CONFORMED
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 OF 1934.
For the fiscal year ended December 31, 1997
-----------------------
_____ 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
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(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 (248) 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 ISSUERS 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 ISSUERS
The registrant had 250,000 shares of common stock outstanding as of December
31, 1997.
The registrant meets the conditions set forth in General Instruction I(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>
Chrysler Financial Corporation and Subsidiaries
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, 1997, the Company had approximately 3,200 employees.
The Company's portfolio of finance receivables managed includes receivables
owned and receivables serviced for others. Receivables serviced for others
include securitized automotive receivables and retail leases. At December 31,
1997, receivables serviced for others accounted for 72% of the Company's
portfolio of finance receivables managed. Total finance receivables managed
at the end of each of the five most recent years were as follows (in millions
of dollars):
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Automotive $36,655 $36,858 $35,696 $29,962 $25,011
Nonautomotive 2,715 2,204 2,391 2,775 3,251
------- ------- ------- ------- -------
Total financing $39,370 $39,062 $38,087 $32,737 $28,262
======= ======= ======= ======= =======
</TABLE>
Due to the significant 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. The automotive financing operations of Chrysler
Financial are conducted through 29 zone offices in the United States and
Canada. The Company also provides automotive financial products and services
in Europe and Asia.
During 1997, the Company financed or leased approximately 870,000 vehicles at
retail in the United States, including approximately 611,000 new Chrysler
cars and trucks, representing 27 percent of Chrysler's U.S. retail and fleet
deliveries. During 1997, the Company financed or leased approximately 114,000
vehicles at retail in Canada, including approximately 102,000 new Chrysler
cars and trucks, representing 40 percent of Chrysler's Canadian retail and
fleet deliveries. In 1997, the average monthly payment for new vehicle retail
installment sales contracts acquired in the United States was $376. The
average new contract balance was $20,801 and the average original term was 55
months.
4
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 1. BUSINESS - continued
- ------- --------------------
Automotive Financing (continued)
During 1997, the Company financed approximately 2,603,000 vehicles at
wholesale in the United States, including approximately 1,625,000 new
Chrysler cars and trucks representing 70 percent of Chrysler's vehicle
shipments. During 1997, the Company financed approximately 202,000 vehicles
at wholesale in Canada, including approximately 175,000 new Chrysler cars and
trucks representing 66 percent of Chrysler's vehicle shipments.
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,
is engaged in the ownership, development and management of Chrysler
automotive dealership properties in the United States. Chrysler Realty
typically purchases, leases or options dealership facilities and then leases
or subleases these facilities to Chrysler dealers. At December 31, 1997,
Chrysler Realty controlled 776 sites (of which 225 were owned by Chrysler
Realty).
Nonautomotive Financing
The Company conducts its nonautomotive finance business through its
subsidiary, Chrysler Capital Corporation. At December 31, 1997, the
nonautomotive receivables managed throughout the United States consisted
primarily of $2.6 billion of leveraged leases.
Funding
Receivable sales are a significant source of funding for the Company. Net
proceeds from the sales of automotive retail receivables were $9.0 billion
during 1997 compared to $8.1 billion in 1996. Securitization of revolving
wholesale account balances provided funding which aggregated $6.1 billion and
$6.8 billion at December 31, 1997 and 1996, respectively. During 1997, the
Company issued $4.0 billion of term debt (primarily medium term notes) and
repaid $3.1 billion of term debt.
The Company has revolving credit facilities, which total $8.0 billion,
consisting of a $2.0 billion facility expiring in April 1998 and a $6.0
billion facility expiring in April 2002. These facilities include $1.0
billion allocated to Chrysler Credit Canada Ltd. As of December 31, 1997, no
amounts were outstanding under these facilities.
5
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 1. BUSINESS - continued
- ------- --------------------
Funding (continued)
The Company's outstanding debt at the end of each of the five most recent
years was as follows (in millions of dollars):
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
Short-term notes
(primarily commercial paper) $ 2,970 $ 2,616 $ 2,435 $ 4,315 $ 2,772
Bank borrowings - International 217 90 -- -- --
Senior term debt 9,324 8,435 9,234 6,069 5,139
Subordinated term debt -- -- -- 27 77
Other borrowings 207 104 100 260 447
------- ------- ------- ------- -------
Total $12,718 $11,245 $11,769 $10,671 $ 8,435
======= ======= ======= ======= =======
</TABLE>
Derivative Financial Instruments
A discussion of the Company's market risks and how the Company manages those
risks is included in Item 7A, Quantitative and Qualitative Disclosures about
Market Risk.
ITEM 2. PROPERTIES
- ------- ----------
At December 31, 1997, 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 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, 1997, a total of 225 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
- ------- -----------------
Various legal actions are pending against the Company, some of which seek
damages in large or unspecified amounts and other relief. Although such legal
actions are subject to many uncertainties and the outcome of individual
actions is not predictable with assurance, the Company believes these actions
constitute routine litigation encountered in the normal course of business.
Although the ultimate amount of liability with respect to such actions cannot
be determined at December 31, 1997, the Company has reserves which it
believes will be sufficient to cover these actions. After giving effect to
these reserves, management believes the ultimate resolution of these actions
will not have a material effect on the Company's financial position.
6
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
(Omitted in accordance with General Instruction I.)
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>
1997 1996 1995 1994 1993
-------- --------- --------- ------- --------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Finance revenue
and other revenues $ 2,654 $ 2,481 $ 2,439 $ 1,995 $ 2,039
Earnings before cumulative
effect of changes in
accounting principles $ 419 $ 376 $ 339 $ 195 $ 159
Cumulative effect of changes
in accounting principle $ -- $ -- $ -- $ -- $ (30)
Net earnings $ 419 $ 376 $ 339 $ 195 $ 129
Total assets $ 19,321 $ 17,533 $ 17,835 $ 16,648 $ 14,251
Total debt $ 12,718 $ 11,245 $ 11,769 $ 10,671 $ 8,435
Cash dividends on
Common stock $ 415 $ 382 $ 335 $ 40 $ --
</TABLE>
7
<PAGE>
Chrysler Financial Corporation and Subsidiaries
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 $419 million in 1997 compared to
$376 million and $339 million in 1996 and 1995, respectively. The increase in
net earnings for 1997 compared to 1996 primarily reflects an increase in
gains and servicing fees from sales of receivables, higher levels of vehicles
leased, and lower operating expenses, partially offset by higher credit loss
provisions. The increase in net earnings for 1996 compared to 1995 primarily
reflects net margin improvements partially offset by an increase in credit
loss provisions.
Automotive volume totaled $81.7 billion in 1997, compared with $77.2 billion
and $81.9 billion in 1996 and 1995, respectively. The increase in automotive
volume in 1997 compared to 1996 reflects higher retail and lease penetration
due to new marketing programs to customers and dealers initiated during 1997.
The decrease in automotive volume from 1995 to 1996 was primarily due to
increased competition and actions taken by the Company to improve retail
credit mix. United States penetration and the number of vehicles financed
over the last three years were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
United States Penetration:
Retail and lease 27% 20% 27%
Wholesale 70% 72% 74%
Number of New Chrysler Vehicles
Financed in the United States
(in thousands):
Retail and lease 611 485 594
Wholesale 1,625 1,771 1,632
</TABLE>
Net margin totaled $663 million in 1997 compared to $774 million in 1996 and
$665 million in 1995. Finance revenue totaled $1,648 million in 1997, $1,663
million in 1996 and $1,621 million in 1995. Earnings from sold wholesale
receivables was reflected in Finance revenue prior to 1997. Effective January
1, 1997, gains from sales of wholesale receivables are reported in Investment
and other income, in accordance with the Statement of Financial Accounting
Standards ("SFAS") No. 125. The increase in net margin from 1995 to 1996
primarily reflects lower average effective cost of borrowings.
A comparison of the borrowing costs is shown in the following table (dollars
in millions):
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Interest expense $ 816 $ 797 $ 910
Average borrowings $12,415 $11,590 $11,463
Average effective costs of borrowings:
Consolidated 6.5% 6.9% 7.9%
U.S. and Canada 6.6% 6.9% 7.4%
</TABLE>
8
<PAGE>
Chrysler Financial Corporation and Subsidiaries
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 years ended
December 31, 1997 and 1996, compared to the year ended December 31, 1995
primarily reflects lower market interest rates in the United States and
Canada.
Depreciation on vehicles leased for the year ended December 31, 1997 was $169
million compared to $92 million in 1996 and $46 million in 1995. The increase
in depreciation expense was due to higher levels of vehicles leased in Canada
and United States.
Service fee income was $322 million for the year ended December 31, 1997,
compared to $299 million and $271 million for the years ended December 31,
1996 and 1995, 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 increased to $567 million in 1997, compared to
$391 million in 1996 and $407 million in 1995. The increase in Investment and
other income for 1997 compared to 1996 reflects higher gains on sold
receivables. Investment and other income in 1996 reflects a $9 million loss
and in 1995 reflects a $12 million gain from the sale of certain
nonautomotive assets. 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.
Operating and other expenses totaled $501 million in 1997, compared to $523
million in 1996 and $508 million in 1995. Operating and other expenses for
1996 and 1995 include costs associated with early retirement packages offered
to employees. Early retirement packages were not offered in 1997.
Provision for credit losses for 1997 totaled $443 million compared to $387
million and $342 million in 1996 and 1995, respectively. The increase in
Provision for credit losses for both 1997 and 1996 compared to 1995 reflects
higher loss experience from retail automotive receivables.
Net credit loss experience, including net losses on receivables sold subject
to limited credit risk, for the years ended December 31, 1997, 1996 and 1995
was as follows (dollars in millions):
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1996 1995
-------- ---------- ----------
<S> <C> <C> <C>
Net Credit Losses - Finance Receivables:
Automotive $ 393 $ 358 $ 229
Nonautomotive 14 35 23
--------- ---------- ----------
Total $ 407 $ 393 $ 252
========= ========== ==========
Net Credit Losses - Finance Receivables to
Average Gross Finance Receivables Outstanding:
Automotive 1.13% 1.06% 0.70%
Nonautomotive 0.38% 1.06% 0.69%
Total 1.06% 1.06% 0.70%
</TABLE>
9
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS- continued
--------------------------------------------------------
Financial Review (continued)
During 1997, the Company experienced high credit losses on automotive retail
receivables. Company management attributes the credit losses to the combined
effect of the credit mix of retail receivable originations and the increase
in frequency of default and repossession necessitating an increase in the
level of servicing and collection by the Company. While credit loss
experience may continue, actions have been taken to improve credit mix,
collections and servicing of the retail receivable portfolio. However, no
assurance can be given as to future results.
The Company's allowance for credit losses totaled $559 million, $526 million
and $578 million at December 31, 1997, 1996 and 1995, respectively. The
allowance for credit losses as a percentage of related finance receivables
outstanding was 1.60 percent at December 31, 1997, 1.52 percent at December
31, 1996 and 1.69 at December 31, 1995. The increase in allowance for credit
losses as a percentage of related finance receivables outstanding is
primarily attributable to higher credit loss provisions during 1997.
The Company's portfolio of receivables and leases managed, which includes
receivables owned and receivables serviced for others, totaled $39.4 billion
at December 31, 1997, $39.1 billion at December 31, 1996 and $38.1 billion at
December 31, 1995. The increase in receivables and leases managed over the
last two years, reflects higher automotive volume. Receivables serviced for
others totaled $29.1 billion, $28.0 billion, and $25.3 billion at December
31, 1997, 1996 and 1995, respectively.
Total assets at December 31, 1997, were $19.3 billion, compared to $17.5
billion and $17.8 billion at December 31, 1996 and 1995, respectively. The
increase in total assets is primarily attributable to the higher balance of
vehicles leased and an increase in loans and other amounts due from
affiliated companies.
Total debt outstanding was $12.7 billion, $11.2 billion, and $11.8 billion at
December 31, 1997, 1996 and 1995, respectively. The increase in total debt is
attributable to the need to fund higher automotive volume. The Company's
debt-to-equity ratio was 3.9 to 1 at December 31, 1997, compared to 3.4 to 1
at December 31, 1996 and 3.6 to 1 at December 31, 1995.
Liquidity and Capital Resources
Term debt, commercial paper and receivable sales represent the Company's
primary funding sources. During 1997, the Company issued $4.0 billion of term
debt (primarily medium term notes), repaid $3.1 billion of term debt and
increased its commercial paper by $0.4 billion.
Receivable sales continued to be a significant source of funding during 1997
as the Company realized $9.0 billion of net proceeds from the sale of
automotive retail receivables, compared to $8.1 billion of net proceeds in
1996. Securitization of revolving wholesale account balances provided funding
which aggregated $6.1 billion and $6.8 billion at December 31, 1997 and 1996,
respectively.
