than 60 days.
"Eligible Receivable" means, as of the Cut-Off Date,
any Receivable:
(i) the Obligor of which (a) is a resident of the
United States and (b) is not an affiliate of the originating
Dealer or any of the parties hereto,
(ii) the Obligor of which (a) is not the Obligor of any
Receivable which is a Delinquent Receivable and (b) is not the
subject of any bankruptcy, insolvency or reorganization proceeding or
any other proceeding seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it
or any substantial part of its property,
(iii) which is "chattel paper" within the meaning of
Section 9-105 of the UCC of all applicable jurisdictions,
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(iv) which is denominated and payable only in United
States dollars in the United States,
(v) which (a) has been originated in the United States by a
Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business and (b) satisfies all applicable
requirements of the Credit and Collection Policy,
(vi) which arises under a Contract (a) which, together with
such Receivable, is (1) in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor,
enforceable against such obligor in accordance with its terms and (2)
subject to no dispute, offset, counterclaim or other defense, and (b)
with respect to which (1) no default, breach, violation, or event
permitting acceleration under the terms thereof has occurred and (2)
there has not arisen any condition that, with notice or lapse of time
or both, would constitute a default, breach, violation or event
permitting acceleration under the terms thereof,
(vii) which, together with the related Contract, (a) is
secured by a perfected, valid, subsisting and enforceable first
priority security interest in favor of CFC in the related Financed
Vehicle, (b) contains customary and enforceable provisions such that
the rights and remedies of the holder of such security interest are
adequate for realization against the collateral of the benefits of
the security, and (c) was originated and transferred to the Seller
without any conduct constituting fraud or misrepresentation on the
part of the applicable Dealer, CFC or the Seller,
(viii) which, together with the related Contract,
immediately following the execution of such Contract, was purchased
by (and the originating Dealer has validly assigned good and
marketable ownership thereof to) CFC, which, in turn, has validly
sold such Receivable to the Seller, in each case, free and clear of
all Adverse Claims, and such purchase and assignment of such
Receivable, such Contract and the Related Security to CFC is
expressly contemplated in such Contract,
(ix) which, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating
to usury, truth in lending, fair credit billing, fair credit
reporting, equal credit
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opportunity, fair debt collection practices and privacy) and with
respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(x) the Financed Vehicle securing which, (a) is free and
clear of any Adverse Claim other than the security interest therein
then being assigned by the Seller to the Purchaser, and no
enforcement action, whether by repossession or otherwise, has been
taken with respect to such Financed Vehicle and (b) is covered by the
Required Insurance in respect of such Financed Vehicle, and such
Required Insurance is in full force and effect, and has been assigned
to the Seller and is fully assignable to the Purchaser,
(xi) as to which the Administrative Agent or the Purchaser
has not notified the Seller that such Receivable or class of
Receivables is not acceptable as an Eligible Receivable, including,
without limitation, because such Receivable arises under a Contract
that is not acceptable,
(xii) with respect to the outstanding balance thereof, (a)
the related Contract requires that payment in full of such
outstanding balance is scheduled to be made (1) not earlier than 5
months after, and (2) not later than 60 months after, the date any
interest therein is purportedly transferred to the Purchaser
hereunder and (b) such Outstanding Balance is scheduled to be paid in
equal consecutive monthly installments, unless such Receivable arises
under a Balloon Payment Program, and
(xiii) which Receivable bears interest at the per annum rate
stated on the face of the related Contract, which per annum rate
remains fixed during the term of such Receivable and accrued interest
on such Receivable is payable monthly, in arrears.
"Fee Letter" means that certain letter agreement of even
date herewith (as the same may be amended, restated, supplemented or otherwise
modified from time to time) among the Seller, the Purchaser and the
Administrative Agent regarding various fees payable by the Seller hereunder.
"Finance Charges" means, with respect to any Receivable and
its related Contract, any finance, interest or similar charges owing by an
Obligor pursuant to such Contract, including, without limitation, any charge
payable in connection with any extension or adjustment under such Contract
(without regard to
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whether any such extension or adjustment is permitted under the terms of this
Agreement).
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the applicable Contract.
"Full Payoff" has the meaning assigned to that term in
Section 5.2(a).
"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.
"Insurance Policy" means (i) any comprehensive and
collision, fire, theft or other insurance policy maintained by an Obligor in
which Servicer is named as loss payee with respect to one or more Financed
Vehicles, and (ii) any credit, life or disability insurance maintained by an
Obligor in connection with any Contract.
"Interest Rate Cap" means that certain ISDA Master Agreement
dated as of December 12, 1996 between CFC and the Purchaser, together with any
schedules and/or confirmations thereto or thereof, in each case, as the same
may be amended, restated, substituted, replaced, supplemented or otherwise
modified from time to time.
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<PAGE>
"Interest Rate Cap Proceeds" means, at any time, any amounts
paid or payable under the Interest Rate Cap by CFC to the Purchaser or the
Administrative Agent for the benefit of the Purchaser, other than any such
amounts paid in respect of Swap Shortfalls.
"Investment" means the aggregate amount of cash paid by the
Purchaser to the Seller for the Purchase less the amount of all Collections
received and applied as reductions in Investment pursuant to Article V.
"Liquidated Receivable" means any Purchased Receivable
liquidated by the Servicer through the sale of a Financed Vehicle or
otherwise.
"Liquidity Facilities" means each of the committed loan
facilities, lines of credit and other financial accommodations available to
the Purchaser to support the liquidity of the Purchaser's Commercial Paper
Notes.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the monies collected in respect thereof, from whatsoever source,
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.
"Net Loss" for a month means the sum of the Aggregate
Principal Balance of all Purchased Receivables which are deemed to be
uncollectible for such month, minus any Liquidation Proceeds received during
such month, plus any losses resulting from disposition expenses paid during
such month.
"Net Loss Ratio" means, as of the last day of any month, a
fraction, expressed as a percentage, the numerator of which is the product of
(i) the sum of the Net Loss for such month and the two immediately preceding
months, to the extent such months exist and (ii) a factor of 12 divided by the
number of months included in the sum in clause (i), and the denominator of
which is the average of the Aggregate Principal Balance on the first day of
the month and the first day of the two immediately preceding months, to the
extent such months exist.
"Notional Amount" means, with respect to the Swap Agreement
on any date, the respective dollar amount relating to such date set forth as
the notional amount of the Swap Agreement on the confirmation attached
thereto.
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<PAGE>
"Obligor" means any Person which is obligated to make
payment on a Receivable.
"Outstanding Precomputed Advances" on the Precomputed
Receivables means the sum, as of the close of business on the last day of a
Settlement Period, of all Precomputed Advances as reduced as provided in
Section 5.3(a).
"Outstanding Simple Interest Advance" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Settlement Period, of all Simple Interest Advances as reduced as provided in
Section 5.3(b).
"Partial Payoff" has the meaning assigned to that term
in Section 5.2(a).
"Payahead" on a Receivable that is a Precomputed Receivable
means the amount, as of the close of business on the last day of a Settlement
Period, computed in accordance with Section 5.2(a) with respect to such
Receivable.
"Payahead Balance" on a Receivable that is a Precomputed
Receivable means the sum, as of the close of business on the last day of a
Settlement Period, of all Payaheads made by or on behalf of the Obligor with
respect to such Precomputed Receivable, as reduced by applications of previous
Payaheads with respect to such Precomputed Receivable pursuant to Sections
5.2(a) and 5.3(a).
"Person" means any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Precomputed Advance" means the amount, as of the close of
business on the last day of a Settlement Period, which the Servicer is
required to advance on the related Precomputed Receivables pursuant to Section
5.3(a).
"Precomputed Receivable" means any Receivable under which
the portion of a payment allocable to earned interest (which may be referred
to in the related Contract as an add-on finance charge) and the portion
allocable to the Amount Financed is determined according to the sum of
periodic balances or the sum of monthly balances or any equivalent method or
which is a monthly actuarial receivable.
"Principal Balance" means with respect to any Receivable the
outstanding principal balance thereof determined
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in accordance with the Credit and Collection Policy and the Servicer's
customary calculation methods provided, that with respect to a Receivable
identified as a Balloon Payment Receivable, the Principal Balance shall not
include the Balloon Payment.
"Program Fee" has the meaning assigned to that term in
Section 3.1.2.
"Purchase" has the meaning assigned to that term in
Section 2.1.
"Purchase Amount" means the amount, as of the close of
business on the last day of a Settlement Period, required to prepay in full a
Receivable, as applicable, under the terms thereof including interest to the
end of the month of purchase.
"Purchase Date" means the date on which the conditions
precedent to the Purchase described in Section 4.1 have been satisfied or
waived.
"Purchase Discount" has the meaning assigned to that
term in Section 3.1.1.
"Purchased Receivable" means a Receivable arising under a
Contract listed on the Schedule of Contracts delivered to the Administrative
Agent prior to the Purchase Date being sold to Purchaser under this Agreement.
"Purchaser" means Monte Rosa Capital Corporation, a Delaware
corporation, and its successors and assigns.
"Receivable" means the indebtedness and other obligations of
an Obligor arising under a Contract, whether such indebtedness or other
obligations constitute accounts, chattel paper, instruments or general
intangibles, and including, without limitation, the obligation to pay any
Finance Charges with respect thereto.
"Receivables Files" means the documents specified in Section
6.3.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed Vehicle,
the financing of the purchase of which gave rise to such Receivable,
including, without limitation, all of the Seller's right, title and
interest in and to the proceeds of
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the Insurance Policies, and all warranties, indemnities, service
obligations and other contract rights issued or granted by, or
otherwise existing under applicable law against, the manufacturer or
Dealer in respect of such Financed Vehicle,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure
payment of such Receivable, whether pursuant to the Contract related
to such Receivable, or otherwise, together with all financing
statements signed by an Obligor describing any collateral securing
such Receivable, and including, without limitation, all security
interests or liens, and property subject thereto, granted by any
Person (whether or to the primary Obligor on such Receivable) under
or in connection therewith,
(iii) all of the Seller's right, title and interest in, to
and under any instrument, document or agreement relating to the
transfer of such Receivable by the applicable Dealer to CFC and, in
turn, by CFC to the Seller, and all claims against such Dealer or CFC
arising from or in connection with the purported transfer of such
Receivable to CFC and, in turn, to the Seller,
(iv) all books, records and other information relating
to such Receivable, including, without limitation, all
Contracts,
(v) all service contracts and other contracts and
agreements relating to such Receivable, and
(vi) all proceeds of any of the foregoing.
"Required Insurance" means an Insurance Policy with respect
to a Financed Vehicle (i) that has been issued to the Obligor by an insurance
company acceptable to the Servicer, (ii) that provides comprehensive
collision, fire, theft and other physical damage coverage, (iii) that is in an
amount not less than the market value of the applicable Financed Vehicle, and
(iv) that has the Servicer noted as the loss payee thereon.
"Reserve" means an amount equal to 5% of the Investment
as of the Purchase Date.
"Sale Documents" means this Agreement, the Exhibits hereto
to which the Seller is a party, the Fee Letter, the Interest Rate Cap and all
other certificates, instruments, agreements and documents executed from time
to time by the Seller
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in connection with the transactions contemplated in this Agreement.
"Schedule of Contracts" means the list of Contracts
delivered to the Administrative Agent, such list being in microfiche, paper or
electronic format.
"Seller" means Premier Receivables L.L.C., a Michigan
limited liability company, and its successors and permitted assigns.
"Servicer" means CFC or any replacement thereof under
Article VI.
"Servicer Default" has the meaning assigned to that
term in Section 6.2(a).
"Servicer Fee" has the meaning assigned to the term in
Section 3.1.3.
"Servicer Report" means the report in the form of Exhibit A
hereto to be provided by the Servicer in accordance with Section 5.5 of this
Agreement, which report shall include a calculation of the Delinquency Ratio
and the Net Loss Ratio for the applicable month.
"Settlement Date" means the twentieth (20th) day of each
month following a related Settlement Period (or if such day is not a Business
Day, the next succeeding Business Day).
"Settlement Period" means a calendar month, provided, that,
for purposes of the initial Settlement Period, such period shall commence as
of the Cut-Off Date and end on December 31, 1996.
"Simple Interest Advance" means the amount of interest, as
of the close of business on the last day of a Settlement Period, which the
Servicer is required to advance on the Simple Interest Receivables pursuant to
Section 5.3(b).
"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of (a)
the fixed rate of interest, (b) the unpaid principal balance, and (c) a
fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made and the denominator of which is 365,
and the remainder of such payment is allocable to principal.
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"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.
"Standard Receivable" means any Contract listed on the
Schedule of Contracts (which Schedule may be in the form of microfiche) that
is not a Balloon Payment Receivable.
"Swap Agreement" means that certain ISDA Master Agreement
dated as of December 12, 1996 between the Purchaser and the Swap Counterparty,
together with any schedules and/or confirmations thereto or thereof, a copy of
which is attached hereto as Exhibit C (as the same may be amended, restated,
substituted, replaced, supplemented or otherwise modified from time to time).
"Swap Counterparty" means UBS Securities (Swaps), Inc.
or any successor or assignee thereof or replacement therefor
under the Swap Agreement.
"Swap Shortfall" means, on any Settlement Date for any
Settlement Period, an amount equal to sum for each separate period during such
Settlement Period for which a separate Notional Amount is in effect under the
Swap Agreement of the product for each such period of (a) the positive amount,
if any, by which the Notional Amount of the Swap for such period exceeded the
average Investment during such period, (b) the positive amount (expressed as a
per annum percentage), if any, by which the Fixed Rate (as such term is used
in the Swap Agreement) exceeded the Floating Rate (as such term is used in the
Swap Agreement) during such period and (c) a fraction, the numerator of which
is the number of days in such period and the denominator of which is 360.
"Swap Windfall" means, on any Settlement Date for any
Settlement Period, an amount equal to the sum for each separate period during
such Settlement Period for which a separate Notional Amount is in effect under
the Swap Agreement of the product for each such period of (a) the positive
amount, if any, by which the Notional Amount of the Swap for such period
exceeded the average Investment during such period, (b) the positive amount
(expressed as a per annum percentage), if any, by which the Floating Rate (as
such term is used in the Swap Agreement) exceeded the Fixed Rate (as such term
is used in the Swap Agreement) during such period and (c) a fraction, the
numerator of which is the number of days in such period and the denominator of
which is 360.
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"Upfront Fee" has the meaning assigned to that term in
Section 4.1.11.
ARTICLE II: THE SALE AND PURCHASE
SECTION 2.1. Sale and Purchase. Upon the terms and subject
to the conditions set forth herein, effective as of the Purchase Date, (i) the
Seller hereby sells, transfers and assigns to the Purchaser all of the
Seller's right, title and interest to and in the Purchased Receivables,
together with the Related Security and Collections from and after the Cut-Off
Date relating to such Purchased Receivables and (ii) the Purchaser hereby
purchases and accepts the transfer and assignment of all of the Seller's
right, title and interests to and in the Purchased Receivables, together with
Related Security and Collections relating to such Purchased Receivables (the
foregoing sale, transfer and assignment being referred to as the "Purchase")
and (iii) the Purchaser hereby, without any further action hereunder, does
sell, transfer, assign, set over and otherwise convey to the Seller, effective
as of the Purchase Date, without recourse, representation or warranty of any
kind, all right, title and interest of the Purchaser in and to the Balloon
Payments, all monies due and to become due and all amounts received with
respect thereto and all proceeds thereof.
SECTION 2.2. Purchase Price. The purchase price payable by
the Purchaser for the Purchase shall equal the Aggregate Principal Balance as
of the Cut-Off Date. Such purchase price shall be comprised of a cash
component and a deferred payment component. The cash component of the Purchase
Price shall be paid by the Purchaser to the Seller on the Purchase Date and
shall equal the Aggregate Principal Balance of the Purchased Receivables as of
the Cut-Off Date minus the Reserve calculated as of such Purchase Date. Upon
and after the reduction of the Investment to zero and the payment in full of
all other amounts due to the Purchaser hereunder, all Collections or other
cash received by the Purchaser on account of Receivables and the interest of
the Purchaser therein and all Receivables held by or on behalf of the
Purchaser will be transmitted in the form received by the Purchaser to the
Seller. The transmission of such amount by the Purchaser shall be deemed to
satisfy the payment of the deferred payment component of the purchase price
under this Section 2.2.
SECTION 2.3. Seller's Optional Termination. The Seller shall
have the right, on five (5) Business Days' written notice to the
Administrative Agent, at any time following the reduction of the Aggregate
Principal Balance hereunder to a level
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that is less than ten percent (10%) of the Aggregate Principal Balance on the
Purchase Date, to repurchase from the Purchaser all, and not part, of the then
outstanding Purchased Receivables, together with the Related Security and
Collections relating to such Purchased Receivables. The purchase price in
respect thereof shall be an amount equal to the Investment outstanding at such
time plus all other amounts payable (whether due or accrued) hereunder or
under any other Sale Document to the Purchaser or the Administrative Agent at
such time. Such repurchase shall be without representation, warranty or
recourse of any kind by, on the part of or against the Purchaser or the
Administrative Agent.
SECTION 2.4. Seller's Obligation to Repurchase. Upon the
discovery by the Seller, the Administrative Agent or the Purchaser (and the
giving of notice thereof to the Seller in the case of any such discovery by
the Administrative Agent or the Purchaser) that any Purchased Receivable was
not an Eligible Receivable on the Purchase Date or that any of the
representations and warranties with respect to such Receivable set forth in
Section 7.1 hereof was untrue with respect to such Receivable as of the
Purchase Date, then unless such breach or other condition shall have been
cured by the last day of any Settlement Period occurring after the discovery
of such breach or other condition, the Seller shall repurchase such Receivable
from the Purchaser on such last day for an amount equal to the Purchase Amount
thereof, which amount shall be remitted on such date by the Seller to the
Servicer to be applied as a Collection in accordance with Article V hereof.
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. The following
rates shall be utilized in calculating the amount of Carrying Costs to be
distributed each Settlement Period out of Collections of Purchased
Receivables:
SECTION 3.1.1. Purchase Discount.
(a) A Purchase Discount equal to the weighted daily
average of the following:
(1) with respect to the aggregate portion of the Investment
on such day which is less than or equal to the Notional Amount of the
Swap Agreement on such day:
(i) the fixed per annum rate of interest payable
by the Purchaser to the Swap Counterparty pursuant to
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the Swap Agreement on such date (as calculated on the
basis of a 360-day year); and
(ii) to the extent the Purchaser funds such
Investment (or any portion thereof) through any Liquidity or
Credit Facilities, (A) with respect to any portion of such
Investment funded by the Purchaser at rates determined by
reference to London interbank offering rate, a per annum
rate equal to thirty-seven and one-half basis points (.375%)
(as calculated on the basis of a 360-day year) or (B) in all
other cases, a per annum rate equal to two hundred and
thirty-three and one-half basis points (2.335%) (as
calculated on the basis of a 365 or 366-day year, as
applicable); and
(2) with respect to the aggregate portion of the Investment
on such day, if any, which is greater than the Notional Amount of the
Swap Agreement on such day:
(i) to the extent the Purchaser funds such
Investment (or any portion thereof) through the issuance of
Commercial Paper Notes, the weighted average of the interest
rates (in the case of interest bearing Commercial Paper
Notes) and discount rates (in the case of Commercial Paper
Notes issued at a discount, such discount rate to be
converted to a yield equivalent rate) on all Commercial
Paper issued by the Purchaser to fund such Investment, in
each case, as determined on the basis of a 360-day year; and
(ii) to the extent the Purchaser funds such
Investment (or any portion thereof) through any Liquidity or
Credit Facilities, the weighted average of the annual
interest rates under such facilities that are applicable to
any such borrowings under such agreements; provided, that,
for purposes of the foregoing, the interest rates applicable
under any Liquidity or Credit Facility shall not exceed (A)
in the case where such borrowings are funded with loans in
respect of which the interest thereon is determined by
reference to the London interbank offering rate (the "LIBO
Rate"), the reserve (for eurocurrency loans and borrowings)
adjusted LIBO Rate quoted by the Agent at such time, plus
.50% per annum and (B) in all other cases, the rate of
interest per annum published on such day (or, if not then
published, on the most recently preceding day) in The Wall
Street Journal as the "Prime Rate" plus 1.00% per annum;
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it being understood that, in any case, (X) the Purchaser shall only fund its
Investment (or any portions thereof) under the Credit or Liquidity Facilities
after a determination by the Purchaser that financing its activities during
such period by issuing Commercial Paper Notes would not be practicable or
cost-efficient or would not be permitted by law or under any contract to
which it is a party and (Y) the Purchaser shall not fund its Investment (or
any portion thereof) under any Liquidity or Credit Facility at the rates
described in clause (1)(ii)(B) or (2)(ii)(B) above unless the Purchaser is
unable for any reason to make borrowings under any such Liquidity or Credit
Facility at a rate of interest determined by reference to the LIBO Rate.
(b) Two Business Days prior to the end of each Settlement
Period, the Administrative Agent shall determine the Purchase Discount
pursuant to (a) above by using the actual Purchase Discount for each day
elapsed in such month and estimating the Purchase Discount for each remaining
day in such month. In addition, the Administrative Agent shall concurrently
notify the Servicer of the actual Purchase Discount for any days during the
immediately preceding Settlement Period with respect to which the Purchase
Discount was estimated, and the difference, if any, between the Carrying Costs
actually paid using the estimated Purchase Discount which would have been paid
had the actual Purchase Discount been available (such differential being the
"Carrying Costs True-up Amount"). If the amount of Carrying Costs paid for
such immediately preceding Settlement Period based upon an estimated Purchase
Discount was less than the amount of Carrying Costs for such Settlement Period
based upon the actual Purchase Discount, the amount of Collections remitted to
the Administrative Agent (for the benefit of the Purchaser) pursuant to clause
(i) of Section 5.4 shall be increased by an amount equal to the Carrying Costs
True-up Amount, or, if the amount of Carrying Costs paid for such immediately
preceding Settlement Period based upon an estimated Purchase Discount was
greater than the amount of Carrying Costs for such Settlement Period based
upon the actual Purchase Discount, the amount of Collections remitted to the
Administrative Agent (for the benefit of the Purchaser) pursuant to clause (i)
of Section 5.4 shall be decreased by an amount equal to the Carrying Costs
True-up Amount.
SECTION 3.1.2. Program Fee. A Program Fee equal to the per
annum rate set forth in the Fee Letter, which fee shall include all annual
expenses, including, but not limited to, legal fees, audit fees, filing and
administrative fees, liquidity and credit enhancement fees, and dealer
commissions.
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SECTION 3.1.3. Servicer Fee. A Servicer Fee in respect of
each Settlement Period, equal to 1.0% per annum (assuming a 30/360 day basis)
of the Aggregate Principal Balance of the Purchased Receivables on the first
day of such Settlement Period, shall be remitted by the Purchaser to the
Servicer. If CFC is acting as the Servicer, then the Servicer shall retain an
amount equal to the Servicer Fee (in full satisfaction of the payment of such
fee to the Servicer) out of amounts required to be remitted by the Servicer in
accordance with Section 5.2.
SECTION 3.2. Interest on Unpaid Amounts. To the extent that
the Seller or Servicer fails to pay when due to the Purchaser or the
Administrative Agent any fee, expense or other amount payable hereunder or
under any Sale Document, interest shall be due and payable on such unpaid
amount, for each day until paid in full, at the rate of 1.00% in excess of the
rate of interest per annum published on such day (or, if not then published,
on the most recently preceding day) in The Wall Street Journal as the "Prime
Rate". Changes in the rate payable hereunder shall be effective on each date
on which a change in the "Prime Rate" is so published.
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4.1. Conditions Precedent to Purchase. The following
conditions must be satisfied before the Purchaser will make the Purchase:
SECTION 4.1.1. Absence of Liens. The Seller shall certify
that all Purchased Receivables, Related Security and all proceeds thereof are
free and clear of any Adverse Claims.
SECTION 4.1.2. Financing Statements. The Administrative
Agent will have received acknowledgment copies of UCC-1 financing statements,
and all other documents reasonably requested by the Administrative Agent or
the Purchaser, to evidence the perfection of the Purchaser's interest in the
Purchased Receivables and the Related Security and the Collections.
SECTION 4.1.3. Schedule of Contracts. The Administrative
Agent will have received the Schedule of Contracts.
SECTION 4.1.4. Seller Resolutions. The Administrative Agent
will have received a certificate of the Seller attesting to:
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(a) the resolutions of the majority interest of the
Seller's members authorizing the execution, delivery and performance by the
Seller of the Sale Documents to be executed by the Seller;
(b) the names and signatures of the officers of the
Seller's members authorized to execute the Sale Documents to be executed by
the Seller; and
(c) the completeness and correctness of the attached
articles of organization and operating agreement of the Seller.