At December 31, 1997, the Company had contractual debt maturities of $6.0
billion in 1998 (including $3.0 billion of short-term notes with an average
remaining term of 53 days), $3.3 billion in 1999, $2.3 billion in 2000, $0.4
billion in 2001, $0.5 billion in 2002 and $0.2 billion thereafter. The
Company expects that 1998 debt maturities will be funded from continued
access to term debt markets, issuances of commercial paper, receivable sales
(including approximately $1.5 billion in eligible wholesale receivables held
by securitization trusts) and operating cash flows.
10
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS- continued
--------------------------------------------------------
Liquidity and Capital Resources (continued)
The Company has revolving credit facilities, which total $8.0 billion,
consisting of a $2.0 billion facility expiring in April 1998 and a $6.0
billion facility expiring in April 2002. These facilities include $1.0
billion allocated to Chrysler Credit Canada Ltd. As of December 31, 1997, no
amounts were outstanding under these facilities.
The Company paid dividends to Chrysler Corporation totaling $415 million,
$382 million and $335 million for the years ended December 31, 1997, 1996 and
1995, respectively.
The Company believes that cash provided by operations, receivable sales,
access to term debt markets and issuance of commercial paper will provide
sufficient liquidity to meet its funding requirements.
Year 2000 Date Conversion
In 1996, the Company began the process of identifying, evaluating and
implementing changes to computer programs necessary to address the year 2000
issue. This issue affects computer systems that have time-sensitive programs
that may not properly recognize the year 2000. This could result in major
system failures or miscalculations. The Company is currently addressing its
internal year 2000 issue with modifications to existing programs and
conversions to new programs. The Company is also communicating with dealers,
financial institutions, software vendors and others with which it conducts
business to help them identify and resolve the year 2000 issue. If necessary
modifications and conversions are not completed in a timely manner, the year
2000 issue may have a material effect on the operations of the Company. The
total cost associated with the required modifications and conversions is not
known at this time, however, it is not expected to be material to the
Company's financial position and is being expensed as incurred.
New Accounting Standards
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income," effective for fiscal years
beginning after December 15, 1997. This statement establishes standards for
reporting and display of comprehensive income and its components in a full
set of general-purpose financial statements. This statement requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. Based on
current accounting standards, this new accounting statement is not expected
to have a material impact on the Company's consolidated financial statements.
The Company will adopt this accounting standard effective January 1, 1998, as
required.
In September 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information," effective for financial statements
for periods beginning after December 15, 1997. This statement establishes
standards for reporting information about operating segments in annual
financial statements and requires that enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. The Company has
not determined the impact that the adoption of this new accounting standard
will have on its consolidated financial statement disclosures. The Company
will adopt this accounting standard effective January 1, 1998, as required.
11
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------- ----------------------------------------------------------
Derivative Financial Instruments
The Company is exposed to market risks, including fluctuations in interest
rates, variability in spread relationships (Prime to LIBOR spreads),
mismatches of repricing intervals between finance receivables and related
funding obligations, and variability in currency exchange rates. The Company
has established policies, procedures, and internal processes governing its
management of market risks and the use of financial instruments to manage its
exposure to such risks. Sensitivity of earnings to these risks are managed by
entering into securitization transactions, issuing debt obligations with
appropriate price and term characteristics, and utilizing derivative
financial instruments. These derivative financial instruments consist
primarily of interest rate swaps. The Company does not use derivative
financial instruments for trading purposes.
The Company uses several techniques, including market value, static gap
analysis and value at risk, to assess the market risk of its derivative
financial instruments. The Company has included all financial assets and
liabilities, including those owned and securitized, in its value at risk
model. Value at risk measures potential losses of a portfolio from adverse
changes in market factors for a specified time period and confidence level.
The Company uses a historical simulation model in its calculation of value at
risk. The model uses a 95 percent confidence level and a three-month time
horizon ending December 31, 1997 to measure the potential loss in fair value
that could arise from changes in market conditions. The model also takes into
account actual observed correlations and diversification across market
factors, including interest rates and currencies.
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. The Company's interest rate swap portfolio is an
integral element of its risk management policy, and as such, all swaps are
linked to an underlying debt or securitization obligation.
Based on the Company's overall interest rate exposure at December 31, 1997,
fluctuations in interest rates in the near term would not materially affect
the Company's consolidated operating results, financial position or cash
flows.
Exposure to variability in foreign exchange rates is mitigated through the
use of natural hedges, whereby the lending and funding requirements are both
managed in the home currency of such countries. In the past, the Company
entered into currency exchange agreements to manage its exposure arising from
fluctuating exchange rates related to specific funding transactions. As of
December 31, 1997, there were no outstanding currency exchange agreements.
Based on the Company's overall currency rate exposure at December 31, 1997,
movements in currency rates would not materially affect the financial
position of the Company.
12
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Net Earnings
(in millions of dollars)
Year Ended December 31,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Finance Revenue (Notes 1 and 11):
Automotive:
Retail (Note 3) $ 728 $ 710 $ 718
Wholesale and other (Note 3) 455 579 643
Vehicles leased - rents and fees (Notes 5 and 9) 346 242 104
Nonautomotive 119 132 156
----- ----- -----
Total finance revenue 1,648 1,663 1,621
Interest expense (Note 6) 816 797 910
Depreciation on vehicles leased (Note 1) 169 92 46
----- ----- -----
Net margin 663 774 665
Other Revenues:
Servicing fee income (Note 1) 322 299 271
Insurance premiums earned (Note 7) 117 128 140
Investment and other income (Note 3) 567 391 407
----- ----- -----
Net margin and other revenues 1,669 1,592 1,483
----- ----- -----
Costs and Expenses:
Operating and other expenses 501 523 508
Provision for credit losses (Notes 1 and 2) 443 387 342
Insurance losses and loss adjustment expenses (Notes 1 and 7) 88 96 111
----- ----- -----
Total costs and expenses 1,032 1,006 961
----- ----- -----
Earnings before income taxes 637 586 522
Provision for income taxes (Note 8) 218 210 183
----- ----- -----
Net Earnings $ 419 $ 376 $ 339
====== ====== =====
<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 Balance Sheet
(in millions of dollars)
December 31,
----------------
1997 1996
------- -------
<S> <C> <C>
Assets (Note 1):
Finance receivables - net (Note 2) ....................... $10,926 $11,158
Retained interests in sold receivables - net
(Notes 2 and 3) ........................................ 3,111 3,153
------- -------
Total finance receivables and retained interests -
net .................................................. 14,037 14,311
Cash and cash equivalents (Note 4) ....................... 380 230
Marketable securities (Note 4) ........................... 408 472
Vehicles leased - net (Note 5) ........................... 1,736 614
Dealership properties leased - net (Note 5) .............. 281 319
Repossessed collateral ................................... 76 146
Loans and other amounts due from affiliated companies
(Note 11)............................................... 1,705 859
Other assets ............................................. 698 582
------- -------
Total Assets ............................................. $19,321 $17,533
======= =======
Liabilities (Note 1):
Debt (Note 6) ............................................ $12,718 $11,245
Accounts payable, accrued expenses and other (Note 7) .... 1,474 1,372
Deferred income taxes (Note 8) ........................... 1,832 1,628
------- -------
Total Liabilities ...................................... 16,024 14,245
------- -------
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 ....................................... 2,104 2,095
------- -------
Total Shareholder's Investment ........................ 3,297 3,288
------- -------
Total Liabilities and Shareholder's Investment ........... $19,321 $17,533
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(in millions of dollars)
Year Ended December 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net earnings ............................................. $ 419 $ 376 $ 339
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Gains from receivable sales net of amortization
(Note 3) .............................................. (64) (21) (10)
Net loss (gain) from sales of nonautomotive assets ..... -- 9 (12)
Provision for credit losses ............................ 443 387 342
Depreciation and amortization .......................... 191 118 88
Change in deferred income taxes and income taxes payable 201 136 (62)
Change in amounts due to/from affiliated companies ..... 39 143 136
Change in accounts payable, accrued expenses and other . 193 (65) 58
-------- -------- --------
Net cash provided by operating activities ................ 1,422 1,083 879
-------- -------- --------
Cash Flows From Investing Activities:
Acquisitions of finance receivables ...................... (75,679) (73,170) (75,472)
Collections of finance receivables ....................... 26,118 21,784 29,105
Sales of finance receivables ............................. 49,167 50,743 44,912
Purchases of marketable securities (Note 4) .............. (1,918) (1,910) (2,189)
Sales and maturities of marketable securities ............ 1,988 3,096 2,386
Change in loans to affiliated companies (Note 11) ........ (885) (864) --
Purchases of vehicles leased ............................. (1,446) (366) (321)
Sales of vehicles leased ................................. 116 59 16
Sales of nonautomotive assets ............................ -- 225 94
Change in cash and investments held by securitization
trust .................................................. 145 (86) 100
Other .................................................... 64 32 29
-------- -------- --------
Net cash used in investing activities .................... (2,330) (457) (1,340)
-------- -------- --------
Cash Flows From Financing Activities:
Change in short-term notes ............................... 354 181 (1,880)
Issuance of term debt .................................... 3,965 1,163 4,281
Repayment of term debt ................................... (3,076) (1,962) (1,143)
Change in bank borrowings - International ................ 127 90 --
Payment of dividends ..................................... (415) (382) (335)
Other .................................................... 103 38 (160)
-------- -------- --------
Net cash provided by (used in) financing activities ...... 1,058 (872) 763
-------- -------- --------
Change in cash and cash equivalents ....................... 150 (246) 302
Cash and cash equivalents at beginning of year ............ 230 476 174
-------- -------- --------
Cash and Cash Equivalents at End of Year .................. $ 380 $ 230 $ 476
======== ======== ========
</TABLE>
The Company acquired $1.0 billion and $250 million of marketable securities
in non-cash transactions relating to the securitization of retail receivables
in 1996 and 1995, respectively.
See Notes to Consolidated Financial Statements.
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
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. The Company also provides
automotive financial products and services in Europe and Asia. 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 credit risk. The Company
generally sells its receivables to a trust and remains as servicer for which
it is paid a servicing fee. 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 of the sold receivables, and certain cash deposits provided as
credit enhancements for investors.
Gains or losses from the sales of finance receivables are recognized in the
period in which such sales occur. In determining the gain or loss for each
qualifying sale of finance 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."
Effective January 1, 1997, the Company adopted the SFAS No. 125, which
requires retail and wholesale receivable sales occuring after December 31,
1996 to be accounted for as sales when legal and effective control over
transferred receivables is surrendered.
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.
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)
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. Leased vehicle revenue is recognized and
depreciation is provided on a straight-line basis over the lease term.
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 periodically
reviewed to determine that recorded amounts are not impaired.
Allowance for Credit Losses
An allowance for credit losses is generally established during the period in
which retail 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 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.
Cash Equivalents
Temporary investments 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.
17
<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)
Derivative Financial Instruments (Note 13)
The Company uses derivative financial instruments to manage funding costs and
exposures arising from fluctuations in interest rates, variability in spread
relationships (Prime to LIBOR spreads), mismatches of repricing intervals
between finance receivables and related funding obligations, and variability
in currency exchange rates. These derivative financial instruments consist
primarily of interest rate swaps. 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 assets and 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.
Note 2 - Finance Receivables and Retained Interests - Net
Outstanding balances of "Finance receivables - net" were as follows (in
millions of dollars):
<TABLE>
<CAPTION>
December 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Automotive:
Retail (Note 11) ........................... $ 3,621 $ 4,710
Wholesale and other (Note 11) .............. 3,252 3,755
Retained senior interests in sold
wholesale receivables (1) ................ 1,511 677
-------- --------
Total automotive .......................... 8,384 9,142
-------- --------
Nonautomotive:
Leveraged leases ........................... 2,572 1,952
Commercial ................................. 143 252
-------- --------
Total nonautomotive ....................... 2,715 2,204
-------- --------
Total finance receivables ................... 11,099 11,346
Allowance for credit losses (2) ............. (173) (188)
-------- --------
Total finance receivables - net ............ $ 10,926 $ 11,158
======== ========
<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>
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)
The Company's retained interests are generally restricted and subject to
credit risk. The following is a summary of amounts included in "Retained
interests in sold receivables - net" (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
------------------
1997 1996
-------- -------
<S> <C> <C>
Cash and investments ..................... $ 361 $ 506
Subordinated interests in receivables .... 2,843 2,543
Residual cash flows* ..................... 284 202
Other .................................... -- 237
Allowance for credit losses .............. (377) (335)
------- -------
Total retained interests in sold
receivables - net ..................... $ 3,111 $ 3,153
======= =======
<FN>
* Residual cash flows approximate fair market value as of December 31, 1997.
</TABLE>
Changes in the allowance for credit losses, including vehicles leased and
receivables sold subject to credit risk, were as follows (in millions of
dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Balance at beginning of year ............. $ 526 $ 578 $ 512
Provision for credit losses .............. 443 387 342
Net credit losses ........................ (409) (393) (252)
Reduction due to sale of
nonautomotive assets ................... -- (40) --
Other adjustments ........................ (1) (6) (24)
----- ----- -----
Balance at end of year ................. $ 559 $ 526 $ 578
===== ===== =====
</TABLE>
Nonearning finance receivables and nonearning receivables sold subject to
credit risk totaled $238 million and $263 million at December 31, 1997 and
1996, respectively, which represents 0.7 percent and 0.8 percent of such
receivables outstanding, respectively.
Maturities of finance receivables at December 31, 1997, are as follows: 1998
- - $5,527 million; 1999 - $935 million; 2000 - $1,149 million; 2001 - $515
million; 2002 - $455 million; thereafter - $2,518 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 and commitments, were as follows (in
millions of dollars):
<TABLE>
<CAPTION>
December 31,
------------------
1997 1996
------- -------
<S> <C> <C>
Rentals receivable (net of principal and
interest on nonrecourse debt) ............ $ 3,207 $ 2,015
Residual values ............................ 905 923
Unearned income ............................ (1,462) (903)
Deferred investment tax credits ............ (78) (83)
------- -------
Net receivables ........................... 2,572 1,952
Deferred income taxes and commitments ...... (1,897) (1,626)
------- -------
Net investment in leveraged leases ........ $ 675 $ 326
======= =======
</TABLE>
19
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 - Sales of Receivables
The Company sells receivables subject to limited credit risk. Outstanding
balances of sold finance receivables, excluding retained senior interests in
sold wholesale receivables, were as follows (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------
1997 1996
------- -------
<S> <C> <C>
Retail ............................ $16,096 $15,048
Wholesale ......................... 7,187 8,014
------- -------
Total ............................ $23,283 $23,062
======= =======
</TABLE>
Gains, net of related amortization, recognized from the sales of receivables
were as follows (in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Retail:
Gross gains on sales ............. $ 204 $ 169 $ 122
Amortization ..................... (168) (148) (112)
----- ----- -----
Net gains ........................ $ 36 $ 21 $ 10
===== ===== =====
Wholesale:
Gross gains on sales ............. $ 170 $-- $--
Amortization ..................... (142) -- --
----- ----- -----
Net gains ........................ $ 28 $-- $--
===== ===== =====
Total:
Gross gains on sales ............. $ 374 $ 169 $ 122
Amortization ..................... (310) (148) (112)
----- ----- -----
Net gains ........................ $ 64 $ 21 $ 10
===== ===== =====
</TABLE>
Gains and losses from the sales of receivables are recognized in the period
in which such sales occur, and are included in "Investment and other income."
Amortization relating to these gains is recognized as an adjustment to
"Finance Revenue" over the life of the sold receivables. Provisions for
expected credit losses are generally provided during the period in which such
receivables are acquired. Since the allowance for credit losses is separately
provided prior to the receivable sales, gains from receivable sales are not
reduced for expected credit losses. The provision for credit losses related
to such sales amounted to $268 million, $244 million and $180 million for the
years ended December 31, 1997, 1996 and 1995, respectively. The Company began
recognizing gains and losses on wholesale receivable sales pursuant to the
implementation of the Statement of Financial Accounting Standards ("SFAS")
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," effective January 1, 1997.
The Company is committed to sell all wholesale receivables related to certain
dealer accounts.
20
<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, 1997,
were as follows (in millions of dollars):
<TABLE>
<CAPTION>
Available-for-sale
Securities
------------------
Fair
Cost Value
---- ----
<S> <C> <C>
Within one year ................................ $ 19 $ 19
After one year through five years .............. 93 95
After five years through ten years ............. 76 77
After ten years ................................ 142 148
---- ----
Total ......................................... $330 $339
==== ====
</TABLE>
The proceeds from sales of available-for-sale securities were $264 million,
$138 million and $129 million for the years ended December 31, 1997, 1996 and
1995, respectively. The related realized gains and losses were immaterial.
The Company's portfolio of securities, which includes investments classified
as marketable securities and cash equivalents was as follows (in millions of
dollars):
<TABLE>
<CAPTION>
December 31, 1997
-------------------------------
Fair Gross Unrealized
Cost Value Gains Losses
---- ----- ----- ---------
<S> <C> <C> <C> <C>
Available-for-sale securities:
Bond - Corporate/Public Utility ............ $194 $200 $ 8 $ 2
State/Municipal ..................... 13 14 1 --
Government securities - United States and
Canada ................................... 110 112 3 1
Short-term notes ........................... 13 13 -- --
---- ---- ---- ----
Total debt securities ................... 330 339 12 3
Common stocks ......................... 45 49 5 1
Preferred stocks ...................... 19 20 1 --
---- ---- ---- ----
Total available-for-sale securities .. 394 408 $ 18 $ 4
==== ====
Cash equivalents ............................ 143 143
---- ----
Total securities ........................ $537 $551
==== ====
</TABLE>
21
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 - Securities (continued)
<TABLE>
<CAPTION>
December 31, 1996
-------------------------------
Fair Gross Unrealized
Cost Value Gains Losses
---- ----- ----- ---------
<S> <C> <C> <C> <C>
Available-for-sale securities:
Bond - 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
==== ====
<FN>
*Money market notes purchased from trusts established in connection with the
Company's securitization of retail receivables.
</TABLE>
The Company had $408 million and $400 million of marketable securities
limited for use in its insurance operations in accordance with various
statutory requirements at December 31, 1997 and 1996, respectively.
Note 5 - Vehicles Leased and Dealership Properties Leased - Net
"Vehicles leased - net" was as follows (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
---------------
1997 1996
----- -----
<S> <C> <C>
Vehicles at cost ..................... $1,995 $ 743
Accumulated depreciation ............. (250) (126)
Allowance for credit losses .......... (9) (3)
------ -----
Vehicles leased - net ............... $1,736 $ 614
====== =====
</TABLE>
Future minimum rentals on vehicles leased at December 31, 1997 are as
follows: 1998 - $333 million; 1999 - $211 million; 2000 - $52 million; and
2001 - $3 million.
"Dealership properties leased - net" was as follows (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
--------------
1997 1996
----- -----
<S> <C> <C>
Dealership properties at cost .......... $ 398 $ 441
Accumulated depreciation ............... (117) (122)
----- -----
Dealership properties leased - net .... $ 281 $ 319
===== =====
</TABLE>
Future minimum rentals on dealership properties leased at December 31, 1997
are as follows: 1998 - $39 million; 1999 - $33 million; 2000 - $23 million;
2001 - $16 million; 2002 - $8 million; and thereafter - $10 million.
22
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 - Debt
Average effective costs of borrowing were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1997 1996
----------------------- -----------------------
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% 6.8% 6.7% 6.1% 6.9% 6.9%
Consolidated operations... 5.4% 6.8% 6.5% 5.6% 7.0% 6.9%
</TABLE>
Debt outstanding at December 31, 1997 and 1996 was as follows (in millions of
dollars):
<TABLE>
<CAPTION>
Weighted Average December 31,
Interest Rates* at -----------------
Maturity December 31, 1997 1997 1996
- -------- ------------------ ------- -------
<S> <C> <C> <C>
Short-term notes placed primarily
in the open market:
United States ..................... $ 2,261 $ 2,008
Canada ............................ 709 608
------- -------
Total short-term notes
(primarily commercial paper) ... 5.5% 2,970 2,616
------- -------
Bank borrowings - International ...... 4.1% 217 90
------- -------
Senior term debt:
United States, due
1997 ............................... -- 2,877
1998 ............................... 6.4% 2,309 2,309
1999 ............................... 7.7% 2,719 1,531
2000 ............................... 6.5% 1,845 788
2001 ............................... 5.9% 401 376
2002 ............................... 5.9% 465 40
Thereafter ......................... 5.7% 159 9
------- -------
Total United States .............. 7,898 7,930
Canada, due 1997-2001 ............... 5.8% 1,426 505
------- -------
Total senior term debt ............ 9,324 8,435
Other borrowings ..................... 8.5% 207 104
------- -------
Total debt .......................... $12,718 $11,245
======= =======
<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, 1997, including $906 million of variable rate
senior term debt.
</TABLE>
Interest paid by the Company for the years ended December 31, 1997, 1996 and
1995 amounted to $791 million, $788 million and $847 million, respectively.
The Company has contractual debt maturities at December 31, 1997, as follows:
1998 - $6.0 billion (including $3.0 billion of short-term notes with an
average remaining term of 53 days); 1999 - $3.3 billion; 2000 - $2.3 billion;
2001 - $0.4 billion; 2002 - $0.5 billion; and thereafter - $0.2 billion.
23
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 - Debt (continued)
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 Company has revolving credit facilities, which total $8.0 billion,
consisting of a $2.0 billion facility expiring in April 1998 and a $6.0
billion facility expiring in April 2002. These facilities include $1.0
billion allocated to Chrysler Credit Canada Ltd. As of December 31, 1997, no
amounts were outstanding under these facilities.
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 $46 million, $49 million and $46 million for the
years ended December 31, 1997, 1996 and 1995, respectively. Amounts reported
as "Insurance losses and loss adjustment expenses" are net of related
reinsurance loss and loss adjustment expenses of $48 million, $28 million and
$26 million for the years ended December 31, 1997, 1996 and 1995,
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 (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
--------------
1997 1996
----- -----
<S> <C> <C>
Direct and assumed unearned premiums .......... $ 50 $ 58
Reinsurance ceded ............................. (5) (6)
----- -----
Net unearned premiums ....................... $ 45 $ 52
===== =====
Direct and assumed reserve for insurance
losses and loss adjustment expenses ........ $ 225 $ 210
Reinsurance ceded ............................. (62) (38)
----- -----
Net reserve for insurance losses and loss
adjustment expenses ....................... $ 163 $ 172
===== =====
</TABLE>
24
<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
(continued)
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 (in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Balance at beginning of year (net of
reinsurance ceded of $38 million,
$33 million and $44 million) .............. $ 172 $ 180 $ 177
Incurred related to:
Current year ............................... 103 109 117
Prior years ................................ (15) (12) (8)
----- ----- -----
Total incurred ............................ 88 97 109
----- ----- -----
Paid related to:
Current year ............................... (44) (49) (51)
Prior years ................................ (53) (56) (55)
----- ----- -----
Total paid ................................ (97) (105) (106)
----- ----- -----
Balance at end of year (net of
reinsurance ceded of $62 million,
$38 million and $33 million) ............... $ 163 $ 172 $ 180
===== ===== =====
</TABLE>
Note 8 - Income Taxes
The provision for income taxes included the following (in millions of
dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Current tax expense (credit):
United States .............................. $ (25) $ 56 $ 218
State and local ............................ 1 (3) 15
Foreign .................................... 13 10 14
----- ----- -----
Total current tax expense (credit) ........ (11) 63 247
----- ----- -----
Deferred tax expense (credit):
United States .............................. 197 111 (71)
State and local ............................ 15 22 3
Foreign .................................... 17 14 4
----- ----- -----
Total deferred tax expense (credit) ....... 229 147 (64)
----- ----- -----
Total provision for income taxes ............ $ 218 $ 210 $ 183
===== ===== =====
</TABLE>
Income taxes in the amount of $11 million were refunded to the Company for
the year ended December 31, 1997. Included in this amount were taxes refunded
by Chrysler under the Tax Sharing Agreement of $20 million. Income taxes paid
by the Company for the years ended December 31, 1996 and 1995 amounted to $4
million and $337 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 in 1995.
25
<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 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 (in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Tax at U.S. statutory rate ............. $ 223 $ 205 $ 183
State and local income taxes ........... 10 12 12
Foreign income taxes ................... 6 5 8
Tax credits ............................ (14) (6) (2)
Purchase accounting adjustments ........ -- -- (6)
Leveraged lease rate adjustments ....... (6) (5) (5)
Other .................................. (1) (1) (7)
----- ----- -----
Total provision for income taxes ...... $ 218 $ 210 $ 183
===== ===== =====
Effective tax rate ..................... 34.2% 35.8% 35.0%
Statutory tax rate ..................... 35.0% 35.0% 35.0%
</TABLE>
The tax-effected temporary differences which comprise deferred tax assets and
liabilities were as follows (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1997 1996
--------------------- ---------------------
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
-------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Nondeductible reserves ...... $ 205 $ -- $ 201 $ --
Leasing activities .......... -- 1,921 -- 1,768
Depreciation ................ -- 9 -- 9
State and local taxes ....... -- 141 -- 127
Postretirement benefits
other than pensions ....... 23 -- 23 --
Foreign currency exchange ... 34 -- 29 --
Servicing transactions ...... 5 -- 40 --
Other ....................... 45 73 59 76
------ ------- ------ -------
Total ...................... $ 312 $ 2,144 $ 352 $ 1,980
====== ======= ====== =======
</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. Although such legal
actions are subject to many uncertainties and the outcome of individual
actions is not predictable with assurance, the Company believes these actions
constitute routine litigation encountered in the normal course of business.