SECTION 4.1.5. Servicer Resolutions. The Administrative
Agent will have received a certificate of the Servicer's Secretary or
Assistant Secretary attesting to:
(a) the resolutions of the Servicer's Board of Directors
(or an executive committee thereof) authorizing the execution, delivery and
performance by the Servicer of the Sale Documents to be executed by the
Servicer;
(b) the names and signatures of the officers of the
Servicer authorized to execute the Sale Documents to be executed by the
Servicer; and
(c) the completeness and correctness of the attached
restated articles of incorporation and by-laws of the Servicer.
SECTION 4.1.6. Legal Opinion of Counsel to the Seller and
the Servicer. The Administrative Agent will have received an opinion from
counsel to the Seller and the Servicer, such counsel being "in-house" counsel
unless otherwise required by any agencies providing a credit rating to the
transaction contemplated hereby, substantially in the form attached hereto as
Exhibit B, together with such other matters as the Administrative Agent or the
Purchaser may reasonably request.
SECTION 4.1.7. Good Standing Certificates. The
Administrative Agent will have received certificates of recent date issued by
the Secretary of State of the State of Michigan, as to the legal existence and
good standing of the Seller and the Servicer.
SECTION 4.1.8. Representations and Covenants. On and as of
the Purchase Date (i) the representations and warranties of the Seller and the
Servicer in Article VII shall be true and correct with the same effect as if
made on such date and (ii) the Seller and the Servicer shall be in compliance
with the covenants set forth in Article VIII. The Seller and the Servicer, by
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accepting the proceeds of such Purchase, shall be deemed to have certified as
to the truth and accuracy of each of the matters described in the foregoing
clauses (i) and (ii), both before and after giving effect to such Purchase.
SECTION 4.1.9. Fee Letter. The Administrative Agent shall
have received a fully executed copy of the Fee Letter.
SECTION 4.1.10. Other Documents. The Administrative Agent
and the Purchaser will have received all other documents that either of them
had reasonably requested from the Seller or the Servicer.
SECTION 4.1.11. Upfront Fee. The Seller shall have paid a
fee (the "Upfront Fee") to the Administrative Agent at Closing in the amount
set forth in the Fee Letter, which fee shall include all upfront expenses,
including but not limited to legal fees, filing and administrative fees,
rating agency fees, liquidity and credit enhancement fees incurred with
respect to the Purchase.
SECTION 4.1.12. Interest Rate Cap and Swap Agreement. The
Administrative Agent shall have received fully executed copies of the Interest
Rate Cap and the Swap Agreement.
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall segregate all
Collections of the Purchased Receivables from other funds of the Servicer and
the Seller within two Business Days of its or their receipt thereof and hold
such Collections in trust for the Purchaser in a separate bank account either
(x) established in the name of the Purchaser or (y) in respect of which the
Purchaser shall have received an agreement (to be in form and substance
satisfactory to the Purchaser and the Administrative Agent) regarding the
pledge and control thereof. Notwithstanding the foregoing, for so long as (i)
CFC remains the Servicer, (ii) no Servicer Default shall have occurred and be
continuing and (iii) CFC maintains a long-term unsecured senior debt rating of
at least "BBB-" by Standard & Poor's Ratings Services and "Baa3" by Moody's
Investors Service, Inc., the Servicer shall neither be required to deliver any
such agreement nor segregate Collections as aforesaid, but shall rather only
be required to remit such Collections with respect to each Settlement Period
to the Administrative Agent (for the benefit of the Purchaser) on the
Settlement Date relating to such Settlement Period.
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SECTION 5.2. Application of Collections. All Collections for
the Settlement Period shall be applied by the Servicer as follows:
(a) With respect to each Receivable (other than a Balloon
Payment), payments by or on behalf of the Obligor shall be applied first, in
the case of Precomputed Receivables, to reduce Outstanding Precomputed
Advances as described in Section 5.3(a) and, in the case of Simple Interest
Receivables, to reduce Outstanding Simple Interest Advances to the extent
described in Section 5.3(b). Next, any excess shall be applied, in the case of
Precomputed Receivables, to the Scheduled Payment and, in the case of Simple
Interest Receivables, to interest and principal in accordance with the Simple
Interest Method. With respect to Precomputed Receivables, to the extent that
the sum of any remaining excess and the Payahead Balance can be applied to
prepay the Precomputed Receivable in full, such remaining excess shall
constitute a full payoff of such Precomputed Receivable (a "Full Payoff"). To
the extent that the sum of any remaining excess, the Payahead Balance and one
payment can be applied to prepay the Precomputed Receivable in full, such
remaining excess shall constitute a partial payoff of such Precomputed
Receivable (a "Partial Payoff"). Otherwise, any such remaining excess payments
shall constitute a Payahead and shall increase the Payahead Balance.
(b) All Liquidation Proceeds with respect to any Balloon
Payment 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 be applied to, or
constitute, the related Balloon Payment.
SECTION 5.3. Advances.
(a) As of the close of business on the last day of each
Settlement Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Balloon Payment) shall be less than the
stated scheduled payment for such month, the Payahead Balance shall be applied
by the Servicer to the extent of the shortfall and such Payahead Balance shall
be reduced accordingly. Next, the Servicer shall advance any remaining
shortfall (such amount, a "Precomputed Advance"), to the extent that the
Servicer, at its sole discretion, shall determine that the Precomputed Advance
shall be recoverable from the Obligor, the Purchase Amount, Liquidation
Proceeds or proceeds of any other Precomputed Receivables. With respect to
each Precomputed Receivable, the Precomputed Advance shall increase
Outstanding Precomputed Advances. Outstanding
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Precomputed Advances shall be reduced by subsequent payments by or on behalf
of the Obligor, collections of Liquidation Proceeds in respect of such
Precomputed Receivables or payments of the Purchase Amount with respect to
such Precomputed Receivables.
If the Servicer shall determine that an Outstanding
Precomputed Advance with respect to any Precomputed Receivable shall not be
recoverable as aforesaid, the Servicer shall be reimbursed from any
collections made on other Purchased Receivables which are Precomputed
Receivables and Outstanding Precomputed Advances with respect to such
Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each
Settlement Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective APR's for
the related Settlement Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Settlement Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advances shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect
to such Simple Interest Receivables attributable to accrued and unpaid
interest thereon (but not including interest for the then current Settlement
Period) shall be paid to the Servicer to reduce Outstanding Simple Interest
Advances, but only to the extent of any Outstanding Simple Interest Advances.
The Servicer shall not make any advance in respect of principal of Simple
Interest Receivables.
SECTION 5.4. Application of Collections on Settlement Dates.
The Servicer will, by 3:00 P.M. (New York time) on each Settlement Date, from
Collections received during or with respect to the preceding Settlement
Period, pay to the Administrative Agent (for the benefit of the Purchaser) and
the Administrative Agent shall distribute such Collections, together with the
amount of any Interest Rate Cap Proceeds and Swap Windfalls received by the
Administrative Agent or the Purchaser with respect to such Settlement Period,
(i) first, an amount equal to the Carrying Costs for the Settlement Period (as
such amount shall be increased or decreased by the Carrying Costs True-up
Amount, if any, for the immediately preceding Settlement Period as
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determined pursuant to Section 3.1.1(b)) and (ii) second, all remaining
Collections as a reduction to Investment.
SECTION 5.5. Servicer Report. The Servicer will provide the
Purchaser, either in writing or electronically, with a Servicer Report with
respect to each Settlement Period no later than 15 days following the end of
such Settlement Period (or, if such 15th day is not a Business Day, the next
succeeding Business Day).
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of Servicer. The
Purchaser and the Seller each hereby appoint CFC as the Servicer and CFC
accepts such appointment. The Servicer, for the benefit of the Purchaser (or
the extent provided herein), shall manage, service, administer, make
collections and discharge liens on the 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. If the Servicer shall commence a legal proceeding to enforce
a Purchased Receivable, the Purchaser shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Purchased
Receivables to the Servicer. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Purchased Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce such Purchased Receivable, the Purchaser shall, at the Servicer's
expense and direction, take steps to enforce such Receivables, including
bringing suit in its name or the name of the Purchaser. The Purchaser 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 6.2. Replacement of Servicer.
(a) If any of the following events (a "Servicer Default")
shall occur and be continuing:
(i) any failure by the Servicer to make any payment or
deposit required to be made hereunder and the continuance of such
failure for a period of five Business Days;
(ii) any representation or warranty made by the Servicer in
Section 7.1 or any information set forth in a Servicer Report or
other certificate delivered to the Administrative Agent or the
Purchaser, shall prove to have
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been incorrect in any material respect when made, which continues to
be incorrect in any material respect for a period of sixty days after
the earlier of the date on which an officer of the Servicer has
actual knowledge thereof and the date on which written notice thereof
has been given to the Servicer requiring the same to be remedied, by
the Purchaser or the Administrative Agent;
(iii) failure on the part of the Servicer to observe or
perform in any material respect any other term, covenant or agreement
in this Agreement or any other Sale Document which continues
unremedied for sixty days after the earlier of the date on which an
officer of the Servicer has actual knowledge of such failure and the
date on which written notice of such failure has been given to the
Servicer requiring the same to be remedied, by the Purchaser or the
Administrative Agent; or
(iv) an Insolvency Event with respect to the Seller or the
Servicer;
then, so long as such Servicer Default shall not have been remedied ,the
Purchaser shall have the right to remove CFC (or any successor Servicer) as
Servicer by giving written notice thereof to the Servicer. On and after
receipt of such written notice, all authority and power of the Servicer under
this Agreement shall, without further action, pass to and be vested in such
successor Servicer as may be appointed by the Purchaser provided, however,
that Servicer cannot be removed until a successor Servicer is selected and
appointed and such successor Servicer meets industry-wide standards for being
a Servicer of retail automotive receivables.
(b) If CFC is removed as Servicer, CFC shall transfer to any
successor Servicer designated by the Purchaser all records, correspondence and
documents (including computer software) requested by the Purchaser or such
successor Servicer and permit such Persons to have access to, and to copy, all
software used by the Servicer in the collection, administration or monitoring
of the Purchased Receivables. In the case of software that is then licensed
by, or otherwise made available to, the Servicer from or by any third party,
the Servicer shall use its best efforts to obtain such consents and otherwise
take all actions necessary in order to enable any Servicer hereunder to
succeed to all rights of CFC to the quiet use and enjoyment of such software
for the purpose of discharging the obligations of the Servicer under or in
connection with the Sale Documents.
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(c) Following the removal of CFC as Servicer, (i) the
Purchaser and the Administrative Agent may (a) notify Obligors of the
ownership interest of the Purchaser hereunder in the Purchased Receivables and
the Related Security, (b) notify each issuer of an Insurance Policy of the
ownership interest of the Purchaser hereunder in the Purchased Receivables and
in the Related Security (including the applicable Financed Vehicle and the
Insurance Policy thereon), and (c) direct the Seller to, whereupon the Seller
immediately shall, note the interest of the Purchaser hereunder on each
Certificate of Title relating to each Financed Vehicle and (ii) the Purchaser
shall have, in addition to all other rights and remedies under this Agreement
or otherwise, all other rights and remedies provided under the Uniform
Commercial Code of the applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
SECTION 6.3. Custody of Receivables Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Purchaser and the Seller hereby irrevocably appoint the Servicer, and the
Servicer hereby accepts such appointment, to act for the benefit of the
Purchaser and the Seller as custodian of the following documents or
instruments which are hereby or will hereby be constructively delivered to the
Purchaser, as pledgee of the Seller, as of the Closing Date with respect to
each Purchased Receivable (the "Receivables Files"):
(a) the fully executed original of the Contract related to
such Purchased 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 Purchased Receivable, an Obligor or a
Financed Vehicle.
SECTION 6.4. Duties of Servicer as Custodian. The Servicer
shall hold the Receivables Files as custodian for the benefit of the Seller
and the Purchaser and maintain such accurate and complete accounts, records
and computer systems pertaining to each Receivables File as shall enable the
Seller to
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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 Receivables Files relating to all
comparable automotive receivables that the Servicer services for itself or
others.
SECTION 6.5. Effective Period and Termination. The
Servicer's appointment as custodian shall become effective as of the Cut-Off
Date and shall continue in full force and effect until terminated pursuant to
this Section. If CFC shall cease to be Servicer in accordance with the
provisions of this Agreement, the appointment of such Servicer as custodian
shall be terminated by the Purchaser. The Purchaser may terminate the
Servicer's appointment as custodian at any time following the occurrence of a
Servicer Default under Section 6.2(a) upon thirty days written notification to
the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivables Files to the
Administrative Agent or to any other Person designated by the Administrative
Agent at a place or places as the Administrative Agent or such other Person
may reasonably designate.
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Seller
and the Servicer. Each of the Seller and the Servicer makes, with respect to
itself, the following representations and warranties to the Purchaser:
(a) It is a limited liability company or corporation, as
applicable, duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation and is duly qualified in good standing as a foreign corporation
or limited liability company in each jurisdiction where the failure to be so
qualified could materially adversely affect its ability to perform its
obligations hereunder.
(b) The execution, delivery and performance by the Seller
and the Servicer of the Sale Documents to which it is a party, and the
Seller's use of the proceeds of the Purchase, are, in each case, within the
Seller's and the Servicer's respective corporate powers, have been duly
authorized by all necessary corporate action, do not contravene (i) the
Seller's or the Servicer's respective articles of organization or charter, as
applicable, or operating agreement or by-laws, as applicable, or (ii) any law,
rule or regulation or any contractual restriction binding on or affecting the
Seller or the Servicer, and do not
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result in or require the creation of any Adverse Claim (other than pursuant to
this Agreement) upon or with respect to any of its properties; and no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller or the
Servicer of the Sale Documents, or for the perfection of or the exercise by
the of its rights and remedies under the Sale Documents, except for the filing
of the financing statements referred to in Section 4.1.2.
(d) Each Sale Document constitutes the legal, valid and
binding obligation of the Seller and the Servicer, respectively, enforceable
in accordance with its terms.
(e) There is no pending or threatened action or proceeding
affecting the Seller or the Servicer or any of its subsidiaries before any
court, governmental agency or arbitrator which may materially adversely affect
(i) its financial condition or operations or (ii) its ability to perform its
obligations under the Sale Documents, or which could affect the legality,
validity or enforceability of any Sale Document or of the interests of the
Purchaser in the Purchased Receivables.
(f) The Seller is the legal and beneficial owner of the
Receivables, the Related Security and Collections, free and clear of any
Adverse Claim, except as created by this Agreement; upon consummation of the
Purchase, the Purchaser will acquire a valid and perfected first priority
ownership interest in the Purchased Receivable and in the Related Security and
the Collections with respect thereto, free and clear of any Adverse Claim
except as created by this Agreement.
(g) The information provided by the Seller to the Servicer
for use in each Servicer Report prepared under Section 5.5 and all information
and Sale Documents furnished or to be furnished at any time by the Seller to
the Administrative Agent in connection with this Agreement is or will be
accurate in all material respects as of its date, and no such document will
contain any untrue statement of a material fact or will omit to state a
material fact which is necessary to make the facts stated therein not
misleading.
(h) The Seller is treating the conveyance of the interest in
the Purchased Receivables and the Collections under this Agreement to the
Purchaser as a sale for purposes of generally accepted accounting principles.
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ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due to
the Purchaser hereunder have been paid in full, each of the Seller and the
Servicer (with respect to itself) will, unless the Administrative Agent and
the Purchaser have each otherwise consented in writing:
(a) Maintain its existence in the jurisdiction of its
organization or incorporation and qualify and remain qualified in good
standing as a foreign corporation or limited liability company in each
jurisdiction where the failure to be so qualified could materially adversely
affect its ability to perform its obligations hereunder.
(b) Maintain and implement administrative and operating
procedures, and keep and maintain all records and other information,
reasonably necessary or advisable for the collection of the Purchased
Receivables (including, without limitation, records adequate to permit the
daily identification of Purchased Receivables and all Collections and
adjustments to Purchased Receivables).
(c) At its expense timely and fully perform and comply with
all material provisions and covenants required to be observed by CFC or the
Seller under the Contracts related to the Purchased Receivables.
(d) Comply in all material respects with the Credit and
Collection Policy in regard to each Purchased Receivable and any Contract
related to such Receivable.
(e) Treat the conveyance of the interest in the Purchased
Receivables and the Collections under this Agreement as a sale for purposes of
generally accepted accounting principles.
SECTION 8.2 Reporting Requirements of the Servicer. Until
the Investment is reduced to zero and all amounts due to the Purchaser
hereunder have been paid in full, the Servicer will, unless the Purchaser
shall otherwise consent in writing, furnish to the Purchaser:
(a) the Servicer Report as required under Section 5.5;
(b) as soon as possible, and in any event within thirty days
shall describe such event or condition and, if applicable, the steps being
taken with respect thereto by the
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Person(s) affected thereby, of: (i) the occurrence of any Servicer Default or
event which with the passage of time or the giving of notice or both would
constitute a Servicer Default or (ii) the institution of any litigation,
arbitration proceeding or governmental proceeding which could be reasonably
likely to have a material adverse effect on the performance by the Servicer of
its obligations under this Agreement or the other Sale Documents or the
collectibility of the Purchased Receivables; and
(c) such other information, documents, records or reports
respecting the Purchased Receivables or the condition or operations, financial
or otherwise, of the Servicer or the Seller as the Purchaser may from time to
time reasonably request.
SECTION 8.3. Negative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due to
the Purchaser hereunder have been paid in full, neither the Seller nor the
Servicer will, unless the Purchaser has otherwise consented in writing:
(a) Except as provided herein, sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to any Purchased Receivables, the Related
Security or any Collections or assign any right to receive income in respect
thereof; or
(b) Amend or otherwise modify the terms of any Purchased
Receivable, or amend or otherwise modify any term or condition of any Contract
related thereto, in each case, in any manner which is inconsistent with the
Credit and Collection Policy.
SECTION 8.4. Protection of the Purchaser's Interest
(a) Until the Investment is reduced to zero and all other
amounts due to the Purchaser hereunder have been paid in full, each of the
Seller and the Servicer agrees that from time to time, at its expenses, it
will promptly execute and deliver all instruments and documents and take all
action that the Administrative Agent or the Purchaser may from time to time
reasonably request in order to perfect, evidence and protect the validity,
enforceability, perfection and priority of the Purchaser's interests in the
Purchased Receivables, the Related Security and the Collections and to enable
the Administrative Agent and/or Purchaser to exercise or enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the Seller
and the Servicer will: (i) on or prior to the date hereof, mark its master
data processing records with a legend
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<PAGE>
describing the Purchaser's interests therein; and (ii) upon the request of the
Administrative Agent or the Purchaser, execute and file such financing or
continuation statements or amendments thereto or assignments thereof as may be
requested by the Administrative Agent or the Purchaser; provided, however,
that the Seller is not required to deliver the Contracts to anyone other than
the Servicer;
(b) To the fullest extent permitted by applicable law, the
Administrative Agent shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the Seller's
signature. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement.
ARTICLE IX: ADMINISTRATIVE AGENT
SECTION 9.1. Appointment of Administrative Agent. The
Purchaser has appointed Union Bank of Switzerland, New York Branch as its
Administrative Agent. The Administrative Agent is responsible for
administering and enforcing this Agreement and fulfilling all other duties
expressly assigned to it in this Agreement. The Purchaser has granted the
Administrative Agent the authority to take all actions necessary to assure the
Seller's and the Servicer's compliance with the terms of this Agreement and
the other Sales Documents and to take all actions required or permitted to be
performed by the Purchaser under this Agreement or the other Sales Documents.
SECTION 9.2. Replacement of Administrative Agent. The
Purchaser may, at any time in its discretion, remove an Administrative Agent
and appoint a new Administrative Agent, which shall have the duties described
in Section 9.1.
ARTICLE X: MISCELLANEOUS
SECTION 10.1. Amendments, Etc. No amendment or waiver of, or
consent to the Seller's or the Servicer's departure from, any provision of
this Agreement shall be effective unless it is in writing and signed by the
parties hereto and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which is was
given.
SECTION 10.2. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein,
be in writing (including photocopy, facsimile,
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<PAGE>
electronic mail or other digital communication) and sent, as to each party
hereto, at its address set forth under its name on the signature pages hereto,
or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
be effective when sent.
SECTION 10.3. No Waiver; Remedies. No failure on the part of
the Purchaser to exercise, and no delay in exercising, any right hereunder or
under any Sale Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 10.4. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Servicer, the Purchaser, the Administrative Agent
and their respective successors and assigns, except that the Seller shall not
have the right to assign any interest herein without the prior written consent
of the Administrative Agent. So long as prior written notice thereof shall
have been delivered to the Seller, the Purchaser may assign any of its rights
or obligations hereunder to any Person.
(b) This Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as the Investment is
reduced to zero and all other amounts due to the Purchaser hereunder have been
paid in full; provided, however, that the rights and remedies to the Purchaser
under Section 10.10 and the provisions of Section 10.7 shall, in each case,
survive any termination of this Agreement.
SECTION 10.5. GOVERNING LAW. THIS AGREEMENT AND THE SALE
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
SECTION 10.6. Construction of the Agreement. The parties
hereto intend that the conveyance of the interest in the Purchased Receivables
by the Seller to the Purchaser shall be treated as sales for purposes of
generally accepted accounting principles. If, despite such intention, a
determination is made that such transactions shall not be treated as sales,
then this Agreement shall be interpreted to constitute a security agreement
and the transactions effected hereby shall be deemed to constitute a secured
financing by the Purchaser to the Seller under applicable law. For such
purpose, the Seller hereby grants
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<PAGE>
the Purchaser a continuing security interest in the Purchased Receivables and
the Related Security and Collections related thereto to secure the obligation
of the Seller to the Purchaser hereunder.
SECTION 10.7. No Proceedings. The Seller, the Administrative
Agent and the Servicer each hereby agrees that it will not institute, or join
any other Person in instituting, against the Purchaser any bankruptcy,
reorganization, insolvency or similar proceeding until the date which is one
year and one day after the last day upon which any Commercial Paper Notes or
other financial securities issued by the Purchaser shall have been
outstanding.
SECTION 10.8. Confidentiality. The Purchaser and the
Administrative Agent each hereby agrees to maintain the confidentiality of any
information regarding the Seller and the Servicer obtained in accordance with
the terms of this Agreement which is not publicly available, but the Purchaser
and the Administrative Agent may, with advance notice to the Seller and the
Servicer, reveal such information (a) to its and its managers',
administrators' and trustees' employees, officers, and directors who have a
need to know and to each of the foregoing's accountants, attorneys and
advisors to the extent they are made aware of the confidential nature thereof
and the terms of this Section 10.8, (b) to applicable rating agencies,
liquidity providers and credit providers, (c) as necessary or appropriate in
connection with the administration or enforcement of this Agreement or its
funding of the Purchase under this Agreement, (d) as required by law,
government regulation, court proceeding or subpoena, or (d) to bank regulatory
agencies or examiners.
SECTION 10.9. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
SECTION 10.10. Indemnification by Seller. Without limiting
any other rights which the Purchaser, the Administrative Agent and any of the
respective officers, directors, employees, agents and affiliates of any of the
foregoing may have hereunder or under applicable law, the Seller hereby
indemnifies such parties and holds them harmless from and against any and all
damages, losses, claims, liabilities and related costs and expenses (including
attorneys' fees and disbursements) incurred by any of them arising out of or
resulting from this Agreement or the purchase by the Purchaser of any interest
in the Purchased
-32-
<PAGE>
Receivables or the Related Security and Collections related thereto,
including, without limitation:
(a) the return or transfer by the Servicer of any portion
of Collections to the Seller or any other Person for any reason whatsoever; or
(b) any warranty or products liability claim allegedly
arising out of or in connection with merchandise or services which are the
subject of, or were financed with the proceeds of, any Contract under which
any of the Purchased Receivables arise, including, without limitation, any use
or misuse by any Person of any Financed Vehicle (including, without
limitation, any use involving the handling or disposition of any hazardous
substance or waste material).
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their duly authorized officers as of the date set forth on the
cover page of this Agreement.