Although the ultimate amount of liability with respect to such actions cannot
be determined at December 31, 1997, the Company has reserves which it
believes will be sufficient to cover these actions. After giving effect to
these reserves, management believes the ultimate resolution of these actions
will not have a material effect on the Company's financial position.
In connection with an agreement with a third party, the Company services a
portfolio of retail leases. The Company is contingently liable for credit
losses and certain residual value enhancements above agreed upon values. The
Company records income as services are provided, and establishes reserves for
its estimated liabilities, as appropriate. Net fees under this agreement are
included in "Vehicles leased - rents and fees." At December 31, 1997, the
Company is contingently liable under this agreement for approximately $57
million.
26
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 9 - Commitments and Contingent Liabilities (continued)
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, 1997 are as follows:
1998 - $45 million; 1999 - $39 million; 2000 - $32 million; 2001 - $27
million; 2002 - $19 million; and thereafter - $71 million. Future minimum
lease commitments have not been reduced by minimum sublease rentals of $116
million due in the future under noncancelable subleases.
Rental expense for operating leases for the years ended December 31, 1997,
1996 and 1995 was $47 million, $47 million and $50 million, respectively.
Sublease rentals of $37 million, $37 million and $40 million were received in
1997, 1996 and 1995, respectively.
At December 31, 1997, the Company had guaranteed obligations of Chrysler in
the amount of $176 million related to international lines of credit.
The Company is contingently liable for interest rate risk under certain
variable rate securitization transactions.
Note 10 - Shareholder's Investment
"Shareholder's Investment" is summarized as follows (in millions of dollars):
<TABLE>
<CAPTION>
Additional Total
Common Paid-In Retained Shareholder's
Stock Capital Earnings Investment
------ --------- -------- -------------
<S> <C> <C> <C> <C>
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
--- ------ ------ ------
Net earnings .................. -- -- 419 419
Common stock dividends ........ -- -- (415) (415)
Net unrealized holding gains
on securities ................ -- -- 5 5
--- ------ ------ ------
Balance - December 31, 1997 .... $25 $1,168 $2,104 $3,297
=== ====== ====== ======
</TABLE>
27
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
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 1997, 1996 or 1995.
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 $15 million in 1997, $1 million in 1996 and paid
approximately $1 million in 1995.
Pursuant to an agreement between Chrysler and Chrysler Realty Corporation,
the Company received fees of $16 million in 1997, $19 million in 1996 and $22
million in 1995. 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. The Company has an agreement with Chrysler for residual
value support on certain retail leasing transactions.
The Company provided secured financing to Chrysler which was repaid during
1997. The outstanding balances under these agreements were $714 million at
December 31, 1996. 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 $0.6 billion and $1.4 billion
at December 31, 1997 and 1996, 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, 1997, $817 million was outstanding compared to $432
million at December 31, 1996.
Chrysler had $932 million and $433 million of short-term borrowings from the
Company at December 31, 1997 and 1996, respectively.
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.
The Company and Chrysler have 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.
Revenues for affiliates accounted for 7%, 5% and 7% of total revenues for
1997, 1996 and 1995, respectively.
28
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
Chrysler Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 - Employee Benefit Plans
Pension plans sponsored by Chrysler, which provide noncontributory and
contributory benefits, 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 during which
employee contributions were made 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 $9 million in 1997, $23 million in 1996
and $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).
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.
Note 13 - Financial Instruments
Derivative Financial Instruments
The Company uses derivative financial instruments with off-balance sheet risk
in the normal course of business to manage funding costs and exposures
arising from fluctuations in interest rates, variability in spread
relationships (Prime to LIBOR spreads), mismatches of repricing intervals
between finance receivables and related funding obligations, and variability
in currency exchange rates. These derivative financial instruments consist
primarily of interest rate swaps. 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. In the past, the Company entered into currency
exchange agreements to manage its exposure arising from fluctuating exchange
rates related to specific funding transactions. Notional amounts are used to
measure the volume of derivative financial instruments and do not represent
settlement exposure.
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. 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 specific funding transaction.
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 off-balance sheet interest rate derivatives and related financial
instruments were as follows (in millions of dollars):
<TABLE>
<CAPTION>
Notional Amounts
Outstanding and
Weighted Average Rates
Variable December 31,
Interest Rate Derivatives Rate Maturing ----------------------
and Related Financial Instruments Indices Through 1997 1996
- --------------------------------- ------------ -------- --------- ---------
<S> <C> <C> <C> <C>
Pay Fixed Interest Rate Swaps
Short-term notes 1998 $ 250 $ 250
Weighted average pay rate 9.08% 9.08%
Weighted average receive rate Money Market 5.73% 5.59%
Term notes 2000 $1,055 $ 369
Weighted average pay rate 5.88% 5.44%
Weighted average receive rate LIBOR 5.89% 4.41%
Receive Fixed Interest Rate Swaps
Term notes 2012 $ 508 $1,436
Weighted average pay rate LIBOR 6.02% 8.07%
Weighted average receive rate 6.97% 9.03%
Variable Interest Rate Swaps
Term notes 2000 $1,616 $1,611
Weighted average pay rate LIBOR 5.83% 5.51%
Weighted average receive rate Fed Funds 5.76% 5.62%
------ ------
Total notional amounts outstanding $3,429 $3,666
====== ======
</TABLE>
The impact of interest rate derivatives on interest expense was not material
in 1997, 1996 and 1995.
Prior to 1997, the Company entered into currency exchange agreements to
manage its exposure arising from fluctuating exchange rates related to
specific funding transactions. The Company hedged against borrowings
denominated in currencies other than the borrowers' local currency. The
borrowings were translated in the financial statements at the rates of
exchange established under the related currency exchange agreement. As of
December 31, 1997, there were no outstanding currency exchange agreements.
The reported amount of such currency borrowings was $75 million at December
31, 1996. 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.
The Company's portfolio of currency derivative financial instruments at
December 31, 1996, included 150 million Deutsche Marks which matured in 1997
with a weighted average interest rate of 6.63%. The contract or notional
amount and the net unrealized gain as of December 31, 1996 were $75 million
and $26 million, respectively.
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.
30
<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 (in millions of dollars):
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1997 1996
----------------- -----------------
Carrying Fair Carrying Fair
Balance Sheet financial instruments: Amount Value Amount Value
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Marketable securities ............... $ 408 $ 408 $ 472 $ 472
Finance receivables - net (1) ....... $ 8,356 $ 8,345 $ 9,172 $ 9,167
Retained interests in sold
receivables - net (2).............. $ 3,111 $ 3,115 $ 3,153 $ 3,120
Debt (3) ............................ $12,718 $12,812 $11,267 $11,410
Currency exchange agreements (4) .... $ -- $ -- $ 22 $ 26
<FN>
(1) The carrying value of finance receivables - net excludes approximately
$2,570 million and $1,986 million of leases classified as "Finance
receivables - net" in the Company's Consolidated Balance Sheet at
December 31, 1997 and 1996, respectively. December 31, 1997 and 1996
data includes approximately $3,929 million and $4,702 million,
respectively, of finance receivables which reprice monthly at current
market rates. The carrying value approximates fair value.
(2) Residual cash flows approximate fair market value as of December 31,
1997.
(3) December 31, 1997 and 1996 data includes approximately $4,781 million
and $3,934 million, respectively, of short-term notes, term debt and
other borrowings which reprice at current market rates.
(4) 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.
Derivative financial instruments with off-balance sheet risk were as follows
(in millions of dollars):
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------
1997 1996
------------------------ ------------------------
Contract or Unrealized Contract or Unrealized
Notional Gains Notional Gains
Amount (Losses) Amount (Losses)
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Aggregate unrealized gain positions:
Interest rate swaps ................... $ 840 $ 9 $1,246 $ 14
Aggregate unrealized loss positions:
Interest rate swaps ................... 2,589 (13) 2,420 (22)
------ --- ------ ----
Total ................................ $3,429 $ (4) $3,666 $ (8)
====== ==== ====== ====
</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.
31
<PAGE>
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, 1997 and 1996, 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.
32
<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
Revenues, earnings and assets of finance and insurance operations were as
follows (in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Finance revenue and other revenues:
Finance operations .................................. $ 2,491 $ 2,315 $ 2,266
Insurance operations ................................ 163 166 173
------- ------- --------
Consolidated finance revenue and other revenues .... $ 2,654 $ 2,481 $ 2,439
======= ======= ========
Earnings before income taxes:
Finance operations .................................. $ 596 $ 549 $ 492
Insurance operations ................................ 41 37 30
------- ------- --------
Consolidated earnings before income taxes .......... $ 637 $ 586 $ 522
======= ======= ========
December 31,
----------------------------
1997 1996 1995
------- ------- --------
Assets:
Finance operations .................................. $18,869 $17,098 $ 17,405
Insurance operations ................................ 452 435 430
------- ------- --------
Consolidated assets ................................ $19,321 $17,533 $ 17,835
======= ======= ========
</TABLE>
Revenues, earnings and assets by geographical area were as follows
(in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Revenues:
United States ....................................... $ 2,321 $ 2,251 $ 2,154
Canada .............................................. 322 230 162
Other ............................................... 11 -- 123*
------- ------- --------
Consolidated revenues .............................. $ 2,654 $ 2,481 $ 2,439
======= ======= ========
Earnings before income taxes:
United States ....................................... $ 569 $ 530 $ 495
Canada .............................................. 67 56 37
Other ............................................... 1 -- (10)*
------- ------- --------
Consolidated earnings before income taxes .......... $ 637 $ 586 $ 522
======= ======= ========
December 31,
----------------------------
1997 1996 1995
------- ------- --------
Assets:
United States ....................................... $16,641 $16,090 $ 16,753
Canada .............................................. 2,532 1,443 837
Other ............................................... 148 -- 245*
------- ------- --------
Consolidated assets ................................ $19,321 $17,533 $ 17,835
======= ======= ========
<FN>
* See Note 11
</TABLE>
33
<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, 1997 and
1996 were as follows (in millions of dollars):
<TABLE>
<CAPTION>
Year Ended December 31, 1997
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total finance revenue ............. $413 $404 $395 $436
Interest expense .................. $195 $204 $210 $207
Net margin and other revenues ..... $407 $390 $422 $450
Provision for credit losses ....... $100 $ 86 $111 $146
Provision for income taxes ........ $ 48 $ 53 $ 57 $ 60
Net earnings ...................... $ 93 $103 $111 $112
<CAPTION>
Year Ended December 31, 1996
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total finance revenue ............. $433 $414 $406 $410
Interest expense .................. $216 $211 $178 $192
Net margin and other revenues ..... $376 $389 $396 $431
Provision for credit losses ....... $ 67 $ 88 $ 92 $140
Provision for income taxes ........ $ 56 $ 54 $ 50 $ 50
Net earnings ...................... $ 98 $101 $ 94 $ 83
</TABLE>
34
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
- ------- -------------------------------------------------------
RESPONSIBILITY FOR FINANCIAL REPORTING
- --------------------------------------
The Company's management is responsible for preparing the financial
statements 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/DARRELL L. DAVIS s/THOMAS F. GILMAN
- ------------------ ------------------
Darrell L. Davis Thomas F. Gilman
Chairman of the Board Vice President and Controller
35
<PAGE>
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36
<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, 1997 and 1996, and the related consolidated
statements of net earnings and cash flows for each of the three years in the
period ended December 31, 1997. 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, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1997, in conformity with generally accepted
accounting principles.
s/ Deloitte & Touche L.L.P
January 22, 1998
37
<PAGE>
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38
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
- ------- -----------------------------------------------------------
AND FINANCIAL DISCLOSURES
-------------------------
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 I.)
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
(Omitted in accordance with General Instruction I.)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
(Omitted in accordance with General Instruction I.)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
(Omitted in accordance with General Instruction I.)
39
<PAGE>
Chrysler Financial Corporation and Subsidiaries
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
(a) The following documents are filed as 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 37 of Form 10-K)
Schedule II - Valuation and qualifying accounts and reserves
(page 63 of Form 10-K)
Notes:
(A) Separate Company financial statements of Chrysler Financial
Corporation for the years ended December 31, 1996, 1995 and
1994 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.
40
<PAGE>
Chrysler Financial Corporation and Subsidiaries
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.
41
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
4-D 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-E 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-F 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-G 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.
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.
42
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
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
24, 1997, 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 on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.
10-H Copy of Long Term Revolving Credit Agreement, dated as of April
24, 1997, 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 on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.
10-I 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-J 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-K 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-L 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.
43
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-M 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-N 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-O 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-P 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-Q 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-R 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-S 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-T 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-U 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.
44
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-V 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-W 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-X 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-Y 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-Z 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-AA 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-BB 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-CC Copy of Amended and Restated Master Custodial and Servicing
Agreement, dated as of December 16, 1997 between Chrysler Credit
Canada Ltd. and The Royal Trust Company, as Custodian.
10-DD Copy of Amended and Restated Series 1995-1 Supplement, dated as
of December 16, 1997, among Chrysler Credit Canada Ltd., The
Royal Trust Company, Prime Trust, Auto Receivables Corporation
and Chrysler Financial Corporation, to the Amended and Restated
Master Custodial and Servicing Agreement, dated as of December
16, 1997.
45
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-EE 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-FF 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-GG 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-HH 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-II 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-JJ 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-KK 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-LL 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.
46
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-MM 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-NN 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-OO 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-PP 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-QQ 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-RR 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-SS 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-TT 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-UU 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.
47
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-VV 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-WW 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-XX 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-YY 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-ZZ 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-AAA 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-BBB 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-CCC 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.
48
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-DDD 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-EEE 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-FFF 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-GGG 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-HHH 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-III 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-JJJ 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-KKK 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-LLL 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.
49
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-MMM 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-NNN 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-OOO 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-PPP 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-QQQ 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-RRR 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-SSS 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-TTT 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-UUU 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-VVV 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.
50
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-WWW 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-XXX 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-YYY 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-ZZZ 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.
Filed as Exhibit 10-OOOO to the Annual Report on Form 10-K of
Chrysler Financial Corporation for the year ended December 31,
1996, and incorporated herein by reference.
10-AAAA 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. Filed as Exhibit 10-PPPP to the
Annual Report on Form 10-K of Chrysler Financial Corporation for
the year ended December 31, 1996, and incorporated herein by
reference.
10-BBBB 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-CCCC 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-DDDD 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-EEEE 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. Filed as
Exhibit 10-TTTT to the Annual Report on Form 10-K of Chrysler
Financial Corporation for the year ended December 31, 1996, and
incorporated herein by reference.
51
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-FFFF 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. Filed as Exhibit 10-UUUU to the Annual Report on Form 10-K
of Chrysler Financial Corporation for the year ended December 31,
1996, and incorporated herein by reference.
10-GGGG Copy of Amended and Restated 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-HHHH 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. Filed as Exhibit 10-WWWW to the
Annual Report on Form 10-K of Chrysler Financial Corporation for
the year ended December 31, 1996, and incorporated herein by
reference.
10-IIII Copy of Series 1996-1 Supplement, dated as of September 30, 1996,
among U.S. Auto Receivables Company, as Seller, Chrysler
Financial Corporation, as Servicer, and The Bank of New York, as
Trustee, with respect to CARCO Auto Loan Master Trust. Filed as
Exhibit 4-EE to the Annual Report on Form 10-K of CARCO Auto Loan
Master Trust for the year ended December 31, 1996, and
incorporated herein by reference.
10-JJJJ Copy of Series 1996-2 Supplement, dated as of November 30, 1996,
among U.S. Auto Receivables Company, as Seller, Chrysler
Financial Corporation, as Servicer, and The Bank of New York, as
Trustee, with respect to CARCO Auto Loan Master Trust. Filed as
Exhibit 4-FF to the Annual Report on Form 10-K of CARCO Auto Loan
Master Trust for the year ended December 31, 1996, and
incorporated herein by reference.
10-KKKK Copy of Certificate of Trust of Premier Auto Trust 1997-1. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-1 for the quarter ended March 31, 1997, and
incorporated herein by reference.
10-LLLL Copy of Amended and Restated Trust Agreement, dated as of March
1, 1997, among Premier Receivables L.L.C., Chrysler Financial
Corporation, and Chase Manhattan Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1997-1. Filed as Exhibit 4.1
to the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-1
for the quarter ended March 31, 1997, and incorporated herein by
reference.
10-MMMM Copy of Indenture, dated as of March 1, 1997, between Premier
Auto Trust 1997-1 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1997-1. Filed as Exhibit 4.2
to the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-1
for the quarter ended March 31, 1997, and incorporated herein by
reference.
10-NNNN Copy of Sale and Servicing Agreement, dated as of March 1, 1997,
between Premier Auto Trust 1997-1 and Chrysler Financial
Corporation, with respect to Premier Auto Trust 1997-1. Filed as
Exhibit 4.3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-1 for the quarter ended March 31, 1997, and
incorporated herein by reference.
52
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-OOOO Copy of Receivables Sale Agreement, dated as of April 29, 1997,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Windmill Funding Corporation, and ABN AMRO Bank N.V., as
Administrative Agent. Filed as Exhibit 10-SSSS to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1997, and incorporated herein by
reference.
10-PPPP Copy of Receivables Sale Agreement, dated as of June 16, 1997,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Park Avenue Receivables Corporation, and the Chase Manhattan
Bank, as Funding Agent. Filed as Exhibit 10-TTTT to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1997, and incorporated herein by
reference.
10-QQQQ Copy of Receivable Sales Agreement, dated as of September 29,
1997, among Premier Receivables L.L.C., Chrysler Financial
Corporation, Thunder Bay Funding Inc., and Royal Bank of Canada,
as Agent. Filed as Exhibit 10-UUUU to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1997, and incorporated herein by reference.
10-RRRR Copy of Certificate of Trust of Premier Auto Trust 1997-2. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-2 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-SSSS Copy of Amended and Restated Trust Agreement, dated as of August
1, 1997, among Premier Auto Receivables Company, Chrysler
Financial Corporation, and Chemical Bank Delaware, as Owner
Trustee, with respect to Premier Auto Trust 1997-2. Filed as
Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-2 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-TTTT Copy of Indenture, dated as of August 1, 1997, between Premier
Auto Trust 1997-2 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust
1997-2. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1997-2 for the quarter ended September 30,
1997, and incorporated herein by reference.
10-UUUU Copy of Sale and Servicing Agreement, dated as of August 1, 1997,
between Premier Auto Trust 1997-2 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to
Premier Auto Trust 1997-2. Filed as Exhibit 4.3 to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1997-2 for the quarter
ended September 30, 1997, and incorporated herein by reference.
10-VVVV Copy of Certificate of Trust of Premier Auto Trust 1997-3. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-3 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-WWWW Copy of Amended and Restated Trust Agreement, dated as of
September 1, 1997, among Premier Auto Receivables Company,
Chrysler Financial Corporation, and Chemical Bank Delaware, as
Owner Trustee, with respect to Premier Auto Trust 1997-3. Filed
as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier
Auto Trust 1997-3 for the quarter ended September 30, 1997, and
incorporated herein by reference.
53
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
10-XXXX Copy of Indenture, dated as of September 1, 1997, between Premier
Auto Trust 1997-3 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust
1997-3. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1997-3 for the quarter ended September 30,
1997, and incorporated herein by reference.
10-YYYY Copy of Sale and Servicing Agreement, dated as of September 1,
1997, between Premier Auto Trust 1997-3. Filed as Exhibit 4.3 to
the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-3
for the quarter ended September 30, 1997, and incorporated herein
by reference.
10-ZZZZ Copy of Receivable Sale Agreement, dated as of November 6, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Preferred Receivables Funding
Corporation, as a Purchaser, Falcon Asset Securitization
Corporation, as a Purchaser and the First National Bank of
Chicago, as Administrative Agent.
10-AAAAA Copy of Receivable Sale Agreement, dated as of November 20, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Receivables Capital Corporation, as
Purchaser and Bank of America National Trust and Savings
Association, as Administrative Agent.
10-BBBBB Copy of Receivable Sale Agreement, dated as of December 3, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Old Line Funding Company, as Purchaser
and Royal Bank of Canada, as Agent.
10-CCCCC Copy of Receivable Sale Agreement, dated as of December 22, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Windmill Funding Corporation, as
Purchaser and ABN AMRO Bank N.V., as Administrative Agent.
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, and 4-G 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.
54
<PAGE>
Chrysler Financial Corporation and Subsidiaries
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
- continued
-----------
(b) The registrant filed the following report on Form 8-K during the
quarter ended December 31, 1997:
<TABLE>
<CAPTION>
Date of Report Date Filed Item Reported
-------------- ---------- -------------
<S> <C> <C>
November 20, 1997 November 20, 1997 5
Financial Statements Filed
--------------------------
None
</TABLE>
55
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56
<PAGE>
Chrysler Financial Corporation and Subsidiaries
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/D. L. DAVIS Chairman of the Board January 23, 1998
____________________________
D. L. Davis
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/D. L. DAVIS Chairman of the Board January 23, 1998
____________________________
D. L. Davis
Principal funding officer:
s/D. M. CANTWELL Vice President and Treasurer January 23, 1998
____________________________
D. M. Cantwell
Principal accounting officer:
s/T. F. GILMAN Vice President and Controller January 23, 1998
____________________________
T. F. Gilman
57
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58
<PAGE>
Chrysler Financial Corporation and Subsidiaries
SIGNATURES - continued
----------------------
THOMAS P. CAPO* Director January 23, 1998
Thomas P. Capo
DARRELL L. DAVIS* Director January 23, 1998
Darrell L. Davis
REX L. FRANSON* Director January 23, 1998
Rex L. Franson
WILLIAM J. O'BRIEN III* Director January 23, 1998
William J. O'Brien III
GARY C. VALADE* Director January 23, 1998
Gary C. Valade
*By
s/B. C. BABBISH
__________________
B. C. Babbish
Attorney-in-Fact
January 23, 1998
59
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60
<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, 1997 and 1996, and for each of the three
years in the period ended December 31, 1997, and have issued our report
thereon dated January 22, 1998; 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 L.L.P.
January 22, 1998
<PAGE>
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62
<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, 1997
Net reserve for insurance losses
and loss adjustment expenses $172 $ 88 $ -- $ 97(a) $163
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
<FN>
NOTES:
(a) Primarily reductions for claims settled
</TABLE>
63
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64
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX
- -------------
Exhibit No.
- -----------
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>
Chrysler Financial Corporation and Subsidiaries
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 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-E 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-F 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-G 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.
E-2
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
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.
10-G Copy of Short Term Revolving Credit Agreement, dated as of April
24, 1997, 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 on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.
10-H Copy of Long Term Revolving Credit Agreement, dated as of April
24, 1997, 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 on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.
E-3
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-I 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-J 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-K 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-L 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-M 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-N 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-O 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-P 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-Q 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.
E-4
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-R 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-S 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-T 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-U 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-V 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-W 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-X 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-Y 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-Z 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.
E-5
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-AA 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-BB 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-CC Copy of Amended and Restated Master Custodial and Servicing
Agreement, dated as of December 16, 1997, between Chrysler Credit
Canada Ltd. and The Royal Trust Company, as Custodian.
10-DD Copy of Amended and Restated Series 1995-1 Supplement, dated as
of December 16, 1997, 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 December 16, 1997.
10-EE 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-FF 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-GG 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-HH 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-II 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.
E-6
<PAGE>
Chrysler Financial Corporation and Subsidiaries
-----------------------------------------------
EXHIBIT INDEX- continued
- ------------------------
10-JJ 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-KK 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-LL 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-MM 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-NN 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-OO 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-PP 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-QQ 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-RR 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.
E-7
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-SS 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-TT 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-UU 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-VV 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-WW 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-XX 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-YY 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-ZZ 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-AAA 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.
E-8
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-BBB 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-CCC 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-DDD 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-EEE 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-FFF 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-GGG 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-HHH 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-III 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-JJJ 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-KKK 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.
E-9
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-LLL 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-MMM 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-NNN 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-OOO 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-PPP 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-QQQ 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-RRR 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-SSS 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-TTT 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.
E-10
<PAGE>
Chrysler Financial Corporation and Subsidiaries
-----------------------------------------------
EXHIBIT INDEX- continued
- ------------------------
10-UUU 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-VVV 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-WWW 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-XXX 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-YYY 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-ZZZ 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.
Filed as Exhibit 10-OOOO to the Annual Report on Form 10-K of
Chrysler Financial Corporation for the year ended December 31,
1996, and incorporated herein by reference.
10-AAAA 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. Filed as Exhibit 10-PPPP to the
Annual Report on Form 10-K of Chrysler Financial Corporation for
the year ended December 31, 1996, and incorporated herein by
reference.
10-BBBB 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-CCCC 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.