PREMIER RECEIVABLES L.L.C.
as Seller
By: s/s David H. Olsen
--------------------------------
Title: Assistant Treasurer
of Premier Auto Receivables Company,
a Member of the Seller
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
CHRYSLER FINANCIAL CORPORATION
as Servicer
By: s/s David H. Olsen
-----------------------------------
Title: Assistant Treasurer
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
MONTE ROSA CAPITAL CORPORATION, as
Purchaser
By: UNION BANK OF SWITZERLAND, NEW YORK
BRANCH, its attorney-in-fact
By: s/s Daniel Gringuaz
----------------------------
Title: Assistant Vice President
By: s/s Rolf Ruegg
----------------------------
Title: Assistant Vice President
S-1
<PAGE>
Address:
c/o Union Bank of Switzerland,
New York Branch
299 Park Avenue, 38th Floor
New York, New York 10171
Attn: Asset Securitization Group -
James F. Moore
Telephone No.: 212/821-3294
Telecopier No.: 212/821-3890
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH, as Administrative
Agent
By: s/s Daniel Gringuaz
--------------------
Title: Assistant Vice President
By: s/s Rolf Ruegg
----------------
Title: Assistant Vice President
Address:
299 Park Avenue, 38th Floor
New York, New York 10171
Attn: Asset Securitization Group -
James F. Moore
Telephone No.: 212/821-3294
Telecopier No.: 212/821-3890
S-2
Exhibit 10-UUUU
- ------------------------------------------------------------------------------
RECEIVABLES SALE AGREEMENT
Dated as of December 12, 1996
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
OLD LINE FUNDING CORP.
as Purchaser
and
ROYAL BANK OF CANADA
as Agent
- ------------------------------------------------------------------------------
<PAGE>
[Chrysler Receivables Sale Agreement]
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE I: DEFINITIONS..........................................................1
ARTICLE II: THE SALE AND PURCHASE..............................................14
SECTION 2.1. Sale and Purchase.....................................14
SECTION 2.2. Purchase Price........................................15
SECTION 2.3. Seller's Optional Termination.........................15
ARTICLE III: FEES AND EXPENSES.................................................15
SECTION 3.1. Determination of Carrying Costs.......................16
SECTION 3.1.1. Purchase Discount.....................................16
SECTION 3.1.2. Servicer Fee..........................................17
SECTION 3.2. Interest on Unpaid Amounts............................18
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE...................................18
SECTION 4.1. Conditions Precedent to Purchase......................18
SECTION 4.1.1. Absence of Liens......................................18
SECTION 4.1.2. Financing Statements..................................18
SECTION 4.1.3. Schedule of Contracts.................................18
SECTION 4.1.4. Seller Resolutions....................................18
SECTION 4.1.5. Servicer Resolutions..................................19
SECTION 4.1.6. Legal Opinion of Counsel to the Seller
and the Servicer......................................19
SECTION 4.1.7. Good Standing Certificates............................19
SECTION 4.1.8. Representations and Covenants.........................19
SECTION 4.1.9. Other Documents.......................................20
SECTION 4.1.10. Upfront Fee...........................................20
ARTICLE V: SETTLEMENT PROCEDURES.............................................. 20
SECTION 5.1. Collections...........................................20
SECTION 5.2. Application of Collections............................20
SECTION 5.3. Advances..............................................21
SECTION 5.4. Application of Collections on Settlement Dates........22
SECTION 5.5. Servicer Report.......................................23
i
<PAGE>
[Chrysler Receivables Sale Agreement]
SECTION 5.6. Repurchase Obligations................................23
ARTICLE VI: SERVICING OF RECEIVABLES...........................................23
SECTION 6.1. Appointment and Duties of Servicer....................23
SECTION 6.2. Replacement of Servicer...............................24
SECTION 6.3. Custody of Receivable Files...........................26
SECTION 6.4. Duties of Servicer as Custodian.......................26
SECTION 6.5. Effective Period and Termination......................27
ARTICLE VII: REPRESENTATIONS AND WARRANTIES....................................27
SECTION 7.1. Representations and Warranties of the
Seller and the Servicer...............................27
ARTICLE VIII: COVENANTS........................................................29
SECTION 8.1. Affirmative Covenants of the Seller and
the Servicer..........................................29
SECTION 8.2. Reporting Requirements of the Servicer................30
SECTION 8.3. Negative Covenants of the Seller and the Servicer.....30
SECTION 8.4. Protection of the Purchaser's Interest................31
ARTICLE IX: AGENT .............................................................32
SECTION 9.1. Appointment of Agent..................................32
ARTICLE X: MISCELLANEOUS.......................................................32
SECTION 10.1. Amendments, Etc........................................32
SECTION 10.2. Notices, Etc...........................................32
SECTION 10.3. No Waiver; Remedies....................................32
SECTION 10.4. Binding Effect; Assignability..........................33
SECTION 10.5. Governing Law..........................................33
SECTION 10.6. Construction of the Agreement..........................33
SECTION 10.7. No Proceedings.........................................34
SECTION 10.8. Confidentiality........................................34
SECTION 10.9. Execution in Counterparts..............................34
SECTION 10.10. Indemnification by Seller of Investors, etc............34
</TABLE>
ii
<PAGE>
[Chrysler Receivables Sale Agreement]
EXHIBITS
EXHIBIT A - Form of Servicer Report
EXHIBIT B - Form of Opinion of Counsel
iii
<PAGE>
RECEIVABLES SALE AGREEMENT, dated as of December 12, 1996,
among PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as the
"Seller", CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer", OLD LINE FUNDING CORP., a Delaware corporation, as the
"Purchaser" and ROYAL BANK OF CANADA, a Canadian chartered bank acting through
its New York Branch, as the "Agent" for the Investors.
ARTICLE I: DEFINITIONS
"Advance" means either a Precomputed Advance or Simple
Interest Advance or both, as applicable.
"Adverse Claim" means any mortgage, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(consensual, statutory or other), charge, security arrangement, or any other
encumbrance or other right or claim in, of or on any Person's assets or
properties in favor of any other Person, of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic
effect as any of the foregoing).
"Agent" means Royal Bank of Canada, a Canadian chartered
bank acting through its New York Branch, and any successor or assign thereof
under Section 9.1.
"Agreement" means this Receivables Sale Agreement, as it may
be amended from time to time.
"Aggregate Principal Balance" means, at any time, the
aggregate Principal Balance of all Purchased Receivables at such time.
"Amount Financed" means (i) with respect to any Receivable
that is not a Balloon Payment Receivable, the amount advanced under such
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
<PAGE>
[Chrysler Receivables Sale Agreement]
insurance covering the Financed Vehicle; and (ii) with respect to a Balloon
Payment Receivable, an amount equal to the present value of the fixed level
payment monthly installments (not including the amount designated as the
Balloon Payment) under the Balloon Payment 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 Balloon Payment Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
"Balloon Payment" means, for any Receivable, the dollar
amount of any payment which is not a level monthly payment (other than the
first or last payment made on the Receivable which is minimally different from
the other level payments).
"Balloon Payment Program" means a retail installment sale
program in which the final payment is a Balloon Payment and the Balloon
Payment may be made by the Obligor by (i) payment in full in cash of the
Balloon Payment, (ii) return of the Financed Vehicle to the Servicer in lieu
of paying the Balloon Payment in cash provided that certain conditions are
satisfied or (iii) refinancing the Balloon Payment in accordance with certain
conditions.
"Balloon Payment Receivable" means any Contract listed on
the Schedule of Contracts 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 Balloon Payment, (ii) return of the
Financed Vehicle to the Servicer provided certain conditions are satisfied or
(iii) refinancing the Balloon Payment in accordance with certain conditions.
"Business Day" means any day other than a day on which banks
are not authorized to be open or required to be closed in New York City.
2
<PAGE>
[Chrysler Receivables Sale Agreement]
"Carrying Costs" means, for each Settlement Period, an amount
equal to the sum of:
(i) (PD + PF) x DSP x AI
---
360
plus
(ii) SF x DSP x APB
---
360
where PD = Purchase Discount
PF = Program Fee
SF = Servicer Fee
DSP = the number of days in
such Settlement Period
AI = the average daily
Investment for such
Settlement Period
APB = the average daily
Aggregate Principal
Balance for such
Settlement Period.
"Carrying Costs True-up Amount" has the meaning assigned to
that term in Section 3.1.1.
"Certificate of Title" means any certificate, instrument or
other document issued by a state or other governmental authority in respect of
any motor vehicle for the purpose of evidencing the ownership of, or any
Adverse Claim in or against, such motor vehicle.
"CFC" means Chrysler Financial Corporation, a Michigan
corporation.
3
<PAGE>
[Chrysler Receivables Sale Agreement]
"Collection" means any amount paid by an Obligor or any
other party with respect to a Purchased Receivable, including Liquidation
Proceeds.
"Collection Period" means a calendar month, or, in the case
of the initial Collection Period, the period beginning on the Cut-off Date and
ending on the last day of December, 1996.
"Contract" means, with respect to any Receivable, any and
all instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidence such Receivable.
"Credit and Collection Policy" means the credit and
collection policies and practices of the Servicer and any successor Servicer
relating to Receivables and Contracts, such policies being subject to
unilateral revision or modification at any time by the Servicer or successor
Servicer.
"Credit Facilities" means each of the committed loan
facilities, lines of credit, letters of credit and other forms of credit
enhancement available to the Purchaser which are not Liquidity Facilities.
"Cut-Off Date" means December 5, 1996.
"Dealer" means an automobile or light-duty truck dealership
located within the United States at or through which a Financed Vehicle shall
have been purchased or is proposed to be purchased.
"Delinquency Ratio" means, as of the last calendar day of
any month, a fraction, expressed as a percentage, the numerator of which is
the sum of the Principal Balances of all Receivables which were Delinquent
Receivables as of the last calendar day of such month and the last calendar
day of each of the two immediately preceding months, to the extent such
preceding months exist, and the denominator of which is the sum of the
Aggregate Principal Balance on such last calendar day of such month and on the
last calendar day of each of the two immediately preceding months, to the
extent such preceding months exist.
4
<PAGE>
[Chrysler Receivables Sale Agreement]
"Delinquent Receivable" means any Receivable which has 10%
or more of a scheduled payment past due for more than 60 days.
"Designated Account" means an account in the name of and
owned by the Agent, designated by the Agent in a writing delivered to the
Seller pursuant to the provisions of Section 5.1, for the purpose of receiving
Collections of Purchased Receivables.
"Eligible Receivable" means, as of the Cut-Off Date, any
Receivable:
(i) the Obligor of which (a) is a resident of the United
States and (b) is not an affiliate of the originating Dealer or any
of the parties hereto,
(ii) the Obligor of which (a) is not the Obligor of any
Receivable which has 10% or more of a scheduled payment past due for
more than 60 days and (b) is not the subject of any bankruptcy,
insolvency or reorganization proceeding or any other proceeding
seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial
part of its property,
(iii) which is "chattel paper" within the meaning of Section
9-105 of the UCC of all applicable jurisdictions,
(iv) which is denominated and payable only in United States
dollars in the United States,
(v) which (a) has been originated in the United States by a
Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business and (b) satisfies all applicable
requirements of the Credit and Collection Policy,
(vi) which arises under a Contract (a) which, together with
such Receivable, is (1) in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms, and
(2) subject to no dispute, offset,
5
<PAGE>
[Chrysler Receivables Sale Agreement]
counterclaim or other defense, and (b) with respect to which (x) no
default, breach, violation, or event permitting acceleration under
the terms thereof has occurred and (y) there has not arisen any
condition that, with notice or lapse of time or both, would
constitute a default, breach, violation or event permitting
acceleration under the terms thereof,
(vii) which, together with the related Contract, (a) is
secured by a perfected, valid, subsisting and enforceable first
priority security interest in favor of CFC in the related Financed
Vehicle, (b) contains customary and enforceable provisions such that
the rights and remedies of the holder of such security interest are
adequate for realization against the collateral of the benefits of
the security, and (c) was originated and transferred to the Seller
without any conduct constituting fraud or misrepresentation on the
part of the applicable Dealer, CFC or the Seller,
(viii) which, together with the related Contract,
immediately following the execution of such Contract, was purchased
by (and the originating Dealer has validly assigned all of its right,
title and interest therein to) CFC, which, in turn, has sold such
Receivable to the Seller, and such purchase and assignment of such
Receivable, such Contract and the Related Security to CFC is
expressly contemplated in such Contract,
(ix) which, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating
to usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no part of the Contract
related thereto is in violation of any such law, rule or regulation,
(x) the Financed Vehicle securing which (a) is free and
clear of any Adverse Claim other than the security interest therein
then being assigned by the Seller to the Agent for the benefit of the
Investors, and no enforcement action, whether by repossession or
otherwise, has been taken with respect to such Financed Vehicle, and
(b) is covered by the Required Insurance in respect of such Financed
Vehicle, and such Required Insurance
6
<PAGE>
[Chrysler Receivables Sale Agreement]
is in full force and effect, and the proceeds of the Required
Insurance has been assigned to the Seller and such proceeds are fully
assignable to the Agent, for the benefit of the Investors,
(xi) as to which the Agent has not notified the Seller that
such Receivable or class of Receivables is not acceptable as an
Eligible Receivable, including, without limitation, because such
Receivable arises under a Contract that is not acceptable,
(xii) with respect to the outstanding balance thereof, (a)
the related Contract requires that payment in full of such
outstanding balance is scheduled to be made (1) not earlier than five
months after, and (2) not later than 60 months after the date any
interest therein is purportedly transferred to the Agent for the
benefit of the Investors hereunder and (b) such outstanding balance
is scheduled to be paid in equal consecutive monthly installments,
unless such Receivable arises under a Balloon Payment Program, and
(xiii) which Receivable bears interest at the per annum rate
stated on the face of the related Contract, which per annum rate
remains fixed during the term of such Receivable and accrued interest
on such Receivable is payable monthly, in arrears.
"Fee Agreement" means the agreement, dated as of the date
hereof, between the Agent and the Seller with respect to fees paid in
connection with this Agreement.
"Finance Charges" means, with respect to any Receivable and
its related Contract, any finance, interest or similar charges owing by an
Obligor pursuant to such Contract, including, without limitation, any charge
payable in connection with any extension or adjustment under such Contract
(without regard to whether any such extension or adjustment is permitted under
the terms of this Agreement).
7
<PAGE>
[Chrysler Receivables Sale Agreement]
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the applicable Contract.
"Full Payoff" has the meaning assigned to that term in
Section 5.2.
"Hedging Proceeds" means any amount payable by CFC to the
Agent under a swap confirmation. An interest rate cap confirmation, dated as
of December 12, 1996, as the same may be amended.
"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.
"Insurance Policy" means (i) any comprehensive and
collision, fire, theft or other insurance policy maintained by an Obligor in
which the Servicer is named as loss payee with respect to one or more Financed
Vehicles, and (ii) any credit, life or disability insurance maintained by an
Obligor in connection with any Contract.
8
<PAGE>
[Chrysler Receivables Sale Agreement]
"Investment" means the aggregate amount of cash paid by the
Purchaser to the Seller for the Purchase, less the amount of all Collections
received and applied as reductions of Investment pursuant to Article V.
"Investor" means the Purchaser and all other owners by
assignment or otherwise of a Receivable (originally purchased by the
Purchaser) or any interest therein and, to the extent of the undivided
interests so purchased, shall include any participants.
"Liquidated Receivable" means any Receivable liquidated by
the Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidity Facilities" means each of the loan facilities,
asset purchase agreements, lines of credit and other financial accommodations
available to the Purchaser to support the liquidity of the Purchaser's
commercial paper notes and medium term notes.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the monies collected in respect thereof, from whatever source, 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.
"Net Loss" for a month means the sum of the Aggregate
Principal Balance of all Purchased Receivables which are deemed to be
uncollectible for such month, minus any Liquidation Proceeds received during
such month, plus any losses resulting from disposition expenses paid during
such month.
"Net Loss Ratio" means, as of the last day of any month, a
fraction, expressed as a percentage, the numerator of which is the product of
(i) the sum of the Net Loss for such month and the two immediately preceding
months, to the extent such months exist, and (ii) a factor of 12 divided by
the number of months included in the sum in clause (i), and the denominator of
which is the average of the Aggregate Principal Balance on the first day of
the month and the first day of the two immediately preceding months, to the
extent such months exist.
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[Chrysler Receivables Sale Agreement]
"Obligor" means any Person which is obligated to make
payment on a Receivable.
"Outstanding Precomputed Advances" on the Precomputed
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Precomputed Advances as reduced as provided in
Section 5.3(a).
"Outstanding Simple Interest Advances" on the Simple
Interest Receivables means the sum, as of the close of business on the last
day of a Collection Period, of all Simple Interest Advances as reduced as
provided in Section 5.3(b).
"Partial Payoff" has the meaning assigned to that term
in Section 5.2.
"Payahead" on a Receivable that is a Precomputed Receivable
means the amount, as of the close of business on the last day of a Collection
Period, computed in accordance with Section 5.2 with respect to such
Receivable.
"Payahead Balance" on a Receivable that is a Precomputed
Receivable means the sum, as of the close of business on the last day of a
Collection Period, of all Payaheads made by or on behalf of the Obligor with
respect to such Precomputed Receivable, as reduced by applications of previous
Payaheads with respect to such Precomputed Receivable pursuant to Sections 5.2
and 5.3.
"Person" means any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Precomputed Advance" means the amount, as of the close of
business on the last day of a Collection Period, which the Servicer is
required to advance on the related Precomputed Receivables pursuant to Section
5.3(a).
"Precomputed Receivable" means any Receivable under which
the portion of a payment allocable to earned interest (which may be referred
to in the
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[Chrysler Receivables Sale Agreement]
related Contract as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances or the
sum of monthly balances or any equivalent method or which is a monthly
actuarial receivable.
"Principal Balance" means with respect to any Receivable the
outstanding principal balance thereof determined in accordance with the Credit
and Collection Policy and the Servicer's customary calculation methods,
provided, that with respect to a Receivable identified as a Balloon Payment
Receivable, the Principal Balance shall not include the Balloon Payment.
"Program Fee" means the fee specified as such in the Fee
Agreement which shall include all annual expenses, including but not limited
to legal fees, audit fees, filing and administrative fees, liquidity and
credit enhancement fees and dealer commissions.
"Purchase" has the meaning assigned to that term in Section
2.1.
"Purchase Date" means the date on which the conditions
precedent to the Purchase described in Section 4.1 have been satisfied or
waived.
"Purchase Discount" has the meaning assigned to that term in
Section 3.1.1.
"Purchased Receivable" means an Eligible Receivable arising
under a Contract listed on the Schedule of Contracts delivered to the Agent
prior to the Purchase Date being sold to the Purchaser under this Agreement.
"Purchaser" means Old Line Funding Corp. and any successor
or assign of the Purchaser that is a receivables investment company which in
the ordinary course of its business issues commercial paper or other
securities to fund its acquisition and maintenance of receivables.
"Receivable" means the indebtedness and other obligations of
an Obligor arising under a Contract, whether such indebtedness or other
obligations constitute accounts, chattel paper, instruments or general
intangibles, and
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[Chrysler Receivables Sale Agreement]
including, without limitation, the obligation to pay any Finance Charges with
respect thereto.
"Receivables Files" means the documents specified in Section
6.3.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed Vehicle,
the financing of the purchase of which gave rise to such Receivable,
including, without limitation, all of the Seller's right, title and
interest in and to the proceeds of the Insurance Policies, and all
warranties, indemnities, service obligations and other contract
rights issued or granted by, or otherwise existing under applicable
law against, the manufacturer or Dealer in respect of such Financed
Vehicle,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure
payment of such Receivable, whether pursuant to the Contract related
to such Receivable, or otherwise, together with all financing
statements signed by an Obligor describing any collateral securing
such Receivable, and including, without limitation, all security
interests or liens, and property subject thereto, granted by any
Person (whether or not the primary Obligor on such Receivable) under
or in connection therewith,
(iii) all books, records and other information relating to such
Receivable, including, without limitation, all Contracts,
(iv) all service contracts and other contracts and
agreements relating to such Receivable, and
(v) all proceeds of any of the foregoing.
"Required Insurance" means an Insurance Policy with respect
to a Financed Vehicle (i) that has been issued to the Obligor by an insurance
company acceptable to the Servicer, (ii) that provides comprehensive
collision, fire, theft and other physical damage coverage, (iii) that is in an
amount not less than the
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[Chrysler Receivables Sale Agreement]
market value of the applicable Financed Vehicle, and (iv) that has the
Servicer noted as the loss payee thereon.
"Reserve" means an amount equal to 5.5% of the Investment as
of the Purchase Date.
"Sale Documents" means this Agreement, the Fee Agreement,
the Exhibits hereto to which the Seller is a party and all other certificates,
instruments, agreements and documents executed from time to time by the Seller
in connection with the transactions contemplated in this Agreement.
"Scheduled Payment" means the required monthly payment
arising from a Contract for a Precomputed Receivable.
"Schedule of Contracts" means the list of Contracts
delivered to the Agent, such list being in microfiche, paper or electronic
format.
"Seller" means Premier Receivables L.L.C., a Michigan
limited liability company, and its successors and permitted assigns.
"Servicer" means CFC or any replacement thereof under
Article VI.
"Servicer Default" has the meaning assigned to that term in
Section 6.2.
"Servicer Fee" has the meaning assigned to the term in
Section 3.1.3.
"Servicer Report" means the report in the form of Exhibit A
hereto to be provided by the Servicer in accordance with Section 5.5 of this
Agreement, which report shall include a calculation of the Delinquency Ratio
and the Net Loss Ratio for the applicable month.
"Settlement Date" means the 20th day of each month following
a related Settlement Period (or if such 20th day is not a Business Day, the
next succeeding Business Day).
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[Chrysler Receivables Sale Agreement]
"Settlement Period" means a calendar month, provided, that,
for purposes of the initial Settlement Period, such period shall commence as
of the Cut-Off Date and end on December 31, 1996.
"Simple Interest Advance" means the amount of interest, as
of the close of business on the last day of a Collection Period, which the
Servicer is required to advance on the Simple Interest Receivables pursuant to
Section 5.3(b).
"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of (a)
the fixed rate of interest, (b) the unpaid principal balance, and (c) a
fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made and the denominator of which is 365,
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.
ARTICLE II: THE SALE AND PURCHASE
SECTION 2.1. Sale and Purchase. Upon the terms and subject
to the conditions set forth herein, effective as of the Purchase Date, (i) the
Seller hereby sells, transfers and assigns to the Purchaser all of the
Seller's right, title and interest to and in the Purchased Receivables,
together with the Related Security and Collections from and after the Cut-Off
Date relating to such Purchased Receivables and (ii) the Purchaser hereby
purchases and accepts the transfer and assignment of all of the Seller's
right, title and interest to and in the Purchased Receivables, together with
the Related Security and Collections relating to such Purchased Receivables
(the foregoing sale, transfer and assignment being referred to as the
"Purchase") and (iii) the Purchaser hereby, without any further action
hereunder, does sell, transfer, assign, set over and otherwise convey to the
Seller, effective as of the Purchase Date, without recourse, representation or
warranty of any kind, all right, title and interest of the Purchaser in and to
the Balloon
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[Chrysler Receivables Sale Agreement]
Payments, all monies due and to become due and all amounts received with
respect thereto and all proceeds thereof.
SECTION 2.2. Purchase Price. The purchase price payable by
the Purchaser for the Purchase shall equal the Aggregate Principal Balance as
of the Cut-Off Date. Such purchase price shall be comprised of a cash
component and a deferred payment component. The cash component of the purchase
price shall be paid by the Purchaser to the Seller on the Purchase Date and
shall equal the Aggregate Principal Balance of the Purchased Receivables as of
the Cut-Off Date minus the Reserve calculated as of such Purchase Date. Upon
and after the reduction of the Investment to zero and the payment in full of
all other amounts due to the Purchaser hereunder, all Collections or other
cash received by the Purchaser on account of Receivables and the interest of
the Purchaser therein and all Receivables held by or on behalf of the
Purchaser will be transmitted in the form received by the Purchaser to the
Seller. The transmission of such amount by the Purchaser shall be deemed to
satisfy the payment of the deferred payment component of the purchase price
under this Section 2.2.
SECTION 2.3. Seller's Optional Termination. The Seller shall
have the right, on five (5) Business Days' written notice to the Agent, at any
time following the reduction of the Aggregate Principal Balance hereunder to a
level that is less than ten percent (10%) of the Aggregate Principal Balance
on the Purchase Date, to repurchase from the Purchaser all, and not part, of
the then outstanding Purchased Receivables, together with the Related Security
and Collections relating to such Purchased Receivables. The purchase price in
respect thereof shall be an amount equal to the Investment outstanding at such
time plus all other amounts payable (whether due or accrued) hereunder or
under any other Sale Document to the Investors or the Agent at such time. Such
repurchase shall be without representation, warranty or recourse of any kind
by, on the part of or against the Investors or the Agent.