E-11
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-DDDD 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-EEEE 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. Filed as
Exhibit 10-TTTT to the Annual Report on Form 10-K of Chrysler
Financial Corporation for the year ended December 31, 1996, and
incorporated herein by reference.
10-FFFF 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. Filed as Exhibit 10-UUUU to the Annual Report on Form 10-K
of Chrysler Financial Corporation for the year ended December 31,
1996, and incorporated herein by reference.
10-GGGG Copy of Amended and Restated 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-HHHH 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. Filed as Exhibit 10-WWWW to the
Annual Report on Form 10-K of Chrysler Financial Corporation for
the year ended December 31, 1996, and incorporated herein by
reference.
10-IIII Copy of Series 1996-1 Supplement, dated as of September 30, 1996,
among U.S. Auto Receivables Company, as Seller, Chrysler
Financial Corporation, as Servicer, and The Bank of New York, as
Trustee, with respect to CARCO Auto Loan Master Trust. Filed as
Exhibit 4-EE to the Annual Report on Form 10-K of CARCO Auto Loan
Master Trust for the year ended December 31, 1996, and
incorporated herein by reference.
10-JJJJ Copy of Series 1996-2 Supplement, dated as of November 30, 1996,
among U.S. Auto Receivables Company, as Seller, Chrysler
Financial Corporation, as Servicer, and The Bank of New York, as
Trustee, with respect to CARCO Auto Loan Master Trust. Filed as
Exhibit 4-FF to the Annual Report on Form 10-K of CARCO Auto Loan
Master Trust for the year ended December 31, 1996, and
incorporated herein by reference.
10-KKKK Copy of Certificate of Trust of Premier Auto Trust 1997-1. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-1 for the quarter ended March 31, 1997, and
incorporated herein by reference.
10-LLLL Copy of Amended and Restated Trust Agreement, dated as of March
1, 1997, among Premier Receivables L.L.C., Chrysler Financial
Corporation, and Chase Manhattan Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1997-1. Filed as Exhibit 4.1
to the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-1
for the quarter ended March 31, 1997, and incorporated herein by
reference.
E-12
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-MMMM Copy of Indenture, dated as of March 1, 1997, between Premier
Auto Trust 1997-1 and The Bank of New York, as Indenture Trustee,
with respect to Premier Auto Trust 1997-1. Filed as Exhibit 4.2
to the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-1
for the quarter ended March 31, 1997, and incorporated herein by
reference.
10-NNNN Copy of Sale and Servicing Agreement, dated as of March 1, 1997,
between Premier Auto Trust 1997-1 and Chrysler Financial
Corporation, with respect to Premier Auto Trust 1997-1. Filed as
Exhibit 4.3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-1 for the quarter ended March 31, 1997, and
incorporated herein by reference.
10-OOOO Copy of Receivables Sale Agreement, dated as of April 29, 1997,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Windmill Funding Corporation, and ABN AMRO Bank N.V., as
Administrative Agent. Filed as Exhibit 10-SSSS to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1997, and incorporated herein by
reference.
10-PPPP Copy of Receivables Sale Agreement, dated as of June 16, 1997,
among Premier Receivables L.L.C., Chrysler Financial Corporation,
Park Avenue Receivables Corporation, and the Chase Manhattan
Bank, as Funding Agent. Filed as Exhibit 10-TTTT to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1997, and incorporated herein by
reference.
10-QQQQ Copy of Receivables Sale Agreement, dated as of September 29,
1997, among Premier Receivables L.L.C., Chrysler Financial
Corporation, Thunder Bay Funding Inc., and Royal Bank of Canada,
as Agent. Filed as Exhibit 10-UUUU to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1997, and incorporated herein by reference.
10-RRRR Copy of Certificate of Trust of Premier Auto Trust 1997-2. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-2 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-SSSS Copy of Amended and Restated Trust Agreement, dated as of August
1, 1997, among Premier Auto Receivables Company, Chrysler
Financial Corporation, and Chemical Bank Delaware, as Owner
Trustee, with respect to Premier Auto Trust 1997-2. Filed as
Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-2 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-TTTT Copy of Indenture, dated as of August 1, 1997, between Premier
Auto Trust 1997-2 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust
1997-2. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1997-2 for the quarter ended September 30,
1997, and incorporated herein by reference.
10-UUUU Copy of Sale and Servicing Agreement, dated as of August 1, 1997,
between Premier Auto Trust 1997-2 and Chrysler Financial
Corporation (excluding Schedules A and C), with respect to
Premier Auto Trust 1997-2. Filed as Exhibit 4.3 to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1997-2 for the quarter
ended September 30, 1997, and incorporated herein by reference.
E-13
<PAGE>
Chrysler Financial Corporation and Subsidiaries
EXHIBIT INDEX- continued
- ------------------------
10-VVVV Copy of Certificate of Trust of Premier Auto Trust 1997-3. Filed
as Exhibit 3 to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1997-3 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-WWWW Copy of Amended and Restated Trust Agreement, dated as of
September 1, 1997, among Premier Auto Receivables Company,
Chrysler Financial Corporation, and Chemical Bank Delaware, as
Owner Trustee, with respect to Premier Auto Trust 1997-3. Filed
as Exhibit 4.1 to the Quarterly Report on Form 10-Q of Premier
Auto Trust 1997-3 for the quarter ended September 30, 1997, and
incorporated herein by reference.
10-XXXX Copy of Indenture, dated as of September 1, 1997, between Premier
Auto Trust 1997-3 and The Bank of New York, as Indenture Trustee
(excluding Schedule A), with respect to Premier Auto Trust
1997-3. Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1997-3 for the quarter ended September 30,
1997, and incorporated herein by reference.
10-YYYY Copy of Sale and Servicing Agreement, dated as of September 1,
1997, between Premier Auto Trust 1997-3. Filed as Exhibit 4.3 to
the Quarterly Report on Form 10-Q of Premier Auto Trust 1997-3
for the quarter ended September 30, 1997, and incorporated herein
by reference.
10-ZZZZ Copy of Receivable Sale Agreement, dated as of November 6, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Preferred Receivables Funding
Corporation, as a Purchaser, Falcon Asset Securitization
Corporation, as a Purchaser and the First National Bank of
Chicago, as Administrative Agent.
10-AAAAA Copy of Receivable Sale Agreement, dated as of November 20, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Receivables Capital Corporation, as
Purchaser and Bank of America National Trust and Savings
Association, as Administrative Agent.
10-BBBBB Copy of Receivable Sale Agreement, dated as of December 3, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Old Line Funding Company, as Purchaser
and Royal Bank of Canada, as Agent.
10-CCCCC Copy of Receivable Sale Agreement, dated as of December 22, 1997,
among Premier Receivables L.L.C., as Seller, Chrysler Financial
Corporation, as Servicer, Windmill Funding Corporation, as
Purchaser and ABN AMRO Bank N.V., as Administrative Agent.
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 signatures of directors of Chrysler
Financial Corporation have been affixed to this Annual Report on
Form 10-K.
E-14
EXHIBIT 10-CC
CONFORMED COPY
CHRYSLER CREDIT CANADA LTD.,
Seller and Servicer
and
THE ROYAL TRUST COMPANY,
Custodian
AMENDED AND RESTATED
MASTER CUSTODIAL AND SERVICING AGREEMENT
Dated as of December 16, 1997
CP Doc #: 71685-1
December 17, 1997
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE I
Definitions
SECTION 1.01 Definitions................................................................. 5
SECTION 1.02 Other Definitional Provisions.............................................. 21
ARTICLE II
Conveyance of Receivables
SECTION 2.01 Conveyance of Receivables.................................................. 21
SECTION 2.02 Acceptance by Custodian; Appointment of Custodian.......................... 23
SECTION 2.03 Representations and Warranties of the Seller Relating to the Seller
and the Agreement.................................................... 24
SECTION 2.04 Representations and Warranties of the Seller Relating to the
Receivables. ...................................................... 27
SECTION 2.05 Addition of Accounts....................................................... 28
SECTION 2.06 Covenants of the Seller.................................................... 30
SECTION 2.07 Removal of Eligible Accounts............................................... 31
SECTION 2.08 Removal of Ineligible Accounts............................................. 33
SECTION 2.09 Sale of Ineligible Receivables............................................. 34
ARTICLE III
Administration and Servicing of Receivables
SECTION 3.01 Acceptance of Appointment and Other
Matters Relating to the Servicer.................................... 34
SECTION 3.02 Servicing Compensation..................................................... 35
SECTION 3.03 Representations, Warranties and Covenants of the Servicer.................. 36
SECTION 3.04 Reports and Records for the Custodian; Bank Account Statements............. 39
SECTION 3.05 Annual Servicer's Certificate.............................................. 39
SECTION 3.06 Annual Independent Accountants' Servicing Report........................... 40
SECTION 3.07 Tax Treatment.............................................................. 40
SECTION 3.08 Notices to CCCL............................................................ 40
SECTION 3.09 Adjustments................................................................ 41
ARTICLE IV
Rights of Master Custodial Certificateholders and
Allocation and Application of Collections
SECTION 4.01 Rights of Master Custodial Certificateholders.............................. 41
SECTION 4.02 Establishment of the Collection Account.................................... 42
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<PAGE>
SECTION 4.03 Allocations and Applications of Collections
and Other Funds...................................................... 43
SECTION 4.04 Unallocated Principal Collections.......................................... 44
ARTICLE V
Distributions and Reports to Master Custodial Certificateholders
ARTICLE VI
The Master Custodial Certificates
SECTION 6.01 The Master Custodial Certificates.......................................... 45
SECTION 6.02 Authentication of Master Custodial Certificates............................ 45
SECTION 6.03 New Issuances.............................................................. 46
SECTION 6.04 Registration of Transfer and Exchange of
Master Custodial Certificates....................................... 48
SECTION 6.05 Mutilated, Destroyed, Lost or Stolen Master Custodial Certificates......... 49
SECTION 6.06 Persons Deemed Owners...................................................... 49
SECTION 6.07 Access to List of Registered Certificateholders' Names
and Addresses. ..................................................... 50
SECTION 6.08 Meetings of Master Custodial Certificateholders............................ 50
ARTICLE VII
Other Matters Relating to the Seller
SECTION 7.01 Liability of the Seller.................................................... 52
SECTION 7.02 Limitation on Liability of the Seller...................................... 52
SECTION 7.03 Seller Indemnification..................................................... 52
ARTICLE VIII
Other Matters Relating to the Servicer
SECTION 8.01 Liability of the Servicer.................................................. 54
SECTION 8.02 Merger, Amalgamation or Consolidation of, or Assumption, of the
Obligations of the Servicer.......................................... 54
SECTION 8.03 Limitation on Liability of the Servicer and Others......................... 55
SECTION 8.04 Servicer Indemnification................................................... 55
SECTION 8.05 The Servicer Not To Resign................................................. 56
SECTION 8.06 Access to Certain Documentation and Information Regarding the
Account Assets....................................................... 56
SECTION 8.07 Delegation of Duties....................................................... 56
SECTION 8.08 Examination of Records..................................................... 56
SECTION 8.09 Limitation of Authority.................................................... 56
ARTICLE IX
Early Amortization Events
- ii -
<PAGE>
SECTION 9.01 Early Amortization Events.................................................. 57
SECTION 9.02 Cessation of Transfer of Principal Receivables Upon Occurrence of
Insolvency Event.................................................... 59
ARTICLE X
Service Defaults
SECTION 10.01 Service Defaults.......................................................... 59
SECTION 10.02 Custodian to Act; Appointment of Successor................................ 60
ARTICLE XI
The Custodian
SECTION 11.01 Duties of Custodian....................................................... 62
SECTION 11.02 Certain Matters Affecting the Custodian................................... 64
SECTION 11.03 Custodian Not Liable for Recitals in Master Custodial Certificates........ 65
SECTION 11.04 Custodian May Own Master Custodial Certificates........................... 65
SECTION 11.05 The Servicer to Pay Custodian's Fees and Expenses......................... 65
SECTION 11.06 Eligibility Requirements for Custodian.................................... 65
SECTION 11.07 Resignation or Removal of Custodian....................................... 66
SECTION 11.08 Successor Custodian....................................................... 66
SECTION 11.09 Merger, Amalgamation or Consolidation of Custodian........................ 67
SECTION 11.10 Instructions from Investor Master Custodial Certificateholders. .......... 67
SECTION 11.11 Tax Returns............................................................... 67
SECTION 11.12 Custodian May Enforce Claims Without Possession of Master
Custodial Certificates............................................ 67
SECTION 11.13 Suits for Enforcement..................................................... 68
SECTION 11.14 Representations, Warranties and Covenants of Custodian.................... 68
SECTION 11.15 Maintenance of Office or Agency........................................... 68
SECTION 11.16 Payment from Purchased Property. ......................................... 69
ARTICLE XII
Termination
SECTION 12.01 Termination of Custodial Arrangement...................................... 69
SECTION 12.02 Final Distribution........................................................ 69
SECTION 12.03 Seller's Termination Rights............................................... 71
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01 Amendment................................................................. 71
- iii -
<PAGE>
SECTION 13.02 Protection of Right, Title and Interest to Purchased Property............. 72
SECTION 13.03 Limitation on Rights of Master Custodial Certificateholders............... 73
SECTION 13.04 Reserved.................................................................. 74
SECTION 13.05 Governing Law............................................................. 74
SECTION 13.06 Notices................................................................... 75
SECTION 13.07 Severability of Provisions................................................ 75
SECTION 13.08 Assignment................................................................ 75
SECTION 13.09 Master Custodial Certificates Nonassessable and Fully Paid................ 75
SECTION 13.10 Further Assurances........................................................ 75
SECTION 13.11 No Waiver; Cumulative Remedies............................................ 75
SECTION 13.12 Counterparts.............................................................. 76
SECTION 13.13 Third Party Beneficiaries................................................. 76
SECTION 13.14 Actions by Master Custodial Certificateholders............................ 76
SECTION 13.15 Merger and Integration.................................................... 76
SECTION 13.16 Headings.................................................................. 76
EXHIBITS
EXHIBIT A Form of CCCL Certificate
EXHIBIT B Form of Assignment of Receivables (Relating to
ReceivablesTransferred on the First Closing Date
and each Addition Date)
EXHIBIT C Form of Annual Servicer's Certificate
EXHIBIT D-1 Form of Opinion of Counsel with respect to Amendments
EXHIBIT D-2 Form of Opinion of Counsel with respect to Accounts
EXHIBIT E Form of Reassignment
SCHEDULES
SCHEDULE 1 List of Accounts
SCHEDULE 2 Identification of the Collection Account
</TABLE>
- iv -
<PAGE>
AMENDED AND RESTATED MASTER CUSTODIAL AND
SERVICING AGREEMENT dated as of December 16, 1997,
between CHRYSLER CREDIT CANADA LTD., a Canadian
corporation, as Seller and Servicer, and THE ROYAL
TRUST COMPANY, a trust company organized and
existing under the laws of Canada, as Custodian.
WHEREAS the Seller, in the ordinary course of its business, finances
the purchase of floorplan inventory by automotive dealers thereby generating
receivables due from such dealers;
WHEREAS the Seller desires to sell certain of such existing and
future receivables and other property to the Custodian, as agent for the
holders from time to time of master custodial certificates, and the Custodian
will thereafter from time to time issue master custodial certificates
evidencing undivided ownership interests in such receivables and other
property;
WHEREAS the holders of master custodial certificates desire to
appoint the Custodian as custodian of the receivables and other property and
to authorize, empower and instruct the Custodian to purchase existing and
future receivables, receive the proceeds of the receivables and to perform
such other functions relating to the administration of the receivables as
their agent on the terms as provided herein; and
WHEREAS the Seller and the Custodian wish to amend and restate the
Master Custodial and Servicing Agreement made between them dated as of
September 1, 1992, as amended by a first amendment dated as of September 1,
1995.
In consideration of the mutual covenants and agreements herein
contained, each party agrees as follows for the benefit of the other parties
and for the benefit of the Master Custodial Certificateholders and any
Enhancement Provider to the extent provided herein:
ARTICLE I
Definitions
SECTION 1.01 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Account" shall mean each Initial Account and, from and after the
related Addition Date, each Additional Account. The term "Account" shall not
apply to any Removed Accounts reassigned or assigned to the Seller or the
Servicer in accordance with the terms of this Agreement.
"Account Assets" shall have the meaning specified in Section 2.01.
"Addition Date" shall mean, with respect to Additional Accounts, the
date from and after which such Additional Accounts are to be included as
Accounts pursuant to Section 2.05(c).
"Addition Notice" shall have the meaning specified in Section 2.05(c).
"Additional Account" shall mean each individual wholesale financing
account established by the Seller with a Dealer, which account is designated
pursuant to Section 2.05(a) or (b) to be included as an
<PAGE>
- 2 -
Account and is identified in the computer file or microfiche or written list
delivered to the Custodian by the Seller pursuant to Sections 2.01 and
2.05(d).
"Additional Cut-Off Date" shall mean, with respect to Additional
Accounts, the day specified in the Addition Notice delivered with respect to
such Additional Accounts pursuant to Section 2.05(c).
"Additional Issue Expenses" shall, with respect to any Series, have
the meaning specified in the related Supplement.
"Additional Custodial Servicing Expenses" shall mean any expenses
incurred by the Custodian, in the capacity of Successor Servicer if so
appointed pursuant to Section 10.02, due to the failure of CCCL, as initial
Servicer, to transfer to the Custodian the Related Records as required by
Section 10.01.
"Adjustment Payment" shall have the meaning specified in Section
3.09.
"Affiliate" shall mean, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, provided that a
Dealer which is partially owned by or financed by CCL shall not be an
Affiliate of CCCL solely as a result of such investment; and the terms
"Affiliated", "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" shall mean, with respect to any Series, the Person so
designated in the related Supplement.
"Agreement" shall mean this Amended and Restated Master Custodial
and Servicing Agreement, as the same may from time to time be amended,
modified, restated or otherwise supplemented, including, with respect to any
Series or Class, the related Supplement.
"Applicants" shall have the meaning specified in Section 6.07.
"Assignment" shall have the meaning specified in Section 2.01.
"Available Subordinated Amount" shall mean, with respect to any
Series, at any time of determination, an amount equal to the available
subordinated amount determined in accordance with the related Supplement at
such time.
"Beneficiary" shall have the meaning specified in Section 7.04(a).
"BIA" shall mean the Bankruptcy and Insolvency Act, S.C. 1997, c.12.
"Business Day" shall mean any day other than (a) a Saturday or a
Sunday or (b) another day on which banks or trust companies in Toronto are
authorized or obligated by law to remain closed.
"CBRS" shall mean CBRS Inc. or its successor.
<PAGE>
- 3 -
"Certificate Register" shall have the meaning specified in Section
6.04.
"CCCL" shall mean Chrysler Credit Canada Ltd., a Canadian
corporation, and its successors in interest to the extent permitted
hereunder.
"CCCL Certificate" shall mean the custodial certificate issued to
CCCL and authenticated by the Custodian, substantially in the form of Exhibit
A.
"CCL" shall mean Chrysler Canada Ltd., a Canadian corporation, and
its successors in interest.
"CDIC" shall mean Canada Deposit Insurance Corporation or any
successor entity thereto.
"CFC" shall mean Chrysler Financial Corporation, a Michigan
corporation, and its successors in interest.
"Chrysler" shall mean Chrysler Corporation, a Delaware corporation,
and its successors in interest.
"Class" shall mean, with respect to any Series, any one of the
classes of Investor Master Custodial Certificates of that Series.
"Closing Date" shall mean, with respect to any Series, the Closing
Date specified in the related Supplement.
"Collateral Security" shall mean, with respect to any Receivable,
all security granted by or on behalf of the related Dealer with respect
thereto, including a security interest in the related Vehicle and Insurance
Proceeds, and all security granted by the Dealer in factory receivables,
parts inventory, equipment, fixtures, service accounts and real property and
all guarantees of such Receivable, and all proceeds of the foregoing.
"Collection Account" shall have the meaning specified in Section
4.02.
"Collection Period" shall mean, with respect to any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
"Collections" shall mean, without duplication, all payments by or on
behalf of Dealers received by the Servicer in respect of the Receivables,
other than amounts paid by CCL under an indemnity dated December 31, 1990
made by CCL in favor of the Seller, in the form of cash, cheques, wire
transfers or any other form of payment; provided, however, that amounts paid
by Dealers for deposit to such Dealers' Dealer Accounts shall be deemed not
to be Collections. Collections of Non-Principal Receivables shall include all
Recoveries.
"Concentration Account" shall have the meaning specified in Section
3.03(a).
"Custodial Adjusted Invested Amount" shall mean, at any time of
determination, the sum of the Series Adjusted Invested Amounts for all
outstanding Series at such time.
"Custodial Arrangement" shall mean the arrangement contemplated by
this Agreement relating to
<PAGE>
- 4 -
the sale and servicing of Receivables among the Seller, the Servicer, the
Holders, the Custodian and any Enhancement Provider.
"Custodial Available Subordinated Amount" shall mean, at any time of
determination, the sum of the Available Subordinated Amounts, if any, for all
outstanding Series at such time.
"Custodial Incremental Subordinated Amount" on any Determination
Date shall mean the sum of the Overconcentration Amount and the Ineligible
Amount, in each case, on such Determination Date.
"Custodial Termination Date" shall have the meaning specified in
Section 12.01.
"Custodial Trust Office" shall mean the principal office of the
Custodian in the Province of Ontario, at which at any particular time its
custodial business shall be administered, which office at the date of the
execution of this Agreement is located at c/o CIBC Mellon Trust Company, 393
University Avenue, 5th Floor, Toronto, Ontario M5G 2M7.
"Custodian" shall mean The Royal Trust Company, or its successor in
interest, or any successor custodian appointed as herein provided.
"Cut-Off-Date" shall mean August 31, 1992.
"Date of Processing" shall mean, with respect to any transaction,
the date on which such transaction is first recorded on the Servicer's
computer file of Accounts (without regard to the effective date of such
recordation).
"DBRS " shall mean Dominion Bond Rating Service Limited, or its
successor.
"Dealer" shall mean a Person engaged generally in the business of
purchasing Vehicles from a manufacturer thereof and holding such Vehicles for
sale or lease in the ordinary course of business.
"Dealer Accounts" shall mean the Dealers' wholesale deposit account
and/or the Dealers' goods and services tax reserve account.
"Dealer Overconcentration" on any Determination Date shall mean,
with respect to any Dealer or group of Affiliated Dealers, the excess of (a)
the aggregate of all amounts of Principal Receivables due from such Dealer or
group of Affiliated Dealers on the last day of the Collection Period
immediately preceding such Determination Date over (b) 2% of the Pool Balance
on the last day of such immediately preceding Collection Period.
"Defaulted Amount" on any Determination Date shall mean an amount
(which shall not be less than zero) equal to (a) the sum for all the Accounts
of the amount of Principal Receivables which became Defaulted Receivables
during the immediately preceding Collection Period minus (b) the sum of (i)
the full amount of any such Defaulted Receivables which are subject to
Transfer to the Seller or the Servicer in accordance with the terms of this
Agreement and (ii) the excess, if any, in respect of the immediately
preceding Determination Date of the amount determined pursuant to this clause
(b) in respect of such Determination Date over the amount determined pursuant
to clause (a) in respect of such Determination Date; provided, however, that,
if an Insolvency Event occurs with respect to the Seller, the amounts of
<PAGE>
- 5 -
such Defaulted Receivables which are subject to Transfer to the Seller shall
not be included in the sum so subtracted and, if an Insolvency Event occurs
with respect to the Servicer, the amount of such Defaulted Receivables which
are subject to Transfer to the Servicer shall not be included in the sum so
subtracted.
"Defaulted Receivables" on any Determination Date shall mean (a) all
Receivables in an Account which are charged off as uncollectible in respect
of the immediately preceding Collection Period in accordance with the
Servicer's customary and usual servicing procedures for servicing Dealer
floorplan receivables comparable to the Receivables which have not been sold
to third parties and (b) all Receivables which were Eligible Receivables when
transferred to the Custodian on the initial Closing Date or the related
Addition Date or on their respective Transfer Date, which arose in an Account
that thereafter became an Ineligible Account and which remained outstanding
for any six consecutive Determination Dates (inclusive of the Determination
Date on which such determination is being made) after such Account became an
Ineligible Account.
"Deposit Date" shall mean each day on which the Servicer deposits
Collections in the Collection Account pursuant to Section 4.03 hereof.
"Designated Accounts" shall have the meaning specified in Section
2.07(b).
"Designated Balance" shall have the meaning specified in Section
2.07(b).
"Determination Date" with respect to any Distribution Date shall
mean the day that is two Business Days prior to such Distribution Date.
"Distribution Date" shall mean the fifteenth day of each month or,
if such day is not a Business Day, the next succeeding Business Day.
"Distribution Date Statement" shall mean, with respect to any
Series, a report prepared by the Servicer on each Determination Date for the
immediately preceding Collection Period in substantially the form set forth
in the related Supplement.
"Dollars" or "$" shall mean Canadian dollars.
"Early Amortization Event" shall have the meaning specified in
Section 9.01 and, with respect to any Series, shall also mean any Early
Amortization Event specified in the related Supplement.