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[Chrysler Receivables Sale Agreement]
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. The following
rates shall be utilized in calculating the amount of Carrying Costs to be
distributed each Settlement Period out of Collections of Purchased
Receivables:
SECTION 3.1.1. Purchase Discount.
(a) A Purchase Discount equal to the weighted average of the
following:
(i) the weighted average of the discount rates on
all commercial paper notes issued at a discount and outstanding during the
related Settlement Period (other than commercial paper notes the proceeds of
which are used by the Purchaser to (x) purchase receivables, or extend
financing secured thereby, at a fixed interest rate or (y) conduct any
arbitrage activities of the Purchaser), converted to an annual
yield-equivalent rate on the basis of a 360-day year;
(ii) the weighted average of the annual interest
rates payable on all interest-bearing commercial paper notes outstanding
during the related Settlement Period (other than the commercial paper notes
described in clauses (x) and (y) of paragraph (i) above), on the basis of a
360-day year; and
(iii) the weighted average of the annual interest
rates applicable to any Liquidity Facilities under which the Purchaser has
borrowed loans or sold interests during the related Settlement Period which
loans shall be borrowed only after a determination by the Purchaser that
financing its activities during such period by issuing commercial paper notes
would not be practicable or cost efficient;
provided that, to the extent that the Investment is funded by a specific
issuance of commercial paper notes and/or by a specific borrowing or sale
under a Liquidity Facility or a Credit Facility, the Purchase Discount shall
equal the rate or weighted average of the rates applicable to such issuance or
borrowing or sale, provided, further, that, for purposes of the foregoing, the
interest rates applicable under any
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[Chrysler Receivables Sale Agreement]
Liquidity Facility shall not exceed the reserve adjusted "LIBO Rate" quoted by
the Agent plus 0.25% per annum (unless not available) and the interest rates
under any Credit Facility shall not exceed the rate of interest per annum
published on such day (or, if not then published, on the most recently
preceding day) in The Wall Street Journal as the "Prime Rate" per annum.
(b) Two Business Days prior to the end of each Settlement
Period the Agent shall determine the Purchase Discount pursuant to (a) above
by using the actual Purchase Discount for each day elapsed in such month and
estimating the Purchase Discount for each remaining day in such month. In
addition, the Agent shall concurrently notify the Servicer of the actual
Purchase Discount for any days during the immediately preceding Settlement
Period with respect to which the Purchase Discount was estimated, and the
difference, if any, between the Carrying Costs actually paid using the
estimated Purchase Discount and the Carrying Costs which would have been paid
had the actual Purchase Discount been available (such differential being the
"Carrying Costs True-up Amount"). If the amount of Carrying Costs paid for
such immediately preceding Settlement Period based upon an estimated Purchase
Discount was less than the amount of Carrying Costs for such Settlement Period
based upon the actual Purchase Discount, the amount of Collections remitted to
the Agent pursuant to Section 5.2 shall be increased by an amount equal to the
Carrying Costs True-up Amount, or, if the amount of Carrying Costs paid for
such immediately preceding Settlement Period based upon an estimated Purchase
Discount was greater than the amount of Carrying Costs for such Settlement
Period based upon the actual Purchase Discount, the amount of Collections
remitted to the Agent pursuant to Section 5.2 shall be decreased by an amount
equal to the Carrying Costs True-up Amount.
SECTION 3.1.2. Servicer Fee. A Servicer Fee in respect of
each Collection Period, equal to 1.0% per annum (assuming a 30/360 day basis)
of the Principal Balance of Purchased Receivables on the first day of such
Collection Period, shall be remitted by the Purchaser to the Servicer from
Collections received pursuant to Section 5.4 hereof. If CFC is acting as the
Servicer, then the Servicer shall retain an amount equal to the Servicer Fee
(in full satisfaction of the payment of such fee to the Servicer) out of
amounts required to be remitted by the Servicer in accordance with Section
5.2.
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[Chrysler Receivables Sale Agreement]
SECTION 3.2. Interest on Unpaid Amounts. To the extent that
the Seller or Servicer fails to pay when due to the Investors or the Agent any
fee, expense or other amount payable hereunder or under any Sale Document,
interest shall be due and payable on such unpaid amount, for each day until
paid in full, at the rate of interest per annum published on such day (or, if
not then published, on the most recently preceding day) in The Wall Street
Journal as the "Prime Rate." Changes in the rate payable hereunder shall be
effective on each date on which a change in the "Prime Rate" is so published.
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4.1. Conditions Precedent to Purchase. The following
conditions must be satisfied before the Purchaser will make the Purchase:
SECTION 4.1.1. Absence of Liens. The Seller shall certify
that all Purchased Receivables, Related Security and all proceeds thereof are
free and clear of any Adverse Claim.
SECTION 4.1.2. Financing Statements. The Agent will have
received acknowledgment copies of UCC-1 financing statements, and all other
documents reasonably requested by the Agent, to evidence the perfection of the
interest of the Agent on behalf of the Investors in the Purchased Receivables,
the Related Security and the Collections.
SECTION 4.1.3. Schedule of Contracts. The Agent will have
received the Schedule of Contracts.
SECTION 4.1.4. Seller Resolutions. The Agent will have
received a certificate of the Seller attesting to:
(a) the resolutions of the majority interest of the
Seller's members authorizing the execution by the Seller of the Sale Documents
to be executed by the Seller;
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[Chrysler Receivables Sale Agreement]
(b) the names and signatures of the officers of the
Seller's members authorized to execute the Sale Documents to be executed by
the Seller; and
(c) the completeness and correctness of the attached
articles of organization and operating agreement of the Seller.
SECTION 4.1.5. Servicer Resolutions. The Agent will have
received a certificate of the Servicer's Secretary or Assistant Secretary
attesting to:
(a) the resolutions of the Servicer's Board of Directors
(or an executive committee thereof) authorizing the execution by the Servicer
of the Sale Documents to be executed by the Servicer;
(b) the names and signatures of the officers of the
Servicer authorized to execute the Sale Documents to be executed by the
Servicer; and
(c) the completeness and correctness of the attached
restated articles of incorporation and by-laws of the Servicer.
SECTION 4.1.6. Legal Opinion of Counsel to the Seller and
the Servicer. The Agent will have received an opinion from counsel to the
Seller and the Servicer, such counsel being "in-house" counsel unless
otherwise required by any agencies providing a credit rating to the
transaction contemplated hereby, substantially in the form attached hereto as
Exhibit B, together with such other matters as the Agent may reasonably
request.
SECTION 4.1.7. Good Standing Certificates. The Agent will
have received certificates of recent date issued by the Secretary of State of
the State of Michigan, as to the legal existence and good standing of the
Seller and the Servicer.
SECTION 4.1.8. Representations and Covenants. On and as of
the Purchase Date (i) the representations and warranties of the Seller and the
Servicer in Article VII shall be true and correct with the same effect as if
made on such date and (ii) the Seller and the Servicer shall be in compliance
with the covenants set forth in Article VIII. The Seller and the Servicer, by
accepting the proceeds of
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[Chrysler Receivables Sale Agreement]
such Purchase, shall be deemed to have certified as to the truth and accuracy
of each of the matters described in the foregoing clauses (i) and (ii), both
before and after giving effect to such Purchase.
SECTION 4.1.9. Other Documents. The Agent will have received
all other documents that the Agent had reasonably requested from the Seller or
the Servicer.
SECTION 4.1.10. Upfront Fee. The Seller shall have paid a
fee to the Agent at closing which shall include all upfront expenses,
including but not limited to legal fees, filing and administrative fees,
rating agency fees liquidity and credit enhancement fees incurred with respect
to the Purchase, as specified in the Fee Agreement.
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall segregate all
Collections from other funds of the Servicer and the Seller within two
Business Days of receipt thereof and hold such Collections in trust for the
Investors in the Designated Account, provided, however, notwithstanding the
foregoing, for so long as (i) CFC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii) CFC maintains a
long-term unsecured senior debt rating of at least BBB- by Standard & Poor's
Ratings Group and Baa3 by Moody's Investors Service, Inc., the Servicer shall
not be required to segregate all Collections and shall remit such Collections
with respect to each Settlement Period to the Agent on the Settlement Date
relating to such Settlement Period. The Seller will not deposit or otherwise
credit, or cause or permit to be so deposited or credited, to the Designated
Account cash or cash proceeds other than Collections of the Purchased
Receivables.
SECTION 5.2. Application of Collections. All collections for
the Collection Period shall be applied by the Servicer as follows:
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[Chrysler Receivables Sale Agreement]
(a) With respect to each Receivable (other than a Balloon
Payment Receivable), payments by or on behalf of the Obligor shall be applied
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 5.3(a) and, in the case of Simple
Interest Receivables, to reduce Outstanding Simple Interest Advances to the
extent described in Section 5.3(b). Next, any excess shall be applied, in the
case of Precomputed Receivables, to the Scheduled Payment and, in the case of
Simple Interest Receivables, to interest and principal in accordance with the
Simple Interest Method. With respect to Precomputed Receivables, to the extent
that the sum of any remaining excess and the Payahead Balance can be applied
to prepay the Precomputed Receivable in full, such remaining excess shall
constitute a full payoff of such Precomputed Receivable (a "Full Payoff"). To
the extent that the sum of any remaining excess, the Payahead Balance and one
payment can be applied to prepay the Precomputed Receivable in full, such
remaining excess shall constitute a partial payoff of such Precomputed
Receivable ( a "Partial Payoff"). Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the Payahead Balance.
(b) All Liquidation Proceeds with respect to any Balloon
Payment 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 be applied to, or
constitute, the related Balloon Payment.
SECTION 5.3. Advances.
(a) As of the close of business on the last day of each
Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Balloon Payment Receivable) shall be less
than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, the Servicer shall advance any remaining shortfall
(such amount, a "Precomputed Advance"), to the extent that the Servicer, at
its sole discretion, shall determine that the Precomputed Advance shall be
recoverable from the Obligor, Liquidation Proceeds or proceeds of any other
Precomputed Receivables. With respect to each Precomputed Receivable, the
Precomputed Advance shall
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[Chrysler Receivables Sale Agreement]
increase Outstanding Precomputed Advances. Outstanding Precomputed Advances
shall be reduced by subsequent payments by or on behalf of the Obligor,
collections of Liquidation Proceeds in respect of such Precomputed Receivables
or payments made pursuant to Section 5.6 with respect to such Precomputed
Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables and Outstanding Precomputed Advances with respect to
such Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each
Collection Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective APR's for
the related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect
to such Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The
Servicer shall not make any advance in respect of principal of Simple Interest
Receivables.
SECTION 5.4. Application of Collections on Settlement Dates.
The Servicer will, by 3:00 P.M. (New York time) on each Settlement Date, from
Collections received during the preceding Settlement Period, pay to the Agent
and the Agent shall distribute such Collections, together with any Hedging
Proceeds received by the Agent with respect to such Settlement Period, to the
Investors
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[Chrysler Receivables Sale Agreement]
(i) first, an amount equal to the Carrying Costs for the Settlement
Period (as such amount shall be increased or decreased by the Carrying Costs
True-up Amount, if any, for the immediately preceding Settlement Period as
determined pursuant to Section 3.1.1(b)) and (ii) second, all remaining
Collections as a reduction to Investment.
SECTION 5.5. Servicer Report. The Servicer will provide the
Agent, either in writing or electronically, with a Servicer Report with
respect to each Settlement Period no later than 15 days following the end of
such Settlement Period (or, if such 15th day is not a Business Day, the next
succeeding Business Day).
SECTION 5.6. Repurchase Obligations. If on any day the Agent
determines that the Seller has extended the maturity of any Contract relating
to a Purchased Receivable or that a Purchased Receivable was not an Eligible
Receivable on the Purchase Date, the Seller agrees to pay to the Agent for the
account of the Investors the amount of the outstanding balance of such
Receivable in full, and the subject Purchased Receivable shall thereupon be
deemed reconveyed to the Seller. Any amounts received by the Agent pursuant to
this Section 5.6 with respect to a Purchased Receivable shall be applied to
reduce the Investment.
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of Servicer. The Agent
and the Seller each hereby appoint CFC as the Servicer and CFC accepts such
appointment. The Servicer, for the benefit of the Investors (to the extent
provided herein), shall manage, service, administer, make collections and
discharge liens on the 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. If
the Servicer shall commence a legal proceeding to enforce a Purchased
Receivable, the Investors shall thereupon be deemed to have automatically
assigned, solely for the purpose of collection, such Purchased Receivables to
the Servicer. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Purchased Receivable on the ground that it
shall not be a real party in interest or a holder
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[Chrysler Receivables Sale Agreement]
entitled to enforce such Purchased Receivable, the Agent 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 Investors. The Agent
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 6.2. Replacement of Servicer.
(a) If any of the following events (a "Servicer Default")
shall occur and be continuing:
(i) any failure by the Servicer to make any payment or
deposit required to be made hereunder and the continuance of such
failure for a period of five Business Days;
(ii) any representation or warranty made by the Servicer in
Section 7.1 or any information set forth in a Servicer Report or
other certificate delivered to the Agent, shall prove to have been
incorrect in any material respect when made, which continues to be
incorrect in any material respect for a period of sixty days after
the earlier of the date on which an officer of the Servicer has
actual knowledge thereof and the date on which written notice thereof
has been given to the Servicer requiring the same to be remedied, by
the Agent;
(iii) failure on the part of the Servicer to observe or
perform in any material respect any other term, covenant or agreement
in this Agreement or any other Sale Document which continues
unremedied for sixty days after the earlier of the date on which an
officer of the Servicer has actual knowledge of such failure and the
date on which written notice of such failure has been given to the
Servicer requiring the same to be remedied, by the Agent; or
(iv) an Insolvency Event with respect to the Seller or the
Servicer,
24
<PAGE>
[Chrysler Receivables Sale Agreement]
then, so long as such Servicer Default shall not have been remedied, the Agent
shall have the right to remove CFC (or any successor Servicer) as Servicer by
giving written notice thereof to the Servicer. On and after receipt of such
written notice, all authority and power of the Servicer under this Agreement
shall, without further action, pass to and be vested in such successor
Servicer as may be appointed by the Agent; provided however, that the Servicer
cannot be removed until a successor Servicer is selected and appointed and
such successor Servicer meets industry-wide standards for being a Servicer of
retail automotive receivables.
(b) If CFC is removed as Servicer, CFC shall transfer to any
successor Servicer designated by the Agent all records, correspondence and
documents (including computer software) requested by the Agent or such
successor Servicer and permit such Persons to have access to, and to copy, all
software used by the Servicer in the collection, administration or monitoring
of the Purchased Receivables. In the case of software that is then licensed
by, or otherwise made available to, the Servicer from or by any third party,
the Servicer shall use its best efforts to obtain such consents and otherwise
take all actions necessary in order to enable any Servicer hereunder to
succeed to all rights of CFC to the quiet use and enjoyment of such software
for the purpose of discharging the obligations of the Servicer under or in
connection with the Sale Documents.
(c) Following the occurrence of a Servicer Default, (i) the
Agent may (a) notify Obligors of the ownership interest of the Agent on behalf
of the Investors hereunder in the Purchased Receivables and the Related
Security, (b) notify each issuer of an Insurance Policy of the ownership
interest of the Agent on behalf of the Investors hereunder in the Purchased
Receivables and in the Related Security (including the applicable Financed
Vehicle and Insurance Policy thereon), and (c) direct the Seller to, whereupon
the Seller immediately shall, note the interest of the Agent on behalf of the
Investors hereunder on each Certificate of Title relating to each Financed
Vehicle and (ii) the Investors and the Agent shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the Uniform Commercial Code of the applicable
jurisdiction and other applicable laws, which rights shall be cumulative.
25
<PAGE>
[Chrysler Receivables Sale Agreement]
(d) In the event of a Servicer Default, each of the Seller
and the Servicer (with respect to itself) will, unless the Agent has otherwise
consented in writing, at any reasonable time, permit the Agent or its agents
or representatives, to visit and inspect any of its properties, to examine its
books of account and other records and files relating to Purchased Receivables
(including, without limitation, computer tapes and disks) and to discuss its
affairs, business, finances and accounts with its officers and employees. The
Seller shall pay to the Agent and the Investors any and all reasonable costs
and expenses of the Agent and the Investors, if any (including reasonable
counsel fees and expenses) in connection with the enforcement of this
Agreement and the other documents delivered hereunder.
SECTION 6.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Agent and the Seller hereby irrevocably appoint the Servicer, and the Servicer
hereby accepts such appointment, to act for the benefit of the Investors and
the Seller as custodian of the following documents or instruments which are
hereby or will hereby be constructively delivered to the Agent, as pledgee of
the Seller, as of the Closing Date with respect to each Purchased Receivable
(the "Receivable Files"):
(a) the fully executed original of the Contract related to
such Purchased 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 Purchased Receivable, an Obligor or a
Financed Vehicle.
SECTION 6.4. Duties of Servicer as Custodian. The Servicer
shall hold the Receivable Files as custodian for the benefit of the Seller and
the
26
<PAGE>
[Chrysler Receivables Sale Agreement]
Investors and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the Seller
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 receivable files
relating to all comparable automotive receivables that the Servicer services
for itself or others.
SECTION 6.5. Effective Period and Termination. The
Servicer's appointment as custodian shall become effective as of the Cut-Off
Date and shall continue in full force and effect until terminated pursuant to
this Section. If CFC shall cease to be Servicer in accordance with the
provisions of this Agreement, the appointment of such Servicer as custodian
shall be terminated by the Agent. The Agent may terminate the Servicer's
appointment as custodian at any time following the occurrence of a Servicer
Default under Section 6.2(a) upon thirty days written notification to the
Servicer. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files to the Agent or to a Person
designated by the Agent at a place or places as the Agent may reasonably
designate.
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Seller
and the Servicer. Each of the Seller and the Servicer makes, with respect to
itself, the following representations and warranties to the Investors and the
Agent.
(a) It is a limited liability company or corporation, as
applicable, duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation and is duly qualified in good standing as a foreign corporation
or limited liability company in each jurisdiction where the failure to be so
qualified could materially adversely affect its ability to perform its
obligations hereunder.
(b) The execution, delivery and performance by the Seller
and the Servicer of the Sale Documents, and the Seller's use of the proceeds
of the Purchases, are within the Seller's and the Servicer's respective
corporate powers,
27
<PAGE>
[Chrysler Receivables Sale Agreement]
have been duly authorized by all necessary corporate action,
do not contravene (i) the Seller's or the Servicer's respective articles of
organization or charter, as applicable, or operating agreement or by-laws, as
applicable, or (ii) law or any contractual restriction binding on or affecting
the Seller or the Servicer, and do not result in or require the creation of
any Adverse Claim (other than pursuant hereto) upon or with respect to any of
its properties; and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller or the
Servicer of the Sale Documents, or for the perfection of or the exercise by
the Agent on behalf of the Investors of its rights and remedies under the Sale
Documents, except for the filing of the financing statements referred to in
Section 4.1.2.
(d) Each Sale Document constitutes the legal, valid and
binding obligation of the Seller and the Servicer, respectively, enforceable
in accordance with its terms.
(e) There is no pending or threatened action or proceeding
affecting the Seller or the Servicer or any of its subsidiaries before any
court, governmental agency or arbitrator which may materially adversely affect
(i) its financial condition or operations or (ii) its ability to perform its
obligations under the Sale Documents, or which could affect the legality,
validity or enforceability of any Sale Document or of the interest of the
Agent on behalf of the Investors in the Purchased Receivables.
(f) The Seller is the legal and beneficial owner of the
Receivables, the Related Security and Collections, free and clear of any
Adverse Claim, except as created by this Agreement; upon consummation of the
Purchase, the Agent on behalf of the Investors will acquire a valid and
perfected first priority ownership interest in the Purchased Receivable and in
the Related Security and the Collections with respect thereto, free and clear
of any Adverse Claim except as created by this Agreement.
28
<PAGE>
[Chrysler Receivables Sale Agreement]
(g) The information provided by the Seller to the Servicer
for use in each Servicer Report prepared under Section 5.5 and all information
and Sale Documents furnished or to be furnished at any time by the Seller to
the Agent in connection with this Agreement is or will be accurate in all
material respects as of its date, and no such document will contain any untrue
statement of a material fact or will omit to state a material fact which is
necessary to make the facts stated therein not misleading.
(h) The Seller is treating the conveyance of the interest in
the Purchased Receivables and the Collections under this Agreement to the
Agent on behalf of the Investors as a sale for purposes of generally accepted
accounting principles.
ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due to
the Agent and the Investors hereunder have been paid in full, each of the
Seller and the Servicer (with respect to itself) will, unless the Agent has
otherwise consented in writing:
(a) Maintain its existence in the jurisdiction of its
organization or incorporation, and qualify and remain qualified in good
standing as a foreign corporation or limited liability company in each
jurisdiction where the failure to be so qualified could materially adversely
affect its ability to perform its obligations hereunder.
(b) Maintain and implement administrative and operating
procedures, and keep and maintain all records and other information,
reasonably necessary or advisable for the collection of the Purchased
Receivables (including, without limitation, records adequate to permit the
daily identification of Purchased Receivables and all Collections and
adjustments to Purchased Receivables).
29
<PAGE>
[Chrysler Receivables Sale Agreement]
(c) At its expense timely and fully perform and comply with
all material provisions and covenants required to be observed by CFC or the
Seller under the Contracts related to the Purchased Receivables.
(d) Comply in all material respects with the Credit and
Collection Policy in regard to each Purchased Receivable and any Contract
related to such Receivable.
(e) Treat the conveyance of the interest in the Purchased
Receivables and the Collections under this Agreement as a sale for purposes of
generally accepted accounting principles.
SECTION 8.2. Reporting Requirements of the Servicer. Until
the Investment is reduced to zero and all amounts due to the Agent and the
Investors hereunder have been paid in full, the Servicer will, unless the
Agent shall otherwise consent in writing, furnish to the Agent:
(a) the Servicer Report as required under Section 5.5;
(b) as soon as possible, and in any event within thirty
days, a description and, if applicable, the steps being taken with respect
thereto by the Persons affected thereby of: (i) the occurrence of any Servicer
Default or event which with the passage of time or the giving of notice or
both would constitute a Servicer Default or (ii) the institution of any
litigation, arbitration proceeding or governmental proceeding which could be
reasonably likely to have a material adverse effect on the performance by the
Servicer of its obligations under this Agreement or the other Sale Documents
or the collectibility of the Purchased Receivables; and
(c) such other information, documents, records or reports
respecting the Purchased Receivables or the condition or operations, financial
or otherwise, of the Servicer or the Seller as the Agent may from time to time
reasonably request.
SECTION 8.3. Negative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due to
the Agent and
30
<PAGE>
[Chrysler Receivables Sale Agreement]
the Investors hereunder have been paid in full, neither the Seller nor the
Servicer will, unless the Agent has otherwise consented in writing;
(a) Except as provided herein, sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to any Purchased Receivables, the Related
Security or any Collections or assign any right to receive income in respect
thereof.
(b) Amend or otherwise modify the terms of any Purchased
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto, in each case, in any manner which is inconsistent with the
Credit and Collection Policy.
SECTION 8.4. Protection of the Purchaser's Interest.
(a) Until the Investment is reduced to zero and all other
amounts due to the Agent and the Investors hereunder have been paid in full,
each of the Seller and the Servicer agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and documents
and take all action that the Agent may from time to time reasonably request in
order to perfect, evidence and protect the validity, enforceability,
perfection and priority of the interest of the Agent on behalf of the
Investors in the Purchased Receivables, the Related Security and the
Collections and to enable the Agent and/or the Investors to exercise or
enforce any of its rights hereunder. Without limiting the generality of the
foregoing, the Seller and the Servicer will: (i) on or prior to the date
hereof, mark its master data processing records with a legend describing the
Agent's and the Investors' interests therein; and (ii) upon the request of the
Agent, execute and file such financing or continuation statements or
amendments thereto or assignments thereof as may be requested by the Agent,
provided, however, that the Seller is not required to deliver the Contracts to
anyone other than the Servicer;
(b) To the fullest extent permitted by applicable law, the
Agent shall be permitted to sign and file continuation statements and
amendments thereto and assignments thereof without the Seller's signature.
Carbon, photographic or other reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement.
31
<PAGE>
[Chrysler Receivables Sale Agreement]
ARTICLE IX: AGENT
SECTION 9.1. Appointment of Agent. The Investors have
appointed Royal Bank of Canada as their initial Agent. The Agent is
responsible for administering and enforcing this Agreement and fulfilling all
other duties expressly assigned to it in this Agreement. The Investors have
granted the Agent the authority to take all actions necessary to assure the
Seller's compliance with the terms of this Agreement and to take all actions
required or permitted to be performed by the Investors under this Agreement.
ARTICLE X: MISCELLANEOUS
SECTION 10.1. Amendments, Etc. No amendment or waiver of, or
consent to the Seller's or the Servicer's departure from, any provision of
this Agreement shall be effective unless it is in writing and signed by the
Agent, on behalf of the Investors, and in the case of any amendment, by the
Seller and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 10.2. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein,
be in writing (including photocopy, facsimile, electronic mail or other
digital communication) and sent, as to each party hereto, at its address set
forth under its name on the signature pages hereto, or at such other address
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective when sent.
SECTION 10.3. No Waiver; Remedies. No failure on the part of
the Agent to exercise, and no delay in exercising, any right hereunder or
under any Sale Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
32
<PAGE>
[Chrysler Receivables Sale Agreement]
SECTION 10.4. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Servicer, the Investors, the Agent and their
respective successors and assigns, except that the Seller shall not have the
right to assign any interest herein without the prior written consent of the
Agent. The Investors may assign any of their rights or obligations hereunder
to any Person; provided that in the case of any such assignment proposed to be
made prior to the occurrence of a Servicer Default, the consent of the Seller
(which consent shall not be unreasonably withheld) shall be required.
(b) This Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as the Investment is
reduced to zero and all other amounts due to the Agent and the Investors
hereunder have been paid in full; provided, however, that the rights and
remedies of the Purchaser under Article IX and the provisions of Section 10.7
shall survive any termination of this Agreement.
SECTION 10.5. Governing Law. This Agreement and the Sale
Documents shall be governed by, and construed in accordance with, the laws of
the State of New York, except to the extent that the perfection of the
interests of the Investors in the Receivables or remedies hereunder, in
respect thereof, are governed by the laws of a jurisdiction other than the
State of New York.
SECTION 10.6. Construction of the Agreement. The parties
hereto intend that the conveyance of the interest in the Purchased Receivables
by the Seller to the Agent on behalf of the Investors shall be treated as
sales for purposes of generally accepted accounting principles. If, despite
such intention, a determination is made that such transactions shall not be
treated as sales, then this Agreement shall be interpreted to constitute a
security agreement and the transactions effected hereby shall be deemed to
constitute a secured financing by the Agent on behalf of the Investors to the
Seller under applicable law. For such purpose, the Seller hereby grants to the
Agent on behalf of the Investors a continuing security interest in the
Purchased Receivables and the Related Security
33
<PAGE>
[Chrysler Receivables Sale Agreement]
and Collections related thereto to secure the obligations of the Seller to the
Agent on behalf of the Investors hereunder.
SECTION 10.7. No Proceedings. Each of the Seller, the Agent,
the Investors and the Servicer each hereby agrees that it will not institute
against the Purchaser any bankruptcy, reorganization, insolvency or similar
proceeding until the date which is one year plus one day since the last day on
which any commercial paper notes or medium term notes issued by the Purchaser
were outstanding.
SECTION 10.8. Confidentiality. The Investors and the Agent
agree to maintain the confidentiality of any information regarding the Seller
and Servicer obtained in accordance with the terms of this Agreement which is
not publicly available, but the Investors and the Agent may, with advance
notice to the Seller and Servicer, reveal such information (a) to applicable
rating agencies, liquidity providers and credit providers, (b) as necessary or
appropriate in connection with the administration or enforcement of this
Agreement or its funding of the Purchase under this Agreement, (c) as required
by law, government regulation, court proceeding or subpoena or (d) to bank
regulatory agencies and examiners.
SECTION 10.9. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.10. Indemnification by Seller of Investors, etc.
Without limiting any other rights which the Investors, the Agent and their
respective officers, directors, employees, agents and Affiliates may have
hereunder or under applicable law, the Seller hereby indemnifies such parties
and holds them harmless from and against any and all damages, losses, claims,
liabilities and related costs and expenses (including attorneys' fees and
disbursements) incurred by any of them arising out of or resulting from this
34
<PAGE>
[Chrysler Receivables Sale Agreement]
Agreement or the purchase by the Purchaser of any interest in the Purchased
Receivables or the Related Security and Collections related thereto,
including, without limitation:
(a) any warranty or products liability claim allegedly
arising out of or in connection with merchandise or services which are the
subject of, or were financed with the proceeds of, any Contract under which
any of the Purchased Receivables arise, or any use or misuse by any Person of
any Financed Vehicle (including, without limitation, any use involving the
handling or disposition of any hazardous substance or waste material);
(b) the failure to vest in the Agent for the benefit of the
Investors an ownership or first perfected security interest in the Purchased
Receivables, the Related Security and Collections in respect thereof, free and
clear of any Adverse Claim other than as authorized hereunder; and
(c) the commingling of Collections of Purchased Receivables at
any time with other fund.
35
<PAGE>
[Chrysler Receivables Sale Agreement]
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their duly authorized officers as of the date set forth on the
cover page of this Agreement.
PREMIER RECEIVABLES L.L.C.,
as Seller
By: /s/ D.H. Olsen
--------------------
Name: D.H. Olsen
Title: Assistant Treasurer of Premier Auto
Receivables Company, a Member
of the Seller
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Treasurer
Tel. No.: 810-948-3813
Facsimile: 810-948-3138
CHRYSLER FINANCIAL CORPORATION,
as Servicer
By: /s/ D.H. Olsen
---------------------
Name: D. H. Olsen
Title: Assistant Treasurer
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Tel. No.: 810-948-3813
Facsimile: 810-948-3138
<PAGE>
[Chrysler Receivables Sale Agreement]
OLD LINE FUNDING CORP., as Purchaser
By: ROYAL BANK OF CANADA,
as attorney in fact
By: /s/ Stephan J. Grossnickle
--------------------------
Name: Stephan J. Grossnickle
Title: Managing Director
By: /s/ Denham O. Turton
-----------------------
Name: Denham O. Turton
Title: Senior Manager
Address: c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, New York 10005
Attention: Andrew L. Stidd
Vice President
Tel. No.: (212) 346-9000
Facsimile: (212) 346-9012
<PAGE>
[Chrysler Receivables Sale Agreement]
ROYAL BANK OF CANADA,
as Agent
By: /s/ Stephan J. Grossnickle
-----------------------------
Name: Stephan J. Grossnickle
Title: Managing Director
By: /s/ Denham O. Turton
-----------------------
Name: Denham O. Turton
Title: Senior Manager
Address: One Financial Square
(corner of Front Street and Old Slip)
23rd Floor
New York, New York 10005-3531
Attention: Managing Director,
North American Securitization Group
Tel. No.: (212) 428-6474
Facsimile: (212) 428-2304
Exhibit 10-VVVV
RECEIVABLES SALE AGREEMENT
among
CHRYSLER CREDIT CANADA LTD.
as Seller and Servicer,
CHRYSLER FINANCIAL CORPORATION
as Performance Guarantor,
CANADIAN MASTER TRUST
as Purchaser
and
NESBITT BURNS INC.
as Administrative Agent
Dated as of December 18, 1996
<PAGE>
TABLE OF CONTENTS
PAGE NO.
ARTICLE I: DEFINITIONS...................................................1
ARTICLE II: SALE AND PURCHASE............................................10
ARTICLE III: FEES AND EXPENSES............................................11
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE.............................13
ARTICLE V: SETTLEMENT PROCEDURES........................................15
ARTICLE VI: SERVICING OF RECEIVABLES.....................................17
ARTICLE VII: REPRESENTATIONS AND WARRANTIES...............................20
ARTICLE VIII: COVENANTS....................................................21
ARTICLE IX: ADMINISTRATIVE AGENT.........................................24
ARTICLE X: COVENANTS OF CFC.............................................24
ARTICLE XI: MISCELLANEOUS................................................25
EXHIBIT A Form of Servicer Report
<PAGE>
RECEIVABLES SALE AGREEMENT dated as of December 18, 1996, among
CHRYSLER CREDIT CANADA LTD., a Canadian corporation, as the "Seller" and
initial Servicer, CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as
the "Performance Guarantor", CANADIAN MASTER TRUST, as the "Purchaser" and
NESBITT BURNS INC., as the "Administrative Agent" for the Purchaser.
ARTICLE I: DEFINITIONS
"Administrative Agent" means Nesbitt Burns Inc. and any replacement
thereof under Section 9.1.1.
"Advance" means either a Precomputed Advance or Simple Interest
Advance or both, as applicable determined in accordance with Section 5.3.
"Adverse Claim" means any mortgage, pledge, security interest,
hypothecation, hypothec, assignment, deposit arrangement, encumbrance, lien
(consensual, statutory or other), charge, security arrangement, or any other
encumbrance or other right or claim in, of or on any Person's assets or
properties in favour of any other Person, of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic
effect as any of the foregoing).
"Agreement" means this Receivables Sale Agreement including the
Exhibit hereto and the Schedule of Contracts, as it may be amended from time
to time.
"Aggregate Principal Balance" means, at any time, the aggregate
Principal Balance of all Purchased Receivables at such time.
"Amount Financed" means the amount advanced under a 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.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate or, in the case of Contracts originated in the Province of
Quebec, the annual rate, stated on the face of the related Contract.
"Bankers' Acceptance Rate" means, on any day, the annual rate of
interest which is the rate quoted by Bank of Montreal for bankers' acceptances
accepted by it having a maturity equivalent to the applicable Settlement
Period, provided that if no such quoted rate is available on any day,
"Bankers' Acceptance Rate" on that day shall be such other rate as the
Administrative Agent and the Seller may agree.
"Business Day" means any day other than a Saturday, Sunday, statutory
holiday or other holiday on which banks are closed in Toronto or New York.
<PAGE>
- 2 -
"Carrying Costs" means, for each Settlement Period, an amount equal
to the sum of:
(i) (PD + PF) x DSP x AI
---------
365
plus
(ii) SF x DSP x APB
--------------
365
where PD = Purchase Discount
PF = Program Fee
SF = Servicer Fee
DSP = the number of days in
such Settlement Period
AI = the average daily
Investment for such
Settlement Period
APB = the average daily
Aggregate Principal
Balance for such
Settlement Period.
"Carrying Costs True-up Amount" has the meaning assigned to that term
in Section 3.1.1.
"CFC" means, Chrysler Financial Corporation, a Michigan corporation,
and its successors and assigns.
"Collection" means any amount paid by an Obligor or any other Person
with respect to a Purchased Receivable, including (i) Liquidation Proceeds,
(ii) amounts paid to the Purchaser pursuant to Section 2.4 and (iii) the
amount paid to the Purchaser on the sale of Purchased Receivables pursuant to
Section 2.3.
"Collection Period" means a calendar month, or, in the case of the
initial Collection Period, the period beginning on the Cut-Off Date and ending
on December 31, 1996.
"Contract" means, with respect to any Receivable, any and all
instruments, conditional sale contracts, agreements, invoices, or other
writings pursuant to which such Receivable arises or which evidence such
Receivable.
<PAGE>
- 3 -
"Credit and Collection Policy" means the credit and collection
policies and practices of the Servicer and any successor Servicer relating to
Receivables and Contracts, such policies being subject to unilateral revision
or modification at any time by the Servicer or successor Servicer provided
that and such revision or modification shall apply equally to the Purchased
Receivables and Receivables owned by the Seller.
"Credit Facilities" means each of the committed loan facilities,
lines of credit, letters of credit and other forms of credit enhancement
available to the Purchaser (except under this Agreement) which are not
Liquidity Facilities.
"Cut-Off Date" means December 12, 1996.
"Dealer" means an automobile or light-duty truck dealership located
within Canada at or through which a Financed Vehicle shall have been purchased
or is proposed to be purchased.
"Delinquency Ratio" means, as of the last calendar day of any month,
a fraction, expressed as a percentage, the numerator of which is the sum of
the Principal Balances of all Purchased Receivables which were Delinquent
Receivables as of the last calendar day of such month and the last calendar
day of each of the two immediately preceding months, to the extent such
preceding months exist for each such Receivable, and the denominator of which
is the sum of the Aggregate Principal Balance on such last calendar day of
such month and on the last calendar day of each of the two immediately
preceding months, to the extent such preceding months exist.
"Delinquent Receivable" means any Receivable which has 10% or more of
a scheduled payment past due for more than 60 days.
"Defaulted Receivable" means a Receivable (i) under which an amount
greater than or equal to the amount required to be paid under the related
Contract for the calendar month ending on the last day of the most recently
completed Settlement Period has been outstanding for a period greater than or
equal to three calendar months, or (ii) in respect of the Obligor (other than
a guarantor) of which an Insolvency Event has occurred and is continuing.
"Eligible Receivable" means, as of the Cut-Off Date, any Receivable:
(i) the Obligor of which (a) is a resident of Canada and (b) is
not an affiliate of the originating Dealer or any of the
parties hereto,
(ii) the Obligor of which (a) is not the Obligor of any
Delinquent Receivable and (b) is not the subject of any
bankruptcy, insolvency or reorganization proceeding or any
other proceeding seeking the appointment of a receiver,
trustee or other similar official for the Obligor or any
substantial part of the Obligor's property,
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(iii) which is "chattel paper" within the meaning of the
applicable PPSA,
(iv) which is denominated and payable only in Canadian dollars in
Canada,
(v) which (a) has been originated in Canada by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of
such Dealer's business and (b) satisfies all applicable
requirements of the Credit and Collection Policy,
(vi) which arises under a Contract (a) which, together with such
Receivable, is (1) in full force and effect and constitutes
the legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with
its terms, and (2) subject to no dispute, offset,
counterclaim or other defence, and (b) with respect to which
(1) no default, breach, violation, or event permitting
acceleration under the terms thereof has occurred and (2)
there has not arisen any condition that, with notice or
lapse of time or both, would constitute a default, breach,
violation or event permitting acceleration under the terms
thereof,
(vii) which, together with the related Contract, (a) is secured by
a perfected, valid, subsisting and enforceable first
priority security interest in favour of the Seller in the
related Financed Vehicle, (b) contains customary and
enforceable provisions such that the rights and remedies of
the holder of such security interest are adequate for
realization against the collateral of the benefits of the
security, and (c) was originated and transferred to the
Seller without any conduct constituting fraud or
misrepresentation on the part of the applicable Dealer or
the Seller,
(viii) which, together with the related Contract, immediately
following the execution of such Contract, was purchased by
(and the originating Dealer has validly assigned all of its
right, title and interest therein to) the Seller, and such
assignment of such Contract to the Seller is expressly
contemplated in such Contract,
(ix) which, together with the related Contract, does not
contravene any laws, rules or regulations applicable thereto
and with respect to which no part of the related Contract is
in violation of any such law, rule or regulation,
(x) the Financed Vehicle securing which (a) is free and clear of
any Adverse Claim other than the security interest therein
then being assigned by the Seller to the Purchaser, and no
enforcement action, whether by repossession or otherwise,
has been taken with respect to such Financed Vehicle, and
(b) is covered by the Required Insurance in respect of such
Financed Vehicle which is in full force and affect, and the
proceeds of the Required Insurance have been assigned to the
Seller or the Seller is the loss payee thereof and the
Required Insurance, including the proceeds, are fully
assignable to the Purchaser,
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(xi) as to which the Administrative Agent has not notified the
Seller that such Receivable or class of Receivables is not
acceptable as an Eligible Receivable, including, without
limitation, because such Receivable arises under a Contract
that is not acceptable,
(xii) with respect to the outstanding principal balance thereof,
(a) the related Contract requires that payment in full of
such outstanding balance is scheduled to be made (1) not
earlier than 5 months after, and (2) not later than 60
months after the date any interest therein is assigned to
the Purchaser hereunder and (b) such outstanding balance is
scheduled to be paid in equal consecutive monthly
instalments in accordance with the actuarial method, the
simple interest method or the Rule of 78s, and
(xiii) which Receivable bears interest at the Annual Percentage
Rate and such rate remains fixed during the term of such
Receivable and accrued interest on such Receivable is
payable monthly, in arrears.
"Finance Charges" means, with respect to any Receivable and its
related Contract, any finance, interest or similar charges owing by an Obligor
pursuant to such Contract, including, without limitation, any charge payable
in connection with any extension or adjustment under such Contract (without
regard to whether any such extension or adjustment is permitted under the
terms of this Agreement).
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
applicable Contract.
"Full Payoff" has the meaning assigned to that term in Section 5.2.
"Hedging Proceeds" means any amount payable by CFC to the Purchaser
under the interest rate cap agreement dated the date hereof made between CFC
and the Purchaser with respect to this Agreement.
"Insolvency Event" means, with respect to a specified Person, the
commencement by or against such Person of any proceeding under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
commencement of any proceeding seeking the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee or similar official
for such Person or for any substantial part of such Person's property, or the
winding up or liquidation of such Person, 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 any
action by such Person in furtherance of any of the foregoing.
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"Insurance Policy" means (i) any comprehensive, collision, fire,
theft or other insurance policy maintained by an Obligor in which the Seller
or the Servicer is named as loss payee with respect to one or more Financed
Vehicles, and (ii) any credit, life or disability insurance maintained by an
Obligor in connection with any Contract.
"Investment" means the aggregate amount of cash paid by the Purchaser
to the Seller for the Purchase on the Purchase Date, minus the amount of all
Collections received and applied as reductions of Investment pursuant to
Article V.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidity Facilities" means each of the committed loan facilities,
lines of credit and other financial accommodations available to the Purchaser
to support the liquidity of the Purchaser's commercial paper notes.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the monies collected in respect thereof, from whatever source, 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.
"Net Loss" for a month means the sum of the Aggregate Principal
Balance of all Purchased Receivables which are Defaulted Receivables for such
month, minus any Liquidation Proceeds received during such month, plus any
losses resulting from disposition expenses paid during such month.
"Net Loss Ratio" means, as of the last day of any month, a fraction,
expressed as a percentage, the numerator of which is the product of (i) the
sum of the Net Loss for such month and the five immediately preceding months,
to the extent such months exist for each Purchased Receivable, and (ii) a
factor of 12 divided by the number of months included in the sum in clause
(i), and the denominator of which is the average of the Aggregate Principal
Balance on the first day of the month and the first day of the five
immediately preceding months, to the extent such months exist for each
Purchased Receivable.
"Obligor" means any Person which is obligated to make payment on a
Receivable.
"Outstanding Precomputed Advances" on the Precomputed Receivables
means the sum, as of the close of business on the last day of a Collection
Period, of all Precomputed Advances as reduced as provided in Section 5.3(a).
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.3(b).
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"Partial Payoff" has the meaning assigned to that term in Section 5.2.
"Payahead" on a Receivable that is a Precomputed Receivable means the
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.2 with respect to such Receivable.
"Payahead Balance" on a Receivable that is a Precomputed Receivable
means the sum, as of the close of business on the last day of a Collection
Period, of all Payaheads made by or on behalf of the Obligor with respect to
such Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable pursuant to Sections 5.2 and 5.3.
"Performance Guarantor" means, CFC and its successors and assigns.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"PPSA" means the Personal Property Security Act (Ontario) or the
comparable legislation of the other provinces and territories of Canada
including, in Quebec, the Civil Code of Quebec, and in Nova Scotia,
Newfoundland and Prince Edward Island, the respective Assignments of Book
Debts Acts of such provinces.
"Precomputed Advance" means the amount, as of the close of business
on the last day of a Collection Period, which the Servicer is required to
advance on the related Precomputed Receivables pursuant to Section 5.3(a).
"Precomputed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related Contract as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances or the
sum of monthly balances or any equivalent method or which is a monthly
actuarial receivable.
"Prime Rate" means the rate per annum on any day publicly announced
by Bank of Montreal as its "prime rate" for Canadian dollar commercial loans
made by it in Canada.
"Principal Balance" means with respect to any Receivable the
outstanding principal balance thereof determined in accordance with the Credit
and Collection Policy and the Servicer's customary calculation methods.
"Program Fee" has the meaning assigned to that term in Section 3.1.2.
"Purchase" has the meaning assigned to that term in Section 2.1.
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"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.
"Purchase Date" means December 18, 1996, the date on which the
conditions precedent to the Purchase described in Section 4.1. have been
satisfied or waived.
"Purchase Discount" has the meaning assigned to that term in Section
3.1.1.
"Purchased Assets" has the meaning assigned to that term in Section
2.1.
"Purchased Receivable" means an Eligible Receivable being sold to
Purchaser under this Agreement arising under a Contract listed on the Schedule
of Contracts delivered to the Administrative Agent prior to the Purchase Date.
"Purchaser" means Canadian Master Trust, a trust established pursuant
to the laws of the Province of Ontario and its successors and assigns.
"Purchaser's Anticipated Recovery" means the sum of the Investment on
the Purchase Date plus the aggregate of all amounts required to be remitted to
the Purchaser pursuant to Section 5.4(i).
"Rating Agency" means Dominion Bond Rating Service Limited or its
successor.
"Receivable" means the indebtedness and other obligations of an
Obligor arising under a Contract, whether such indebtedness or other
obligations constitute accounts, chattel paper, instruments or general
intangibles, and including, without limitation, the obligation to pay any
Finance Charges with respect thereto.
"Receivables Files" means the documents specified in Section 6.3.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed Vehicle, the
financing of the purchase of which gave rise to such
Receivable, including, without limitation, all of the
Seller's right, title and interest in and to the proceeds of
the Insurance Policies, and all warranties, indemnities,
service obligations and other contract rights issued or
granted by, or otherwise existing under applicable law
against, the Obligor, manufacturer or Dealer in respect of
such Financed Vehicle,
(ii) all guarantees or other security interests or liens and
property subject thereto from time to time, if any,
purporting to secure payment of such Receivable, whether
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pursuant to the Contract related to such Receivable, or
otherwise, together with all financing statements or other
instruments signed by an Obligor describing any collateral
securing such Receivable, and including, without limitation,
all security interests or liens, and property subject
thereto, granted by any Person (whether or not the primary
Obligor on such Receivable) under or in connection
therewith,
(iii) all books, records and other information relating to such
Receivable, including, without limitation, all Contracts,
(iv) all service contracts and other contracts and agreements
relating to such Receivable, and
(v) all proceeds of any of the foregoing.
"Required Insurance" means an Insurance Policy with respect to a
Financed Vehicle (i) that has been issued to the Obligor by an insurance
company acceptable to the Servicer, (ii) that provides comprehensive,
collision, fire, theft and other physical damage coverage, (iii) that is in an
amount not less than the market value of the applicable Financed Vehicle, and
(iv) that has the Seller or the Servicer noted as the loss payee thereon.
"Reserve" means an amount in the form of Receivables having a
Principal Balance equal to 5.0% of the Investment as of the Purchase Date.
"Sale Documents" means this Agreement and all other certificates,
instruments, agreements and documents executed from time to time by the Seller
in connection with the transactions contemplated in this Agreement.
"Schedule of Contracts" means the list of Contracts delivered to the
Administrative Agent, such list being in microfiche, paper or electronic
format.
"Seller" means Chrysler Credit Canada Ltd., a Canada corporation and
its successors and permitted assigns.
"Servicer" means the Seller or any replacement thereof under Article
VI.
"Servicer Default" has the meaning assigned to that term in Section
6.2.
"Servicer Fee" has the meaning assigned to that term in Section
3.1.3.
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"Servicer Report" means the report in the form of Exhibit A hereto to
be provided by the Servicer in accordance with Section 5.5 which report shall
include a calculation of the Delinquency Ratio and the Net Loss Ratio for the
applicable month.
"Settlement Date" means the last day of each month following a
related Settlement Period (or if such day is not a Business Day, the preceding
Business Day).
"Settlement Period" means a calendar month, provided, that, for
purposes of the initial Settlement Period, such period shall commence on the
Cut-Off Date and end on December 31, 1996.
"Significant Event" has the meaning assigned to that term in Section
8.2.(b).
"Simple Interest Advance" means the amount of interest, as of the
close of business on the last day of a Collection Period, which the Servicer
is required to advance on the Simple Interest Receivables pursuant to Section
5.3(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of (a) the fixed
rate of interest, (b) the unpaid principal balance, and (c) a fraction, the
numerator of which is the number of days elapsed since the preceding payment
of interest was made and the denominator of which is 365 or 366, as the case
may be, 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.
"Structuring Fee" has the meaning assigned to that term in Section
4.1.10.
ARTICLE II: SALE AND PURCHASE
SECTION 2. 1. Sale and Purchase. Upon the terms and subject to the
conditions set forth herein, effective as of the Purchase Date, (i) the Seller
hereby sells, transfers and assigns to the Purchaser all of the Seller's
right, title and interest to and in the Purchased Receivables, together with
the Related Security and Collections from and after the Cut-Off Date relating
to such Purchased Receivables and all proceeds of the foregoing (collectively,
the "Purchased Assets") and (ii) the Purchaser hereby purchases and accepts
the transfer and assignment of all of the Seller's right, title and interest
to and in the Purchased Receivables, together with the Related Security and
Collections relating to such Purchased Receivables and all proceeds of the
foregoing (the foregoing sale, transfer and assignment being referred to as
the "Purchase").
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SECTION 2.2. Purchase Price. The purchase price payable by the
Purchaser for the Purchase is the sum of the Investment on the Purchase Date
plus the amount, if any, by which aggregate Collections exceed the Purchaser's
Anticipated Recovery. Such purchase price shall be paid by the Purchaser to
the Seller in two components, a cash component and a deferred payment
component. The cash component of the purchase price shall be paid on the
Purchase Date and shall equal the Aggregate Principal Balance as of the
Cut-Off Date minus the Reserve calculated as of such Purchase Date. The
deferred component shall be paid after the Investment has been reduced to zero
as Collections are received by the Purchaser provided that the balance of the
deferred component of the purchase price shall be paid forthwith upon the sale
by the Purchaser of Purchased Receivables pursuant to Section 2.3.
SECTION 2.3. Seller's Optional Termination. The Seller shall have the
right, on five Business Days' written notice to the Administrative Agent
expiring on a Settlement Date, at any time following the reduction of the
Aggregate Principal Balance hereunder to a level that is less than ten percent
(10%) of the Aggregate Principal Balance on the Purchase Date and is greater
than the aggregate of the Investment outstanding after the application of
Collections remitted on that Settlement Date and all other amounts payable
(whether due or accrued) hereunder or under any other Sale Document, to
repurchase from the Purchaser all, and not part, of the then outstanding
Purchased Receivables, together with the Related Security and Collections
relating to such Purchased Receivables. The purchase price in respect thereof
shall be an amount equal to the Aggregate Principal Balance as at the last day
of the preceding Settlement Period. The assignment giving effect to such
repurchase shall be without representation, warranty or recourse of any kind
by, on the part of or against the Purchaser or the Administrative Agent except
as to the Purchaser's unencumbered title to the said Purchased Receivables,
Related Security and Collections. The Seller shall pay and account for the
amount so payable as a Collection with respect to the Purchased Receivables.
SECTION 2.4 Repurchase of Ineligible Receivables. In the event the
Seller is in breach of a representation and warranty as set forth in Article
VII or of the covenant set forth in Section 8.3(c) made with respect to a
Purchased Receivable, then on the Settlement Date following the Settlement
Period in which such breach is discovered the Seller shall repurchase each
such Purchased Receivable for the Purchase Amount thereof. The Seller shall
pay and account for the amount so payable as a Collection with respect to the
Purchased Receivables.
ARTICLE III: FEES AND EXPENSES
SECTION 3. 1. Determination of Carrying Costs. The following rates
shall be utilized in calculating the amount of Carrying Costs to be
distributed each Settlement Period out of Collections of Purchased
Receivables.
SECTION 3. 1. 1. Purchase Discount.
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(a) A Purchase Discount equal to the weighted average of the
following (net of any Hedging Proceeds in respect of the related
Settlement Period):
(i) the weighted average of the discount rates on all
commercial paper notes issued at a discount and outstanding
during the related Settlement Period (other than commercial
paper notes the proceeds of which are used by the Purchaser
to (A) purchase receivables, or extend financing secured
thereby, at a fixed interest rate or (B) conduct any
arbitrage activities of the Purchaser), converted to an
annual yield-equivalent rate on the basis of a 365-day year;
(ii) the weighted average of the annual interest rates
payable on all interest-bearing commercial paper notes
outstanding during the related Settlement Period (other than
the commercial paper notes described in clauses (A) and (B)
of paragraph (i) above), on the basis of a 365-day year; and
(iii) the weighted average of the annual interest rates
applicable to any Liquidity Facilities under which the
Purchaser has borrowed loans during the related Settlement
Period (which loans shall be borrowed only after a
determination by the Purchaser that financing its activities
during such period by issuing commercial paper notes would
not be practicable or cost-efficient); provided that to the
extent that the Investment is funded by a specific issuance
of commercial paper notes and/or by a specific borrowing
under a Liquidity Facility or a Credit Facility, the
Purchase Discount shall equal the rate or weighted average
of the rates applicable to such issuance or borrowing,
provided, further, that, for purposes of the foregoing, the
interest rates applicable under any Liquidity Facility shall
be equal to one-half of one per cent (0.50%) per annum in
excess of the greater of (A) the rate of interest per annum
for overnight interbank loans in respect of Canadian dollar
funds having a term of one day, and (B) the Banker's
Acceptance Rate for the applicable Settlement Period.
(b) Two calendar days prior to the end of each Settlement Period (or
if such day is not a Business Day, the immediately preceding Business
Day), the Administrative Agent shall determine the Purchase Discount
pursuant to (a) above by using the actual Purchase Discount for each
day elapsed in such month and estimating the Purchase Discount for
each remaining day in such month. In addition, the Administrative
Agent shall concurrently notify the Servicer of the actual Purchase
Discount for any days during the immediately preceding Settlement
Period with respect to which the Purchase Discount was estimated, and
the difference, if any, between the Carrying Costs actually paid
using the estimated Purchase Discount and the Carrying Costs which
would have been paid had the actual Purchase Discount been available
(such differential being the "Carrying Costs True-up Amount"). If the
amount of Carrying Costs paid for such immediately preceding
Settlement Period based upon an estimated Purchase Discount was less
than the amount of Carrying Costs for such Settlement Period based
upon the actual Purchase Discount,
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the amount of Collections remitted to the Purchaser pursuant to
Section 5.4 shall be increased by an amount equal to the Carrying
Costs True-up Amount, or, if the amount of Carrying Costs paid for
such immediately preceding Settlement Period based upon an estimated
Purchase Discount was greater than the amount of Carrying Costs for
such Settlement Period based upon the actual Purchase Discount, the
amount of Collections remitted to the Purchaser pursuant to Section
5.4 shall be decreased by an amount equal to the Carrying Costs
True-up Amount.
SECTION 3.1.2. Program Fee. A Program Fee equal to 0.18% per annum
which shall include all annual expenses, including but not limited to legal
fees and disbursements, audit fees, filing and administrative fees, liquidity
and credit enhancement fees, and dealer commissions.
SECTION 3.1.3. Servicer Fee. In respect of any period during which
the Seller is not the Servicer, a Servicer Fee in respect of each Collection
Period, not to exceed 1.0% per annum of the Aggregate Principal Balance on the
first day of such Collection Period, which shall be remitted by the Purchaser
to the Servicer.
SECTION 3.2. Interest on Unpaid Amounts. To the extent that the
Seller or Servicer fails to pay when due to the Purchaser or the
Administrative Agent any fee, expense or other amount payable hereunder or
under any Sale Document, interest shall be due and payable on such unpaid
amount, for each day until paid in full, at the rate of 1.0% per annum in
excess of the Prime Rate.
SECTION 3.2.1. Interest Act (Canada). For the purposes of disclosure
under the Interest Act (Canada) the equivalent annual rate to any rate of
interest or discount calculated on the basis of a period less than a year is
the rate so calculated multiplied by a fraction the numerator of which is the
number of days in the calendar year and the denominator of which is the number
of days in such period.
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4. 1. Conditions Precedent to Purchase. The following
conditions must be satisfied before the Purchaser will make the Purchase:
SECTION 4. 1. 1. Absence of Liens. The Seller shall certify that all
Purchased Receivables and all proceeds thereof are free and clear of any
Adverse Claim.
SECTION 4.1.2. PPSA Registrations. The Administrative Agent will have
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received verification statements, or other documents reasonably requested by
the Administrative Agent, to evidence the recording of the Purchaser's
interest in the Purchased Receivables, the Related Security and the
Collections under the applicable PPSA.
SECTION 4.1.3. Schedule of Contracts. The Administrative Agent will
have received the Schedule of Contracts.
SECTION 4.1.4. Seller Officer's Certificate. The Administrative Agent
will have received a certificate of an officer of the Seller attesting to:
(a) the resolution of the directors of the Seller authorizing this
Agreement and the execution by the Seller of the Sale Documents
to be executed by the Seller;
(b) the names and specimen signatures of the officers of the Seller
authorized to execute the Sale Documents to be executed by the
Seller; and
(c) the completeness and correctness of the articles of incorporation
and by-laws of the Seller attached thereto.
SECTION 4.1.5. CFC Officer's Certificate. The Administrative Agent
will have received a certificate of an officer of CFC attesting to:
(a) the resolution of the Directors of CFC (or the executive
committee thereof) authorizing the guarantee of CFC contained in this
Agreement and the execution by CFC of the Sale Documents to be
executed by CFC;
(b) the names and specimen signatures of the officers of CFC
authorized to execute the Sale Documents to be executed by
CFC; and
(c) the completeness and correctness of the restated articles of
incorporation and by-laws of CFC attached thereto.
SECTION 4.1.6. Legal Opinion of Counsel to the Seller. The
Administrative Agent will have received an opinion from counsel to the Seller
in the form and as to such matters as the Administrative Agent or the
Purchaser may reasonably request.
SECTION 4.1.7. Good Standing Certificates. The Administrative Agent
will have received certificates of recent date evidencing the legal existence
and good standing of the Seller and CFC.
SECTION 4.1.8. Representations and Covenants. On and as of the date
of the Purchase (i) the representations and warranties of the Seller set forth
in Article VII shall be true and correct with the same effect as if made on
such date and (ii) the Seller shall be in compliance
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with the covenants set forth in Article VIII. The Seller, by accepting the
proceeds of such Purchase, shall be deemed to have certified as to the truth
and accuracy of each of the matters described in the foregoing clauses (i) and
(ii).
SECTION 4.1.9. Other Documents. The Administrative Agent and the
Purchaser will have received all other documents that either of them had
reasonably requested from the Seller or the Servicer.
SECTION 4.1.10. Upfront Fee. The Seller shall have paid at closing
(i) a fee to the Administrative Agent in the amount of $20,000 which shall
include all upfront expenses, including but not limited to legal fees and
disbursements, filing and administrative fees, rating agency fees, liquidity
and credit enhancement fees incurred with respect to the Purchase and (ii) an
interest rate cap fee to the Purchaser in the amount of $616,000 in respect of
the agreement referred to in the definition of Hedging Proceeds
SECTION 4.1.11. Advance Ruling Certificate. The Seller shall have
obtained an Advance Ruling Certificate in connection with the sale of the
Purchased Receivables hereunder pursuant to the Competition Act (Canada).
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. On the last day of each Settlement Period,
or if such last day is not a Business Day, then on the next preceding Business
Day, the Servicer shall remit to the Administrative Agent that portion of
Collections for such Settlement Period which is not greater than the amount of
Carrying Costs for the related Settlement Period, as determined in accordance
with Section 3.1. Thereafter, the Servicer shall remit to the Administrative
Agent the balance, if any, of such Collections on the Settlement Date relating
to such Settlement Period. If the Seller is the Servicer on the Business Day
immediately following the date on which the long term debt rating of CFC by
Moody's Investor Services, Inc. or any successor thereof falls below Baa3 (or
its then equivalent), and until such time as CFC's rating is increased by
Moody's Investor Services, Inc. to at least Baa3 (or its then equivalent), the
Servicer shall, within two Business Days of receipt, pay all Collections
received by the Servicer to the Administrative Agent.
SECTION 5.2. Application of Collections. All Collections for each
Collection Period shall be applied by the Servicer as follows: With respect to
each Receivable, payments by or on behalf of the Obligor shall be applied
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 5.3(a) and, in the case of Simple
Interest Receivables, to reduce Outstanding Simple Interest Advances to the
extent described in Section 5.3(b). Next, any excess shall be applied, in the
case of Precomputed Receivables, to the scheduled payment and, in the case of
Simple Interest Receivables, to interest and principal in accordance with the
Simple Interest Method. With respect to Precomputed
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Receivables, to the extent that the sum of any remaining excess and the
Payahead Balance can be applied to prepay the Precomputed Receivable in full,
such remaining excess shall constitute a full payoff of such Precomputed
Receivable (a "Full Payoff"). To the extent that the sum of any remaining
excess, the Payahead Balance and one payment can be applied to prepay the
Precomputed Receivable in full, such remaining excess shall constitute a
partial payoff of such Precomputed Receivable ( a "Partial Payoff").
Otherwise, any such remaining excess payments shall constitute a Payahead and
shall increase the Payahead Balance.
SECTION 5.3. Advances.
(a) As of the close of business on the last day of each Collection
Period, if such payments by or on behalf of the Obligor on a
Precomputed Receivable shall be less than the scheduled payment, the
Payahead Balance shall be applied by the Servicer to the extent of
the shortfall and such Payahead Balance shall be reduced accordingly.
Next, the Servicer shall advance any remaining shortfall (such
amount, a "Precomputed Advance"), to the extent that the Servicer, at
its sole discretion, shall determine that the Precomputed Advance
shall be recoverable from the Obligor, the Purchase Amount,
Liquidation Proceeds or proceeds of any other Precomputed
Receivables. With respect to each Precomputed Receivable, the
Precomputed Advance shall increase Outstanding Precomputed Advances.
Outstanding Precomputed Advances shall be reduced by subsequent
payments by or on behalf of the Obligor, collections of Liquidation
Proceeds in respect of such Precomputed Receivables or payments made
by the Seller in accordance with Section 2.4 with respect to such
Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed
Advance with respect to any Precomputed Receivable shall not be
recoverable as aforesaid, the Servicer shall be reimbursed from any
collections made on other Precomputed Receivables and Outstanding
Precomputed Advances with respect to such Precomputed Receivables
shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective
APRs for the related Collection Period (assuming the Simple Interest
Receivables pay on their respective due dates) minus the amount of
interest actually received on the Simple Interest Receivables during
the related Collection Period (such amount, a "Simple Interest
Advance"). With respect to each Simple Interest Receivable, the
Simple Interest Advance shall increase Outstanding Simple Interest
Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to
the Servicer and the amount of Outstanding Simple Interest Advances
shall be reduced by such amount. In addition, in the event that a
Simple Interest Receivable becomes a Liquidated Receivable,
Liquidation Proceeds with respect to such Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not
including interest for the then current Collection Period)
<PAGE>
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shall be paid to the Servicer to reduce Outstanding Simple Interest
Advances, but only to the extent of any Outstanding Simple Interest
Advances. The Servicer shall not make any advance in respect of
principal of Simple Interest Receivables.
SECTION 5.4. Application of Collections and Hedging Proceeds on
Settlement Dates. Subject to Section 5.1, the Servicer will, by 12:00 noon
(Toronto time) on each Settlement Date, from Collections received during the
preceding Settlement Period, pay to the Administrative Agent and the
Administrative Agent shall on each Settlement Date distribute such Collections
to the Purchaser (i) first, an amount equal to the Carrying Costs for the
Settlement Period (as such amount shall be increased or decreased by the
Carrying Costs True-up Amount, if any, for the immediately preceding
Settlement Period as determined pursuant to Section 3.1.1(b)) and (ii) second,
all remaining Collections as a reduction to Investment. CFC will also, by the
same time on each Settlement Date, pay to the Administrative Agent all Hedging
Proceeds payable with respect to such preceding Settlement Period and the
Administrative Agent shall distribute such Hedging Proceeds to the Purchaser.
SECTION 5.5. Servicer Report. The Servicer will provide the Purchaser
either in writing or electronically, with a Servicer Report with respect to
each Settlement Period no later than the seventh Business Day following the
end of such Settlement Period.
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1.1 Power of Attorney. The Seller hereby appoints the
Purchaser, the Administrative Agent, any officer of the trustee of the
Purchaser or any officer of the Administrative Agent from time to time, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority, coupled with an interest, in the place and
stead of the Seller and in the name of the Seller or in the name of any such
attorney, from time to time in the Purchaser or Administrative Agent's
discretion, as the case may be, for the purpose of enforcing the Receivables,
the related Contracts and the Related Security.
SECTION 6.1.2 Appointment and Duties of Servicer. The Purchaser
hereby appoints the Seller as the Servicer and the Seller hereby accepts such
appointment. The Servicer, for the benefit of the Purchaser (to the extent
provided herein) and without payment to it of any fee in respect thereof so
long as the Seller is the Servicer, shall manage, service, administer, make
collections and discharge Adverse Claims on the 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. If the Servicer shall commence a legal
proceeding to enforce a Purchased Receivable, the Purchaser shall thereupon be
deemed to have automatically assigned, solely for the-purpose of collection,
such Purchased Receivables to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Purchased Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce such Purchased Receivable, the
Administrative
<PAGE>
- 18 -
Agent 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
Purchaser. The Purchaser 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 6.2. Replacement of Servicer.
(a) If any of the following events (a "Servicer Default") shall
occur and be continuing:
(i) any failure by the Servicer to make any payment or
deposit required to be made hereunder and the continuance of
such failure for a period of two Business Days (after
written notice thereof from the Purchaser if the Purchaser
or the Administrative Agent has actual notice of such
failure prior to the expiry of two Business Days after the
occurrence of such failure) or such longer period as may be
approved in writing by the Rating Agency;
(ii) any representation or warranty made by the Servicer in
Section 7.1 or any information set forth in a Servicer
Report or other certificate delivered to the Administrative
Agent, shall prove to have been incorrect in any material
respect when made and, provided that such representation or
warranty is capable of being subsequently made true and
correct, which continues to be incorrect in any material
respect for a period of thirty two days after the date on
which written notice thereof requiring the same to be
remedied has been given to the Servicer by the Purchaser or
the Administrative Agent or such longer period as may be
approved in writing by the Rating Agency;
(iii) failure on the part of the Servicer to observe or
perform in any material respect any other term, covenant or
agreement in this Agreement or any other Sale Document which
continues unremedied for thirty two days after the date on
which written notice of such failure requiring the same to
be remedied has been given to the Servicer by the Purchaser
or the Administrative Agent or such longer period as may be
approved in writing by the Rating Agency; or
(iv) an Insolvency Event with respect to the Seller or the
Servicer,
then, so long as such Servicer Default shall not have been remedied,
the Purchaser shall have the right to remove the Seller (or any
successor Servicer) as Servicer by giving written notice thereof to
the Servicer. On and after receipt of such written notice, all
authority and power of the Servicer under this Agreement shall,
without further action, pass to and be vested in such successor
Servicer as may be appointed by the Purchaser, provided, however,
that Servicer cannot be removed until a successor Servicer is
selected
<PAGE>
- 19 -
and appointed and such successor Servicer meets industry-wide
standards for being a Servicer of retail automotive receivables and
the successor Servicer shall have agreed to perform the duties and
obligations of the Servicer pursuant to the terms hereof and to be
bound by the terms of this Agreement.
(b) If the Seller is removed as Servicer, the Seller shall transfer
to any successor Servicer designated by the Purchaser all records,
correspondence and documents (including computer software) requested
by the Purchaser or such successor Servicer and permit such Persons
to have access to, and to copy, all software used by the Servicer in
the collection, administration or monitoring of the Purchased
Receivables. In the case of software that is then licensed by, or
otherwise made available to, the Servicer from or by any third party,
the Servicer shall use its best efforts to obtain such consents and
otherwise take all actions necessary in order to enable any Servicer
hereunder to succeed to all rights of the Seller to the use of such
software for the purpose of discharging the obligations of the
successor Servicer under or in connection with the Sale Documents.
(c) Following the removal of the Seller as Servicer, (i) the
Purchaser and the Administrative Agent may (a) notify Obligors of the
ownership interest of the Purchaser hereunder in the Purchased
Receivables and the Related Security, and (b) notify each issuer of
an Insurance Policy of the ownership interest of the Purchaser
hereunder in the Purchased Receivables and in the Related Security
(including the applicable Financed Vehicle and Insurance Policy
thereon), and (ii) the Purchaser and the Administrative Agent shall
have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under
the applicable PPSA and other applicable laws, which rights shall be
cumulative.
SECTION 6.3. Custody of Receivable Files. To assure uniform quality
in servicing the Purchased Receivables and to reduce administrative costs, the
Purchaser hereby irrevocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act for the benefit of the Purchaser and the
Seller as custodian of the following documents or instruments which are hereby
or will hereby be constructively delivered to the Administrative Agent as of
the Purchase Date with respect to each Purchased Receivable (the "Receivable
Files"):
(a) the fully executed original of the Contract related to such
Purchased Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) such documents that the Servicer 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 shall keep on
file, in accordance
<PAGE>
- 20 -
with its customary procedures, relating to a Purchased
Receivable, an Obligor or a Financed Vehicle.
SECTION 6.4. Duties of Servicer as Custodian. The Servicer shall hold
the Receivable Files as custodian for the benefit of the Seller and the
Purchaser and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the Seller
and the Servicer 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 receivable
files relating to all comparable automotive receivables that the Servicer
services for itself or others.
SECTION 6.5. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cut-Off Date and
shall continue in full force and effect until terminated pursuant to this
Section. If the Seller shall cease to be Servicer in accordance with the
provisions of this Agreement, the appointment of such Servicer as custodian
shall be terminated by the Purchaser. The Purchaser may terminate the
Servicer's appointment as custodian at any time following the occurrence of a
Servicer Default under Section 6. 2(a) upon thirty days written notification
to the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files to the
Administrative Agent or to a Person designated by the Administrative Agent at
a place or places as the Administrative Agent may reasonably designate.
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Seller. The Seller
makes in its capacity as Seller and Servicer the following representations and
warranties to the Purchaser as of the date hereof and the Purchase Date:
(a) It is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation
and is duly qualified in good standing in each jurisdiction where the
failure to be so qualified could materially adversely affect its
ability to perform its obligations hereunder.
(b) The execution, delivery and performance by the Seller of the Sale
Documents, and the Seller's use of the proceeds of the Purchase, are
within the Seller's corporate powers, have been duly authorized by
all necessary corporate action, do not contravene (i) the Seller's
articles of incorporation or by-laws or (ii) any law or contractual
restriction binding on or affecting the Seller, and do not result in
or require the creation of any Adverse Claim (other than pursuant
hereto) upon or with respect to any of its properties; and no
transaction contemplated hereby requires compliance with any bulk
sales act or similar law.
<PAGE>
- 21 -
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the
Seller of the Sale Documents, or for the perfection of or the
exercise by the Purchaser of its rights and remedies under the Sale
Documents, except for the filing of the financing statements or other
documents referred to in Section 4.1.2 and except for compliance with
Section 4.1.11.
(d) Each Sale Document constitutes the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms.
(e) There is no pending or threatened action or proceeding affecting
the Seller or any of its subsidiaries before any court, governmental
agency or arbitrator which may materially adversely affect (i) its
financial condition or operations or (ii) its ability to perform its
obligations under the Sale Documents, or which could affect the
legality, validity or enforceability of any Sale Document or of the
interests of the Purchaser in the Purchased Assets.
(f) The Seller is the legal and beneficial owner of the Receivables,
the Related Security and Collections, each Purchased Receivable will
be an Eligible Receivable on the Purchase Date and the Receivables
and Collections are free and clear of any Adverse Claim, except as
created by this Agreement; upon consummation of the Purchase, the
Purchaser will acquire a valid ownership interest in the Purchased
Receivables and in the Related Security and the Collections with
respect thereto, and the Receivables and Collections will be free and
clear of any Adverse Claim except as created by this Agreement.
(g) The information to be provided by the Seller to the Servicer for
use in each Servicer Report prepared under Section 5.5 and all
information and Sale Documents furnished or to be furnished at any
time by the Seller to the Administrative Agent in connection with
this Agreement is or will be accurate in all material respects as of
its date.
(h) The Seller is treating the sale and assignment to the Purchaser
under this Agreement of the Purchased Receivables, Related Security
and Collections as a sale for all purposes.
ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller. Until the
Investment is reduced to zero and all other amounts to be remitted to the
Purchaser hereunder have been paid in full, the Seller in its capacity as
Seller and Servicer covenants and agrees with the Purchaser that it will,
unless the Purchaser has otherwise consented in writing:
<PAGE>
- 22 -
(a) comply with all laws, rules, regulations and orders applicable to
it and all or any of its businesses and properties, except where the
failure to do so would not materially adversely affect the
Purchaser's interest hereunder or its ability to perform its
obligations hereunder;
(b) maintain its existence in the jurisdiction of its incorporation,
and qualify and remain qualified in good standing in each
jurisdiction where the failure to be so qualified could materially
adversely affect its ability to perform its obligations hereunder;
(c) maintain and implement administrative and operating procedures,
and keep and maintain all records and other information, reasonably
necessary or advisable for the collection of the Purchased
Receivables (including, without limitation, records adequate to
permit the daily identification of Purchased Receivables and all
Collections and adjustments to Purchased Receivables);
(d) at any time and from time to time, after the occurrence of a
Servicer Default which is continuing, during regular business hours,
permit the Administrative Agent, its agents or representatives upon
five Business Days' prior written notice to (i) examine and make
copies of all Receivable Files in its possession (or under its
control), and (ii) visit its zone offices for the purpose of
examining such Receivable Files and discussing matters relating to
the Related Security and its performance under the Purchased
Receivables or hereunder with any of its officers or employees having
knowledge of such matters;
(e) at its expense timely and fully perform and comply with all
material provisions and covenants required to be observed by the
Seller under the Contracts related to the Purchased Receivables;
(f)comply in all material respects with the Credit and Collection
Policy in regard to each Purchased Receivable and any Contract
related to such Receivable;
(g) make all payments payable by it to government agencies in
accordance with applicable law and others where a statutory lien or
deemed trust might arise having priority over the Purchaser's
interest in any Purchased Receivables and Related Security;
(h) take all steps necessary to obtain the discharge of any financing
statement, registration, recording, filing or other document similar
in effect relating to any Purchased Receivables, Related Security or
Collections except those in favour of the Purchaser in accordance
herewith or subordinate to the rights of the Purchaser thereunder;
and
<PAGE>
- 23 -
(i) treat the sale and assignment to the Purchaser under this
Agreement of the Purchased Receivables, Related Security and
Collections as a sale for all purposes.
SECTION 8.2. Reporting Requirements of the Servicer. Until the
Investment is reduced to zero and all amounts to be remitted to the Purchaser
hereunder have been paid in full, the Seller in its capacity as Seller and
Servicer covenants and agrees with the Purchaser that it will, unless the
Purchaser shall otherwise consent in writing, furnish to the Purchaser:
(a) the Servicer Report as required under Section 5.5;
(b) as soon as possible, and in any event within five Business Days
after the Servicer becomes aware thereof, a description of each event
or condition (each such event or condition being referred to as a
"Significant Event") and, if applicable, the steps being taken with
respect thereto by the Person(s) affected thereby that is: (i) the
occurrence of any Servicer Default or event which with the passage of
time or the giving of notice or both would constitute a Servicer
Default or (ii) the institution of any litigation, arbitration
proceeding or governmental proceeding which could be reasonably
likely to have a material adverse effect on the performance by the
Servicer of its obligations under this Agreement or the other Sale
Documents or the collectibility of the Purchased Receivables; and
(c) such other information, documents, records or reports respecting
the Purchased Receivables or the condition or operations, financial
or otherwise, of the Servicer as the Purchaser may from time to time
reasonably request.
SECTION 8.3. Negative Covenants of the Servicer. Until the Investment
is reduced to zero and all other amounts to be remitted to the Purchaser
hereunder have been paid in full, the Servicer covenants and agrees with the
Purchaser that it will not, unless the Purchaser has otherwise consented in
writing;
(a) except as provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of or create any Adverse Claim upon
or with respect to any Purchased Receivables, Related Security or any
Collections or assign any right to receive income in respect thereof
or suffer to exist any Adverse Claim upon or with respect to any
Purchased Receivables or any Collections;
(b) amend or otherwise modify the terms of any Purchased Receivable,
or amend, modify or waive any term or condition of any Contract
related thereto, in each case, in any manner which is inconsistent
with the Credit and Collection Policy; or
(c) extend the term of any Purchased Receivable if such extension
would be adverse to the Purchaser.
<PAGE>
- 24 -
SECTION 8.4. Protection of the Purchaser's Interest. Until the
Investment is reduced to zero and all other amounts to be remitted to the
Purchaser hereunder have been paid in full, the Seller in its capacity as
Seller and Servicer covenants and agrees with the Purchaser that from time to
time, at its expense, it will promptly execute and deliver all instruments and
documents and take all action that the Administrative Agent may from time to
time reasonably request in order to evidence and protect the validity and
enforceability of the Purchaser's interests in the Purchased Receivables, the
Related Security and the Collections and to enable the Administrative Agent
and/or the Purchaser to exercise or enforce any of their respective rights
under the Sale Documents. Without limiting the generality of the foregoing,
the Seller will: (i) on or prior to the date hereof, mark its master data
processing records relating to the Purchased Receivables with a legend
describing the Purchaser's interests therein; and (ii) upon the request of the
Administrative Agent, execute and file such financing statements or amendments
thereto as may be requested by the Administrative Agent.
ARTICLE IX: ADMINISTRATIVE AGENT
SECTION 9. 1. Appointment of Administrative Agent. The Purchaser has
appointed Nesbitt Burns Inc. as its Administrative Agent. The Administrative
Agent is responsible for administering and enforcing this Agreement and
fulfilling all other duties expressly assigned to it in this Agreement. The
Purchaser has granted the Administrative Agent the authority to take all
actions necessary to assure the Seller's compliance with the terms of this
Agreement and to take all actions required or permitted to be performed by the
Purchaser under this Agreement.
SECTION 9.1.1. Replacement of Administrative Agent. The Purchaser
may, at any time in its discretion but at no additional expense to the Seller,
remove the Administrative Agent and appoint a new Administrative Agent, which
shall have the duties described in Section 9.1.
ARTICLE X: COVENANTS OF CFC
SECTION 10.1. Covenants of CFC. Until the Investment is reduced to
zero and all other amounts to be remitted to the Purchaser hereunder have been
paid in full, CFC covenants and agrees with the Purchaser that it will, unless
the Purchaser has otherwise consented in writing:
(a) comply with all laws, rules, regulations and orders applicable to
it and all or any of its businesses and properties, except where the
failure to do so would not materially adversely affect the
Purchaser's interest hereunder or its ability to perform its
obligations hereunder;
<PAGE>
- 25 -
(b) preserve and maintain its corporate existence, except in the case
of a merger or other action permitted under the Short Term Revolving
Credit Agreement and the Long Term Revolving Credit Agreement each
dated as of April 26, 1996 between it and Chemical Bank, as
administrative agent and Royal Bank of Canada, as Canadian
administrative agent, and the several banks party thereto, as
amended, modified, supplemented or restated from time to time, and
where the continuing or surviving entity assumes CFC's obligations
hereunder;
(c) furnish to the Purchaser, unless the Seller has previously
complied with Section 8.2(b), as soon as possible and in any event
within five Business Days after CFC becomes aware of the occurrence
of each Significant Event, a statement of an officer of CFC setting
forth details as to such Significant Event and the action which CFC
or the Seller or Servicer has taken or is proposing to take with
respect thereto;
(d) at any time following the occurrence of a Significant Event which
is continuing, ensure the due performance of all of the obligations
of the Seller (including those arising in its capacity as Servicer,
if the Seller is at such time the Servicer) under this Agreement and,
in the event of any failure of the Seller to perform such
obligations, assume all of the liabilities of the Seller (including
those arising in its capacity as Servicer, if the Seller is at such
time the Servicer) hereunder;
(e) make all payments to be made by it in the performance of its
obligations hereunder without set-off or counterclaim and without
deduction or withholding for or on account of any present or future
taxes, levies, imposts, duties, charges, assessments or fees of any
nature (including any interest, penalties and additions thereto)
unless such deduction or withholding is required by any applicable
treaty, law, rule or regulation (as modified by the practice of any
relevant governmental revenue authority then in effect), in which
case it shall pay to the Purchaser, in addition to any payment to
which the Purchaser is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by the Purchaser will equal the full amount the
Purchaser would have received had no such deduction or withholding
been required; and
(f) continue to hold such number of shares in the capital of the
Seller such that the Seller is at all times a subsidiary of CFC.
ARTICLE XI: MISCELLANEOUS
SECTION 11.1. Amendments, Etc. No amendment or waiver of, or consent
to the Seller's or the Servicer's departure from, any provision of this
Agreement shall be effective unless it is in writing and signed by the parties
hereto and then such amendment, waiver or
<PAGE>
- 26 -
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 11.2. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including photocopy, facsimile, electronic mail or other digital
communication) and sent, as to each party hereto, at its address set forth
under its name on the signature pages hereto, or at such other address as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective when sent.
SECTION 11.3. No Waiver; Remedies. No failure on the part of the
Purchaser to exercise, and no delay in exercising, any right hereunder or
under any Sale Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 11.4. Binding Effect; Assignability. This Agreement shall be
binding upon and enure to the benefit of the Seller, the Servicer, CFC, the
Purchaser, the Administrative Agent and their respective successors and
assigns, except that the Seller shall not have the right to assign any
interest herein without the prior written consent of the Purchaser. The
Purchaser may assign any of its rights or obligations hereunder to any Person;
provided, that in the case of any such assignment proposed to be made prior to
the occurrence of a Servicer Default, the consent of the Seller (which consent
shall not be unreasonably withheld) shall be required.
SECTION 11.5. Governing Law. This Agreement and the Sale Documents
shall be governed by, and construed in accordance with, the laws of the
province of Ontario and the federal laws of Canada applicable therein.
SECTION 11.6. Confidentiality. The Purchaser and the Administrative
Agent agree to maintain the confidentiality of any information regarding the
Seller obtained in connection with this Agreement which is not publicly
available, but the Purchaser and the Administrative Agent may, with notice to
the Seller, reveal such information, (a) to applicable rating agencies,
liquidity providers and credit enhancement providers, (b) as necessary or
appropriate in connection with the administration or enforcement of this
Agreement or its funding of the Purchase under this Agreement, (c) as required
by law, government regulation, court proceeding or subpoena or (d) to bank
regulatory agencies and examiners.
SECTION 11.7. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same agreement.
<PAGE>
- 27 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers as of the date set forth on the cover page of
this Agreement.
CHRYSLER CREDIT CANADA LTD.
as Seller and Servicer
By: "D.M. Cantwell"
______________________________________
Title: Vice President and Treasurer
____________________________
Address: #308 - 390 Brant Street
Burlington, Ontario
L7R 4J4
Attention: Assistant Secretary
Facsimile: 905-333-2723
With a copy to:
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
CHRYSLER FINANCIAL CORPORATION
as Performance Guarantor
By: "D.M. Cantwell"
_______________
Title: Vice President and Treasurer
____________________________
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 810-948-3138
<PAGE>
- 28 -
CANADIAN MASTER TRUST
by its Administrative Agent,
NESBITT BURNS INC.
as Purchaser
By: "I. Bandeen"
________________________
Title: Managing Director
_________________
Address: Canadian Master Trust
c/o Nesbitt Burns Inc.
3rd Floor Podium
1 First Canadian Place
Toronto, Ontario
M5X 1H3
Attention: Managing Director,
Securitization and Structured Finance
Facsimile: 416-359-1910
NESBITT BURNS INC.,
as Administrative Agent
By: "I. Bandeen"
____________
Title: Managing Director
_________________
Address: 3rd Floor Podium
1 First Canadian Place
Toronto, Ontario
M5X 1H3
Attention: Managing Director,
Securitization and Structured Finance
Facsimile: 416-359-1910
EX. 10-WWWW
- 1 -
LOAN AGREEMENT
dated as of 1 August, 1996
BETWEEN
CHRYSLER CANADA LTD.
as Borrower
- and -
CHRYSLER CREDIT CANADA LTD.
as Lender
<PAGE>
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THIS AGREEMENT made as of the 1st day of August, 1996
B E T W E E N:
CHRYSLER CANADA LTD., a subsisting corporation
under the laws of Canada
(hereinafter called the "Borrower")
OF THE FIRST PART
- - and -
CHRYSLER CREDIT CANADA LTD., a subsisting
corporation under the laws of Canada
(hereinafter called the "Lender")
OF THE SECOND PART
WITNESSETH THAT in consideration of the mutual covenants herein
contained and other good and valuable consideration now paid by each party
hereto, the one to the other, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
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ARTICLE ONE
INTERPRETATION
1.01 Definitions
For purposes of this Agreement:
"Agreement" means this agreement as the same may be amended or supplemented
from time to time, and the expressions "herein", "hereof", "hereto", "above",
"below" and similar expressions refer to this agreement and, where applicable,
to the appropriate Schedule or Schedules hereto;
"Borrower's Counsel" means Fasken Campbell Godfrey, Barristers and Solicitors
of Toronto, Ontario or such other counsel not unacceptable to the Lender as
the Borrower may designate to the Lender in writing from time to time;
"Borrowing Date" means the date on which any advance is made by the Lender
hereunder;
"Business Day" means any day other than a Saturday, Sunday or statutory or
civic holiday or other day on which banks in Windsor, Ontario are authorized
or required by law to close;
"Collections" means in respect of a Tranche Pool all amounts received by the
Lender in respect of (i) the indebtedness or liability of lessees under Leases
in that Tranche Pool, (ii) collateral security relating to such Leases, (iii)
guarantees relating to such Leases, (iv) proceeds of insurance relating to
such Leases and (v) the net amount realized upon the disposition of the Leased
Vehicles subject to such Leases;
"Event of Default" means any of the events or circumstances enumerated in
Section 6.01;
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"Fiscal Year" means the 12 month period ending on December 31st in each year;
"including" shall be interpreted on an inclusive basis and without limit;
"Interest Rate" means with respect to any particular advance, the effective
yield expressed as a rate per annum on Government of Canada treasury bills
with a two year maturity as published in Reuters as of the close of business
on the last Business Day of the month preceding the month in which the
particular advance is made, plus 1.4% per annum; provided that, if Reuters in
publishing such rate relies on treasury bills with a maturity that is not two
years or within two months (plus or minus) of two years, the effective yield
shall be determined by interpolating the two year point between the most
recently issued Government of Canada treasury bills having original maturities
between two and three years;
"Lease" means a motor vehicle lease agreement made between a dealer and a
lessee pursuant to the Chrysler Credit Gold Key Retail Lease Program, in
respect of which the Borrower is the beneficial owner of such lease and motor
vehicle and which is administered by the Lender on behalf of the Borrower;
"Leased Vehicle" means a new and unused automobile, light duty truck or other
vehicle manufactured or distributed by the Borrower together with any
accessions thereto that is subject to a Lease;
"Lender's Counsel" means Gowling, Strathy & Henderson of Toronto, Ontario;
"Net Book Value" means the net book value of a Lease determined in accordance
with the Lender's standard method of accounting for direct financing leases;
"Net Outstanding Lease Balance" means for any Tranche Pool the aggregate Net
Book Value of the Leased Vehicles for all Leases in that Tranche Pool as
recorded in the records of the Lender less outstanding security deposits for
that Tranche Pool;
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"Person" means an individual, partnership, joint venture, trust, corporation,
unincorporated organization or any other juridical entity or a governmental
state or agency or political subdivision thereof;
"Revolving Credit" has the meaning attributed thereto in Section 2.01;
"Revolving Credit Final Repayment Date" means the date, which shall be not
earlier than the fifth anniversary date of the Initial Borrowing Date (or, if
that day is not a Business Day, then the next following Business Day),
specified by either the Borrower or the Lender by notice to that effect which
notice shall be given not less than 30 days prior to the relevant date;
"Settlement Date" means, with respect to any month or portion thereof, the
last Business Day of the next following month;
"Tranche" means the aggregate of all advances of the Revolving Credit made by
the Lender to the Borrower pursuant to this agreement during a month;
"Tranche Pool" has the meaning ascribed thereto in Section 2.07.
1.02 Applicable Law
This Agreement is made pursuant to the laws of the Province of
Ontario and shall be governed by and construed, interpreted and performed in
accordance therewith.
1.03 Invalidity, Etc. of Provisions
If any of the provisions contained in this Agreement is invalid,
illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
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1.04 Schedules
The following are the Schedules hereto and are hereby
incorporated herein:
Schedule 2.08 - Security Agreement
Schedule 3.01 - Notice of Utilization of Credit Facilities
ARTICLE TWO
CREDIT FACILITIES
2.01 Lender's Commitment to Lend
Subject to the terms and conditions hereof, the Lender hereby
establishes in favour of the Borrower a revolving credit (herein called the
"Revolving Credit") in the maximum principal amount of $1,500,000,000
outstanding at any time which shall be available to the Borrower for the
purpose of funding the purchase by the Borrower of Leased Vehicles and related
Leases and all amounts owing or to become due thereunder or in respect
thereof, it being agreed that any such purchase may be effected at any time or
from time to time unless 90 days' notice of the termination of further
availability of the Revolving Credit has been given by the Lender, no such
notice to be given prior to the first anniversary of the initial Borrowing
Date. The maximum amount that may be required to be advanced under
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the Revolving Credit on any day is the amount then due and owing by the
Borrower to the Lender on account of the purchase price paid by the Lender as
agent of the Borrower to acquire Leased Vehicles and related Leases.
2.02 Interest Rate
Subject to the provisions hereof, the principal amount of the
advances for each Tranche outstanding as at the close of business for a month
shall remain outstanding at least until the last day of the next following
month. Interest shall be calculated thereon for such next following month,
before and after maturity, Default and, to the extent permitted by law,
judgment (with interest on overdue interest), at the Interest Rate relevant
for such Tranche. Interest payable for each month shall be paid on the last
day of such next following month.
2.03 Borrowing Accounts
The Lender shall maintain and keep its own accounts recording
the aggregate amount of all sums advanced by it for each Tranche and that
remain outstanding hereunder from time to time, and the dates thereof together
with the interest charges accrued thereon from time to time and all payments
of principal (including prepayments), payments of interest and other payments
made by the Borrower to it from time to time pursuant to this Agreement. The
accounts kept by the Lender shall constitute, in the absence of manifest
error, prima facie evidence of the respective amounts advanced and that remain
outstanding,
<PAGE>
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of such interest and other amounts owing to the Lender, and of such payments
of principal, interest or otherwise to the Lender.
2.04 Mandatory Reduction
Effective on the Revolving Credit Final Repayment Date, the
Revolving Credit shall terminate and the Borrower's entitlement to utilize the
Revolving Credit shall be at an end; the Borrower covenants and agrees to pay
all outstanding advances plus accrued and unpaid interest under the Revolving
Credit on the Revolving Credit Final Repayment Date.
2.05 Timing of Payments
All payments pursuant to this Agreement, whether on account of
principal, interest, fees or otherwise, shall be effected no later than 11:00
a.m. (Windsor time) on the relevant day, failing which they shall only be
deemed to have been effected on the next following Business Day.
2.06 Prepayments
Subject to the provisions hereof, the Borrower may from time to
time prepay, without premium or penalty, such amounts as the parties hereto
may from time to time agree upon, provided, however, that any such prepayment
shall be effected only on the last day of
<PAGE>
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a month. Any prepayment as aforesaid shall be permanent as regards such
Tranche but shall not reduce the maximum amount of the Revolving Credit unless
the Borrower so designates at the time of such prepayment.
2.07 Application of Collections; Repayments
(a) Effective the end of a month in which one or more advances are made
hereunder, the Lender shall identify in its records a pool (a "Tranche Pool")
of Leases acquired by the Borrower during such month for the purpose of
applying Collections received therefrom on behalf of the Borrower to the
payment of amounts owing hereunder by the Borrower in respect of such
advances. All Collections received by the Lender in any month from the
administration of Leases on behalf of the Borrower that are in a Tranche Pool
for a particular Tranche (excluding any amounts which the Lender is otherwise
entitled to retain for its own benefit, amounts required to be remitted or
paid by the Borrower on account of sales, use, goods and services or other
similar taxes and amounts that are required to be paid to third parties) shall
be held by the Lender in trust (without any obligation to segregate the amount
thereof or to pay interest thereon for any portion of the month during which
such Collections are reserved and held by the Lender) and applied on, and not
before, the last day of such month in the following order until exhausted:
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(i) to pay all accrued and unpaid interest owing for that
Tranche as at the end of that month;
(ii) to pay as a repayment of principal the amount, if any, by
which the principal portion of such Tranche exceeds the Net
Outstanding Lease Balance for the Tranche Pool for that
Tranche at the end of that month;
(iii) to pay as a repayment of principal the amount, if any, by
which the principal portion of any other Tranche exceeds
the Net Outstanding Lease Balance for the Tranche Pool for
that Tranche at the end of that month; and
(iv) to pay any other amount due and owing under this
Agreement.
Any balance remaining shall be paid to the Borrower on the
Settlement Date in respect of such month.
(b) In addition to the foregoing repayments, the Borrower shall pay to the
Lender the balance outstanding in respect of any Tranche on the Settlement
Date occurring in the 60th month following the month in which such Tranche was
created.
2.08 Security
As security for the due and punctual payment of all
indebtedness and other amounts now or hereafter owing to the Lender by the
Borrower under this Agreement the Borrower shall enter into a purchase money
security agreement substantially in the form
<PAGE>
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annexed hereto as Schedule 2.08 - Security Agreement whereby the Borrower
shall grant to the Lender a purchase money security interest in all of the
Borrower's right, title and interest in and to all (i) Leased Vehicles and
related Leases and all amounts owing or to become due thereunder or in respect
thereof, (ii) Collections and (iii) proceeds of the foregoing.
2.09 Optional Cancellation or Reduction of Credits
The Borrower may cancel and terminate any unutilized portion of
the Revolving Credit permanently, provided that such cancellation and
termination shall be effected only on a Business Day which is at least ten
Business Days subsequent to the date on which the Lender has received
irrevocable written notice from the Borrower as to such cancellation and
termination and provided further that such cancellation and termination:
(a) shall be a minimum amount of either $1,000,000 or, if less,
the amount of the Revolving Credit;
(b) shall be automatically adjusted in amount to the amount of
the unutilized portion of the Revolving Credit on the
effective date of such cancellation and termination if the
amount specified in the notice thereof exceeds the
unutilized portion of such credit.
<PAGE>
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ARTICLE THREE
CONDITIONS OF LENDING
3.01 Utilization of the Revolving Credit
Subject to the provisions hereof, the Borrower shall give the
Lender not less than two Business Days' notice in the case of advances (or
such lesser period as the Lender may permit).
Any such notice shall be irrevocable and may be given in the
Borrower's discretion by telephone or by notice substantially in the form of
Schedule 3.01 - Notice of Utilization of Credit Facilities and shall be
received no later than 11:00 a.m. (Windsor time) on the relevant day, failing
which it shall be deemed to have been received on the next following Business
Day. Each such notice shall specify the date of the requested advance which
shall be a Business Day and the amount.
3.02 Conditions Precedent to Each Utilization of the Revolving Credit
The obligation of the Lender to make available the Revolving
Credit to the Borrower is subject to prior satisfaction on or before each
Borrowing Date of each of the following conditions precedent, which conditions
precedent are inserted for the sole and
<PAGE>
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exclusive benefit of the Lender and may be waived by it in writing in its
discretion:
(a) the representations and warranties set out in Article 4
shall be true and correct on each Borrowing Date as if made
on such date;
(b) no Default shall have occurred and be continuing on the
Borrowing Date either before or after giving effect to any
proposed utilization of any portion of the Revolving Credit;
(c) the notice referred to in Section 3.01 shall have been
received by the Lender.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the Borrower
The Borrower represents and warrants to and in favour of the
Lender as follows:
(a) Corporate Existence and Authority. The Borrower is a
corporation validly incorporated and existing in good
standing under the laws of its jurisdiction of
incorporation, has the legal right and all necessary
corporate power and authority to own its material
properties and assets and the corporate power and authority
to carry on business as now carried on by it or as
contemplated hereunder to be carried on by it.
<PAGE>
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(b) Corporate Authority. The Borrower has the legal right,
corporate power and authority to enter into this Agreement
and to do all acts and things and execute and deliver all
other documents and instruments as are required hereunder
to be done,observed or performed by it in accordance with
the terms hereof.
(c) Valid Authorization of this Agreement. The Borrower has
taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
(d) Validity and Binding Effect. This Agreement constitutes a
valid and legally binding obligation of the Borrower
enforceable against it in accordance with its terms.
(e) Financial Condition. Since the date of the last audited
consolidated financial statements of the Borrower, true
copies of which have been delivered to the Lender, there
has been no development materially and adversely affecting
the financial condition or position of the Borrower and its
subsidiaries taken as a whole. Such financial statements
were prepared in accordance with generally accepted
accounting principles and fairly present the business and
financial condition of the Borrower and its subsidiaries on
a consolidated basis as at their date.
ARTICLE FIVE
AFFIRMATIVE COVENANTS
5.01 Covenants of the Borrower
The Borrower covenants and agrees to and in favour of the
Lender that, so
<PAGE>
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long as the Borrower has any liabilities or obligations with respect to all or
any portion of the Revolving Credit or any liabilities hereunder, the Borrower
shall, unless the Lender otherwise consents in writing:
(a) Punctual Payment. Punctually pay the principal of and
interest on the advances to it and all other sums falling
due hereunder and payable by it on the dates and in the
mannerspecified herein;
(b) Advise of Default. Notify the Lender in writing, forthwith
and in any event within two Business Days, upon becoming
aware of any Default.
ARTICLE SIX
EVENTS OF DEFAULT AND REMEDIES
6.01 Events of Default
If any of the following events (herein called "Events of
Default") shall occur and be continuing, then the Lender may by notice to the
Borrower declare all amounts outstanding hereunder and all other amounts
payable by the Borrower provided for herein to be immediately due and payable:
(a) if the Borrower fails to pay any principal payable
hereunder when due or fails to pay any interest, fees or
costs payable hereunder within three Business Days of the
due date therefor;
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(b) if any representation or warranty made by the Borrower
herein or in any certificate or other document delivered by
any director or officer of the Borrower in connection
herewith or in connection with any other agreement
heretofore, now or hereafter entered into with the Lender
shall have been found to be false or incorrect in any way
as of its date so as to make it materially misleading and,
to the extent the same is capable of being remedied, the
same has not been remedied within 10 Business Days after
receipt of notice from the Lender of same;
(c) if the Borrower shall default in the performance of or
compliance with any other term, condition, or covenant
contained herein or in any other agreement or undertaking
heretofore, now or hereafter entered into with the Lender
and such default has not been remedied or cured within 10
Business Days after receipt of notice from the Lender of
such default;
(d) if the Borrower shall not generally pay its debts as such
debts become due or shall admit in writing its inability
to pay its debts generally or shall make a general
assignment for the benefit of creditors or shall convey or
transfer any of its property with a view to delaying,
defeating or hindering creditors or any proceedings shall
be instituted by or against the Borrower seeking to
adjudicate it a bankrupt or insolvent or seeking
liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief or composition of it or of
its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or other similar
law or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property (excluding proceedings being contested in good
faith so long as any enforcement proceedings are stayed)
or the Borrower shall take corporate action to authorize
any of the actions set forth above in this subsection (d);
(e) if the Borrower shall fail to pay any indebtedness in
excess of $10,000,000 in the aggregate when due (whether
at scheduled
<PAGE>
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maturity or by required prepayment, acceleration, demand or
otherwise) and such failure shall continue after any
applicable grace period; or
(f) if an order shall be made or an effective resolution passed
for the winding-up, liquidation or dissolution of the
Borrower.
<PAGE>
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6.02 Remedies upon Default
Upon the occurrence of any Event of Default and the Lender
making the declaration permitted by Section 6.01, the Lender may cancel unused
commitments and commence such legal actions or proceedings (including such as
are provided for herein) at such times and in such manner as the Lender in its
sole discretion may deem expedient, and may exercise such rights and take such
other actions and commence such other proceedings as may be permitted at law
or in equity, all without, except as may be required by law, any additional
notice, presentation, demand, protest, noting of protest, dishonour, entering
into possession of any of the property or assets of the Borrower or any other
action, notice of all of which the Borrower hereby expressly waives to the
extent permitted by law. The rights and remedies of the Lender hereunder are
cumulative and are in addition to and not in substitution for any other rights
or remedies provided by law.
6.03 Costs and Expenses of Collection
All costs and expenses of establishing the validity and
enforceability of this Agreement or of collection of amounts owing hereunder
shall be for the account of the Borrower and shall be repayable on demand with
interest payable in arrears (with interest on overdue interest) at an annual
rate equal to the prime rate of interest from time to time charged by Royal
Bank of Canada.
<PAGE>
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ARTICLE SEVEN
GENERAL
7.01 Non-Merger
All covenants, agreements, representations and warranties of
the Borrower made herein or in any certificate or other document signed by any
of its directors or officers delivered by or on behalf of it pursuant hereto
are material, shall be deemed to have been relied upon by the Lender
notwithstanding any investigation heretofore or hereafter by the Lender or the
Lender's Counsel or any other representative of the Lender and shall survive
the execution and delivery of this Agreement until the Borrower shall have
satisfied and performed all of its obligations hereunder.
7.02 Waiver
No failure or delay on the part of the Lender in exercising any
right or privilege hereunder or under any other instrument delivered to the
Lender pursuant hereto and no indulgence or forbearance by the Lender in
respect of the strict application of the provisions hereof or thereof shall
operate as a waiver unless made in writing and signed by an officer of the
Lender. Any written waiver by the Lender shall not preclude the further or
other exercise by the Lender of any right, power or privilege hereunder or
extend to or apply to any subsequent Default of the same or any other nature.
<PAGE>
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7.03 Notices
Any notice, consent, declaration or other communication
required or permitted to be given or made hereunder shall be in writing and
shall be well and sufficiently given or made if:
(a) delivered in person during normal business hours on a
Business Day and left with an officer of the addressee or
a receptionist or other responsible employee at the
relevant address set forth below; or
(b) telecopied or sent by other means of recorded electronic
communication to the number (or other relevant address)
set forth below;
if to the Borrower addressed to it at:
2450 Chrysler Center
Windsor, Ontario
N8W 3X7
Attention: Treasurer
Telecopier: 519-973-4310
if to the Lender addressed to it at
27777 Franklin Road
Southfield, Michigan 48934
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Attention: Vice-President and Treasurer
Telecopier: 810-948-3138
Any notice, consent, declaration or other communication so
given or made shall be deemed to have been given, made and received on the day
of delivery if delivered as aforesaid or, if telecopied or sent by other means
of recorded electronic communication as aforesaid, on the date of such
telecopying or sending, if telecopied or sent by 5:00 p.m. (Windsor time) on a
Business Day, and otherwise on the next following Business Day.
Any party hereto may from time to time change its address for
notice by notice to the other party hereto given in the manner aforesaid.
7.04 Time
Time shall be of the essence of this Agreement.
7.05 Further Assurances
The Borrower, whether before or after the happening of an Event
of Default, shall at its expense make, execute, deliver or cause to be done,
executed and delivered all such further acts, documents and things, in
connection with the Revolving Credit as the Lender's Counsel may reasonably
require, for the purposes of giving effect to this Agreement including for the
purpose of exercising all powers, authorities and discretions hereby
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conferred upon or acquired by the Lender, all immediately upon the reasonable
request of the Lender or the Lender's Counsel.
7.06 Assignment
(a) Benefit and Burden of this Agreement:
This Agreement shall enure to the benefit of and be binding on
the parties hereto, their respective successors and any
assignee or transferee of some or all of the parties' rights or
obligations under this Agreement permitted by clause (b) of
this Section 7.06. Any reference in this Agreement to any party
shall be construed accordingly.
(b) Borrower:
The Borrower shall not assign or transfer all or part of its
rights or obligations in respect of the Revolving Credit under
this Agreement without the prior consent in writing of the
Lender which consent may not be unreasonably withheld.
7.07 Payment of Expenses Generally
The Borrower covenants and agrees to and in favour of the
Lender that it shall pay all of the Lender's reasonable out-of-pocket expenses
in connection with this Agreement including all of the reasonable fees,
expenses and disbursements of the Lender's Counsel incurred in connection
therewith, in connection with any actual or proposed amendment or modification
hereof or any waiver hereunder, in connection with advising the Lender
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generally at any time while any amounts are owing by the Borrower hereunder on
the subject matter hereof and the transactions contemplated hereby, and in
connection with the defence, establishment, protection and/or enforcement of
any of the rights or remedies of the Lender hereunder.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
CHRYSLER CANADA LTD.
By: M. Schmid
By: G. Gaudette
CHRYSLER CREDIT CANADA LTD.
By: D. M. Cantwell
<PAGE>
3.01 - 24
SCHEDULE 3.01
NOTICE OF UTILIZATION OF CREDIT FACILITIES
TO: CHRYSLER CREDIT CANADA LTD.
Reference is made to a loan agreement (the "Loan Agreement")
made as of August 1, 1996 between Chrysler Canada Ltd. and Chrysler Credit
Canada Ltd. All terms used herein with initial capital letters and defined in
the Loan Agreement have the meanings attributed thereto in the Loan Agreement.
Notice is hereby given pursuant to the provisions of Section
3.01 of the Loan Agreement that the undersigned Borrower requests that:
1. an advance be made;
2. the aggregate principal amount of the advance shall be $___;
3. the Borrowing Date shall be ___;
The representations and warranties contained in Article Four of
the Loan Agreement are hereby repeated as if made on the Borrowing Date.
No Default has occurred and is continuing.
DATED this__________day of_________________, 199__.
Yours very truly,
CHRYSLER CANADA LTD.
By:
------------------
<PAGE>
3.01 - 25
-----------------
[Title]
By: -----------------
[Title]
<PAGE>
2.08 - 26
SCHEDULE 2.08
SECURITY AGREEMENT
THIS AGREEMENT is made as of the 1st day of August, 1996
between CHRYSLER CANADA LTD. (the "Debtor") of 2450 Chrysler Centre, Windsor,
Ontario N8W 3X7 and CHRYSLER CREDIT CANADA LTD. (the "Secured Party") of 27777
Franklin Road, Southfield, Michigan 48034.
For valuable consideration (the receipt and sufficiency of
which are acknowledged), the Debtor agrees as follows:
1. Definitions
Words and phrases defined in the PPSA and used without initial
capitals in this Security Agreement have the meanings assigned to them in the
PPSA, unless the context otherwise requires. In this Security Agreement:
"Accounts" means all accounts and all debts, claims and demands of any kind
whatever, now or hereafter due, owing or accruing due to the Debtor in respect
of any dealing with Collateral;
"Collateral" means all of the Products, Records and Proceeds, wherever
located, in which the Debtor now or hereafter has an interest, and any item or
part thereof;
"Default" means any of the events set out in Section 13;
"Encumbrance" means any encumbrance of any kind whatever, including, without
limitation, a security interest, mortgage, lien, hypothec, pledge,
hypothecation, charge, trust or deemed trust, whether contractual, statutory
or otherwise arising;
<PAGE>
2.08 - 27
"Loan Agreement" means that certain loan agreement dated as of August 1, 1996
between the Debtor and the Secured Party, as the same may be amended,
supplemented, changed or otherwise varied from time to time;
"Obligations" means the present and future indebtedness, obligations and
liabilities of any kind whatever of the Debtor to the Secured Party pursuant
to the Loan Agreement;
"Products" means any Chrysler Vehicles and Related Leases (as such terms are
defined in the Loan Agreement;
"PPSA" means the Personal Property Security Act of the Province of Ontario, as
it may be amended, and any restated or successor legislation of comparable
effect;
"Prime Rate" on any day means the rate of interest expressed as a rate per
annum which the Royal Bank of Canada has established at its head office in
Toronto, Ontario as a reference rate of interest that it will charge on that
day for loans in Canadian dollars to Canadian corporate customers and which it
refers to as its prime rate;
"Proceeds" means all Accounts, chattel paper, documents of title, securities,
instruments, intangibles, fixtures, proceeds and personal property in any form
derived directly or indirectly from any dealing with any item or part of the
Products or any other item of Collateral, or that indemnifies or compensates
for such property destroyed or damaged, and proceeds of Proceeds whether or
not of the same type, class or kind as the original Proceeds, and any item or
part thereof;
"Records" means all books, accounts, invoices, letters, papers, security
certificates, documents and other records in any form evidencing or relating
in any way to any item or part of the Products or Proceeds and all contracts,
securities, instruments and other rights and benefits in respect thereof, and
any item or part thereof; and
"Security Interests" means any and all Encumbrances granted by the Debtor to
the Secured Party in this Security Agreement.
<PAGE>
2.08 - 28
2. Security Interest
As continuing security for the due payment and performance of
all Obligations, the Debtor grants to the Secured Party fixed and specific
charges, mortgages, hypothecations, pledges and assignments on and of the
Collateral. The Secured Party retains title in each of the Products until the
Debtor has paid for that Product in full.
3. Further Assurances
The Debtor agrees to execute or have executed any further
documents and agreements, and to do or have done whatever else is required, to
give effect to this Security Agreement.
4. Notice of Change of Address, etc.
The Debtor shall notify the Secured Party in writing at least
21 days prior to any change of name of the Debtor or any change in the
location of any Collateral.
5. Costs
The Debtor shall reimburse the Secured Party on demand for all
interest, commissions, costs of realization and other costs and expenses
(including legal fees and expenses on a solicitor and his own client scale)
incurred by the Secured Party in connection with the enforcement of this
Security Agreement, including, without limitation, those arising in connection
with the realization, disposition of, retention, protection or collection of
any Collateral and the protection or enforcement of the rights, remedies and
powers of the Secured Party.
6. Sale of Inventory
Prior to any Default, the Debtor may in the ordinary course of
its business, and on customary trade terms, sell, consign or lease Products
which are items of inventory sold or leased in the ordinary course of the
Debtor's business, but all rights of the Debtor as vendor, consignor or lessor
and all resulting Accounts shall be subject to the Security
<PAGE>
2.08 - 29
Interests. Upon such sale, the Secured Party's title to and Encumbrance on the
Products sold shall vest in the Debtor. The Debtor shall not otherwise sell,
consign, lease, move, destroy or otherwise dispose of, impair or abandon any
Collateral.
7. Default
Whenever any Event of Default (as defined in the Loan
Agreement) has occurred and is continuing, the Secured Party may, at its
option, declare the Security Interests immediately enforceable. The Secured
Party may waive any Event of Default or any breach by the Debtor of any of the
provisions of this Security Agreement. No waiver, however, shall be deemed to
extend to any subsequent breach or Event of Default. Any such waiver must be
in writing and signed by the Secured Party to be effective.
8. Remedies on Default
If the Security Interests become enforceable, the Secured Party
shall have the following rights, remedies and powers, each exerciseable
without notice or demand to the Debtor:
(a) to enter upon any premises where any Collateral is located
and take possession of, disable or remove any Collateral.
The Debtor shall forthwith upon demand deliver to the
Secured Party possession of any Collateral at the place
specified by the Secured Party.
(b) to sell, consign, lease or otherwise dispose of any
Collateral by public auction, private tender or private
contract with or without notice, advertising or any other
formality, all of which are hereby waived by the Debtor,
and to establish at its discretion the terms of such
disposition, including, without limitation, terms and
conditions as to credit, reserve bid or price. All
payments made pursuant to such dispositions shall be
credited against the Obligations only when the Secured
Party actually receives them. The Secured Party may buy
in, rescind or vary any contract for the disposition of
any Collateral and may dispose of any Collateral again
without being answerable for any loss occasioned thereby.
Any such disposition may take place whether or not the
Secured Party has taken possession of the Collateral.
<PAGE>
2.08 - 30
(c) to pay any liability secured by any actual or threatened
Encumbrance against any Collateral. The Secured Party may
borrow money for the maintenance, preservation or
protection of any Collateral and may grant Encumbrances in
any Collateral in priority to the Security Interests as
security for the money so borrowed. The Debtor will
forthwith upon demand reimburse the Secured Party for all
such payments and borrowings.
(d) to seize, collect, realize, dispose of, enforce, release
to third parties or otherwise deal with any Collateral in
such manner, upon such terms and conditions and at such
time as it deems advisable without notice to the Debtor
(except as otherwise required by any applicable law), and
may charge on its own behalf and pay to others its costs
or expenses (including accounting fees, legal fees and
expenses on a solicitor and his own client scale) incurred
in connection with such actions. The Debtor will forthwith
upon demand reimburse the Secured Party for all such costs
or expenses.
(e) to apply to a court of competent jurisdiction for the
appointment of a receiver, manager or receiver and manager
for the Collateral.
(f) to elect to retain any Collateral in satisfaction of any
of the Obligations. The Secured Party may designate any
part of the Obligations to be satisfied by the retention
of particular Collateral which the Secured Party considers
to have a net realizable value approximating the amount of
the designated part of the Obligations, in which case only
the designated part of the Obligations shall be deemed to
be satisfied by the retention of the particular
Collateral.
9. Limitation of Liability
The Secured Party shall not be liable or accountable for any
failure to seize, collect, realize, dispose of, enforce or otherwise deal with
any Collateral and shall not be bound to institute proceedings for any such
purposes or for the purpose of preserving any rights, remedies and powers of
the Secured Party, the Debtor or any other person in respect of any
Collateral. The Secured Party shall not be liable or responsible for any loss
or damage whatever which may accrue in consequence of any such failure
resulting from any negligence of the Secured Party or its officers, employees,
agents, or any Receiver, or
<PAGE>
2.08 - 31
otherwise. If the Secured Party takes possession of any Collateral, the
Secured Party shall have no liability as a mortgagee in possession or be
accountable for anything except actual receipts.
10. Rights in Addition
The rights, remedies and powers conferred by this Security
Agreement are in addition to, not in substitution for, any other rights,
remedies or powers the Secured Party may have under this Security Agreement,
at law, in equity or by or under the PPSA or any other statute. The Secured
Party may exercise any of its rights, remedies or powers separately or in
combination and at any time.
11. Application of Payments
The Secured Party may appropriate any payments from the Debtor
to the Obligations as the Secured Party sees fit, notwithstanding any
appropriation by the Debtor, and may change any appropriation at any time.
12. Notices
Any notice required or permitted hereunder shall be in writing
and may be delivered or sent by any electronic means of sending messages,
including facsimile transmission, which produces a permanent written record.
Delivered notices shall be effective upon delivery during business hours to an
apparently responsible employee of the Debtor or Secured Party, as the case
may be; notices sent by electronic transmission shall be deemed to have been
received on the next day at the opening of business. Notices shall be
addressed to the Debtor or the Secured Party at its address first set out
above. Addresses for notice may be changed by giving notice in accordance with
this Section.
13. Governing Law
This Security Agreement shall be governed by, and interpreted
and enforced in accordance with, the laws in force in the Province of Ontario.
The Debtor irrevocably submits to the non-exclusive jurisdiction of the courts
of Ontario with respect to any matter
<PAGE>
2.08 - 32
related hereto.
14. Interpretation
There are no representations, warranties, covenants or
acknowledgements affecting this Security Agreement or any Collateral, other
than as expressed herein in writing. The Debtor acknowledges that the
provisions of this Security Agreement are commercially reasonable and not
manifestly unreasonable. No agreement purporting to amend, supplement or
otherwise vary this Security Agreement shall be binding upon either the Debtor
or the Secured Party unless that agreement is in writing and signed by the
Debtor and the Secured Party.
15. Invalidity
If any provision of this Security Agreement is found to be
invalid or unenforceable, that provision shall be deemed to be severed
herefrom and the remaining provisions of this Security Agreement shall not be
affected thereby but shall remain valid and enforceable.
16. Binding Effect
This Security Agreement shall enure to the benefit of the
Secured Party and its successors and assigns and shall bind the Debtors and
its successors.
17. Receipt of Copy
The Debtor acknowledges receipt of an executed copy of this
Security Agreement. At any time the Secured Party may provide to any person
copies of this Security Agreement or information about it or about the
Obligations.
IN WITNESS WHEREOF this Security Agreement has been duly
executed delivered.
<PAGE>
2.08 - 33
CHRYSLER CANADA LTD.
By:
----------------
Exhibit 12-A
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
Year Ended December 31,
-------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C>
Net earnings before cumulative effect of
changes in accounting principles $ 376 $ 339 $ 195 $ 159 $ 180
Add back:
Taxes on income 210 183 120 108 115
Fixed charges 813 927 772 810 1,045
------ ------ ------ ------ ------
Earnings available for fixed charges $1,399 $1,449 $1,087 $1,077 $1,340
====== ====== ====== ====== ======
Fixed charges:
Interest expense $ 797 $ 910 $ 754 $ 791 $1,022
Rent 16 17 18 19 23
------ ------ ------ ------ ------
Total fixed charges $ 813 $ 927 $ 772 $ 810 $1,045
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 1.72 1.56 1.41 1.33 1.28
====== ====== ====== ====== ======
<FN>
The ratio of earnings to fixed charges have been computed by dividing earnings
before income taxes and fixed charges by fixed charges. Fixed charges consist
of interest, amortization of debt discount and expense, and rentals. Rentals
included in fixed charges are the portion of total rent expense representative
of the interest factor (deemed to be one-third).
</TABLE>
Exhibit 12-B
<TABLE>
<CAPTION>
Chrysler Corporation and Consolidated Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
Year Ended December 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net earnings before extraordinary
item and cumulative effect of
changes in accounting principles $3,720 $2,121 $3,713 $2,415 $ 505
Add back:
Taxes on income 2,372 1,328 2,117 1,423 429
Fixed charges 1,339 1,359 1,267 1,433 1,732
Amorization of previously capitalized
interest 111 103 87 94 87
Deduct:
Capitalized interest 156 204 177 176 176
Undistributed earnings from less
than fifty percent owned affiliates 14 18 15 2 7
------ ------ ------ ------ ------
Earnings available for fixed charges $7,372 $4,689 $6,992 $5,187 $2,570
------ ------ ------ ------ ------
Fixed charges:
Interest expense $1,007 $ 995 $ 937 $1,104 $1,405
Capitalized interest 156 204 177 176 176
Credit line commitment fees 15 10 10 10 10
Interest portion of rent expense 161 150 143 143 139
Gross-up of preferred stock dividends
of majority-owned subsidiaries (CFC)
to a pre-tax basis -- -- -- -- 2
------ ------ ------ ------ ------
Total fixed charges $1,339 $1,359 $1,267 $1,433 $1,732
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 5.51 3.45 5.52 3.62 1.48
====== ====== ====== ====== ======
Preferred stock dividend requirements 5 33 125 127 128
====== ====== ====== ====== ======
Ratio of earnings to fixed charges and
preferred stock dividend requirements 5.49 3.37 5.02 3.33 1.38
====== ====== ====== ====== ======
Equity taken up in earnings of less than
fifty-percent owned affiliates $ 14 $ 18 $ 15 $ 2 $ 11
-- -- -- -- 4
Deduct - Dividends paid by affiliates ------ ------- ------ ------ ------
Undistributed earnings from less than
fifty-percent owned affiliates $ 14 $ 18 $ 15 $ 2 $ 7
====== ====== ====== ====== ======
<FN>
The ratio of earnings to fixed charges is computed by dividing Earnings
available for fixed charges by Total fixed charges. The ratio of earnings to
fixed charges and preferred stock dividend requirements is computed by
dividing Earnings for fixed charges by the sum of Total fixed charges and
Preferred stock dividend requirements.
</TABLE>
Exhibit 23
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
__________ __________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-64179, 33-55787 and 33-55789 of Chrysler Financial Corporation (a
subsidiary of Chrysler Corporation) on Form S-3 of our report dated January
21, 1997 appearing in this Annual Report on Form 10-K of Chrysler Financial
Corporation for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
January 21, 1997
_____________________
Deloitte & Touche LLP
Tohmatsu
International
_____________
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors of Chrysler Financial Corporation hereby severally constitutes and
appoints D. M. Cantwell, T. L. Hackman, Byron C. Babbish and T. F. Gilman, or
any one or more of them, to be his agents, proxies and attorneys-in-fact, to
sign and execute in his name, place and stead and on his behalf, and to file
with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended, the Form 10-K Annual Report of Chrysler
Financial Corporation for the fiscal year ended December 31, 1996, and any and
all amendments to such Annual Report that may be necessary or desirable,
hereby approving, ratifying and confirming all that the aforesaid agents,
proxies and attorneys-in-fact do, or that any one of them does, on his behalf
pursuant to this Power.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of this 31st day of December, 1996.
\s\ T. P. Capo \s\ D. L. Davis
- ------------------- ---------------
T. P. Capo D. L. Davis
\s\ R. J. Eaton \s\ R. A. Lutz
- ------------------- --------------
R. J. Eaton R. A. Lutz
\s\ W. J. O'Brien III \s\ T. W. Sidlik
- ------------------------- ----------------
W. J. O'Brien III T. W. Sidlik
\s\ G. C. Valade
----------------
G. C. Valade
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> CHRYSLER FINANCIAL CORPORATION AND SUBSIDIARIES
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
FINANCIAL DATA SCHEDULE PURSUANT TO ARTICLE 5
OF REGULATION S-X
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> $ 230
<SECURITIES> 472
<RECEIVABLES> 14,311
<ALLOWANCES> 191
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,281
<DEPRECIATION> 312
<TOTAL-ASSETS> 17,533
<CURRENT-LIABILITIES> 0
<BONDS> 11,245
0
0
<COMMON> 25
<OTHER-SE> 3,288
<TOTAL-LIABILITY-AND-EQUITY> 17,533
<SALES> 0
<TOTAL-REVENUES> 2,481
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 711
<LOSS-PROVISION> 387
<INTEREST-EXPENSE> 797
<INCOME-PRETAX> 586
<INCOME-TAX> 210
<INCOME-CONTINUING> 376
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 376
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