"Early Amortization Period" shall mean, with respect to any Series,
the period beginning at the close of business on the Business Day immediately
preceding the day on which an Early Amortization Event is deemed to have
occurred, and in each case ending upon the earlier to occur of (a) the
payment in full to the Investor Master Custodial Certificateholders of such
Series of the Invested Amount with respect to such Series, (b) the
Termination Date with respect to such Series and (c) if such Early
Amortization Period has resulted from the occurrence of an Early Amortization
Event described in Section 9.01(a), the end of the first Collection Period
during which an Early Amortization Event under Section 9.01(a) no longer
exists, so long as no other Early Amortization Event with respect to such
Series shall have occurred and the scheduled termination of the Revolving
Period with respect to such Series shall not have occurred.
"Eligible Account" shall mean each individual wholesale financing
account established by the
<PAGE>
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Seller with a Dealer in the ordinary course of business, which, as of the
date of determination with respect thereto: (a) is with a Dealer which is an
Eligible Dealer, (b) is in existence and maintained and serviced by the
Seller and (c) is an Account in respect of which no amounts have been charged
off as uncollectible or are classified as past due or delinquent.
"Eligible Dealer" shall mean a Dealer, as of the date of
determination thereof, (a) which is a corporation incorporated under the laws
of Canada or a Province thereof and is located and carries on business solely
in one or more of the Relevant Provinces, (b) which has not been identified
by the Ser vicer as being the subject of any voluntary or involuntary
bankruptcy or insolvency proceeding or any voluntary or involuntary
liquidation, dissolution or winding up proceeding and (c) which is not in
"dealer trouble status" as determined by the Servicer under the Floorplan
Financing Guidelines.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with
the corporate trust department of a depository institution registered under
the laws of Canada or any Province thereof, having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" shall mean (a) the corporate trust department
of the Custodian or (b) a trust company or Schedule I chartered bank
incorporated under the laws of Canada or any Province thereof which at all
times (i) has either (A) a long-term unsecured debt rating of AA (low) or
better by DBRS and of A+ (low) or better by CBRS or (B) a short term rating
of R-1 (middle) by DBRS and A-1 by CBRS and (ii) whose deposits are insured
by CDIC. If so qualified, the Custodian may be considered an Eligible
Institution for the purposes of clause (b) of this definition.
"Eligible Investments" shall mean book entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form payable in Dollars having original or remaining maturities of 30 days or
less which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, Canada;
(b) securities of or guaranteed by a province of Canada or a
municipality in Canada having a rating from each of the Rating Agencies in
the highest investment category granted thereby;
(c) demand deposits, time deposits or certificates of deposit of any
chartered bank or trust company incorporated under the laws of Canada or any
Province thereof and subject to supervision and examination by federal
banking or depository institution authorities; provided, however, that at the
time of the Custodian's investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the credit of a
person or entity other than such depository institution or trust company)
thereof shall have a credit rating from each of the Rating Agencies in the
highest investment category granted thereby;
(d) commercial paper having, at the time of the Custodian's
investment or contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest investment category granted thereby;
<PAGE>
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(e) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby;
(f) demand deposits, time deposits and certificates of deposit which
are fully insured by CDIC;
(g) bankers' acceptances issued by any chartered bank referred to in
clause (c) above;
(h) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, Canada or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of Canada, in either case entered into with a chartered bank or
trust company (acting as principal) described in clause (c); and
(i) any other investment with respect to the investment in which the
Rating Agency Condition shall have been satisfied at the time of the
Custodian's investment therein or contractual commitment to invest therein.
"Eligible Receivable" shall mean each Receivable:
(a) which was originated or acquired by the Seller in the
ordinary course of business;
(b) which arose under an Eligible Account and is payable in
Dollars;
(c) which is owned by the Seller at the time of Transfer by
the Seller to the Custodian;
(d) which represents the obligation of a Dealer to pay the
purchase price of, or to repay an advance or a payment made to or
for the account of such Dealer to finance the acquisition of, a
Vehicle or Vehicles;
(e) which (i) in the case of Receivables originated in the
Provinces of British Columbia, Alberta, Saskatchewan, Manitoba,
Ontario, Quebec, New Brunswick and Nova Scotia at the time of
delivery of the related Vehicle by or to a carrier into or in,
respectively, one of such Provinces or (ii) in the case of
Receivables originated in the remaining Relevant Provinces, within
the time prescribed for perfection of security interests in the
related Vehicles under the applicable conditional sale contract
legislation, is or will be at or within such time, as the case may
be, secured by a first priority perfected security interest in such
related Vehicle;
(f) which was created in compliance in all respects with
all Requirements of Law applicable thereto and is secured under a
Floorplan Financing Agreement which complies in all respects with
all Requirements of Law applicable to any party thereto, except to
the extent that the provisions of such Floorplan Financing
Agreements which permit the acceleration of indebtedness by reason
only of the filing of a proposal or notice of intention to file a
proposal under the BIA by the related Dealer may be of no force or
effect;
(g) with respect to which all consents, licenses, approvals
or authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by
CCL or the Seller in connection with the creation of such Receivable
or the Transfer thereof to the Custodian or the execution, delivery
and performance by the Seller of the Floor plan
<PAGE>
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Financing Agreement under which such Receivable was secured, have
been duly obtained, effected or given and are in full force and
effect;
(h) as to which at all times following the Transfer of such
Receivable to the Custodian, the Custodian will have good and
marketable title thereto free and clear of all Liens asserted by
Persons claiming an interest through or under the Seller arising
prior to such Transfer or arising at any time other than Liens
expressly permitted by this Agreement;
(i) which has been the subject of a valid Transfer from the
Seller to the Custodian of all the Seller's right, title and
interest therein (including any proceeds thereof);
(j) which will at all times be the legal, valid, binding
and assignable payment obligation of the Dealer relating thereto,
enforceable against such Dealer in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws,
including the PPSA, now or hereafter in effect, affecting the
enforcement of creditors' rights in general and to the extent such
bankruptcy laws render contractual provisions ineffective, and
except as such enforceability may be limited by general principles
of equity;
(k) which at the time of Transfer to the Custodian is not
subject to any right of rescission, set off (other than in respect
of such Dealer's Dealer Accounts), counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Dealer;
(l) as to which, at the time of Transfer of such Receivable
to the Custodian, CCL and the Seller have satisfied all their
respective obligations with respect to such Receivable required to
be satisfied at such time;
(m) as to which, at the time of Transfer of such Receivable
to the Custodian, neither CCL nor the Seller has taken nor failed to
take any action which would impair the rights of the Custodian or
the Master Custodial Certificateholders therein; and
(n) with respect to which the representations set forth in
Sections 2.04(a)(i) and (ii) were correct as of the Transfer Date
with respect thereto.
"Eligible Servicer" shall mean the Custodian or an entity which, at
the time of its appointment as Servicer, (a) is legally qualified and has the
capacity to service the Account Assets, (b) has the ability to service
professionally and competently a portfolio of similar accounts in accordance
with high standards of skill and care and (c) is qualified to use the
software that is then currently being used to service the Account Assets or
obtains the right to use or has its own software which is adequate to perform
its duties under this Agreement.
"Enhancement" shall mean the rights and benefits provided to the
Investor Master Custodial Certificateholders of any Series or Class pursuant
to any letter of credit, surety bond, cash collateral account, spread
account, guaranteed rate agreement, maturity liquidity facility, tax
protection agreement, interest rate swap agreement or other similar
arrangement. The subordination of any Series or Class to any other Series or
Class or of the Seller's Interest to any Series or Class shall be deemed to
be an Enhancement.
<PAGE>
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"Enhancement Agreement" shall mean any agreement, instrument or
document governing the terms of any Series Enhancement or pursuant to which
any Series Enhancement is issued or outstanding.
"Enhancement Provider" shall mean the Person providing any
Enhancement, other than any Master Custodial Certificateholders (including
any Holders of the Seller's Master Custodial Certificates) the Master
Custodial Certificates of which are subordinated to any Series or Class.
"Excess Principal Collections" shall have the meaning specified in
Section 4.04.
"Floorplan Financing Agreement" shall mean, collectively, the group
of related agreements between the Seller and the applicable Dealer pursuant
to which (a) (i) such Dealer grants to the Seller a security interest in the
specific Vehicles financed by the Seller, certain other collateral and the
proceeds thereof, or (ii) the title in Vehicles financed by the Seller is
reserved to or held by the Seller, and (b) such Dealer agrees to pay the
amounts secured thereby on demand.
"Floorplan Financing Guidelines" shall mean the Seller's written
policies and procedures, as such policies and procedures may be amended from
time to time, (a) relating to the operation of its floorplan financing
business, including the written policies and procedures for determining the
interest rate charged to Dealers, the other terms and conditions relating to
the Seller's wholesale financing accounts, the creditworthiness of Dealers
and the extension of credit to Dealers, and (b) relating to the maintenance
of Accounts and collection of Receivables.
"Governmental Authority" shall mean Canada, any Province or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Income Tax Act" shall mean the Income Tax Act (Canada), as amended.
"Ineligible Account" shall mean an Account that at the time of
determination is not an Eligible Account.
"Ineligible Amount" on any Determination Date shall mean the amount
of Ineligible Receivables included in the Purchased Property on the last day
of the Collection Period immediately preceding such Determination Date
pursuant to Section 2.09.
"Ineligible Receivable" shall mean any Receivable that arises in an
Eligible Account, was not an Eligible Receivable at the time of its Transfer
to the Custodian and was Transferred to the Custodian in accordance with
Section 2.09.
"Initial Account" shall mean each individual wholesale financing
account established by the Seller with a Dealer which is identified in the
computer file or microfiche or written list delivered to the Custodian on the
first Closing Date by the Seller pursuant to Section 2.01.
"Initial Invested Amount" shall mean, with respect to any Series and
for any date, an amount equal to the initial invested amount on such date
determined in accordance with the related Supplement. The Initial Invested
Amount for any Series may be increased or decreased from time to time as
specified in the related Supplement.
<PAGE>
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"Insolvency Event" shall mean any event specified in Section 9.01(b)
or 9.01(c).
"Insurance Proceeds" with respect to an Account shall mean any
amounts received by the Servicer pursuant to any policy of insurance which is
payable to the Seller.
"Invested Amount" shall mean, with respect to any Series and for any
date, an amount equal to the invested amount determined in accordance with
the related Supplement as at such date.
"Investor Master Custodial Certificateholder" shall mean the Person
in whose name a Registered Certificate is registered in the Certificate
Register, unless otherwise specified in the related Supplement.
"Investor Master Custodial Certificates" shall mean any one of the
custodial certificates issued and authenticated by the Custodian,
substantially in the form attached to the related Supplement, other than the
Seller's Master Custodial Certificates.
"Investors' Servicing Fee" shall mean the portion of the Servicing
Fee allocable to the Investor Master Custodial Certificateholders pursuant to
the terms of the Supplements.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other), preference, participation interest, security interest, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention agreement
and any financing lease having substantially the same economic effect as any
of the foregoing.
"Master Custodial Certificate" shall mean any of the Investor Master
Custodial Certificates or the Seller's Master Custodial Certificates.
"Master Custodial Certificate Rate" shall mean, with respect to any
Series or Class, the certificate rate specified therefor in the related
Supplement.
"Master Custodial Certificateholder" or "Holder" shall mean an
Investor Master Custodial Certificateholder or a Person in whose name any
one of the Seller's Master Custodial Certificates is registered, unless
otherwise specified in the related Supplement.
"Master Custodial Certificateholders' Interest" shall have the
meaning specified in Section 4.01.
"Miscellaneous Payments" shall mean, with respect to any Collection
Period, the sum of (a) Adjustment Payments and Transfer Deposit Amounts on
deposit in the Collection Account on the related Distribution Date and (b)
Unallocated Principal Collections available to be treated as Miscellane ous
Payments pursuant to Section 4.04 on such Distribution Date.
"Monthly Servicing Fee" shall mean, with respect to any Series, the
amount specified therefor, if applicable, in the related Supplement.
"Moody's" shall mean Moody's Investors Service, Inc. or its successor.
"Non-Principal Receivables" with respect to any Account shall mean
all amounts billed to the
<PAGE>
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related Dealer in respect of interest and all other non-principal charges,
including insurance service fees and handling fees.
"Notice Date" shall have the meaning specified in Section 2.05(c).
"Officer's Certificate" with respect to any corporation shall mean,
unless otherwise specified in this Agreement, a certificate signed by the
Chairman of the Board, the President or any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary of such
corporation.
"Opinion of Counsel" shall mean a written opinion of counsel, who
may be counsel to or of the Seller and who shall be reasonably acceptable to
the Custodian.
"Overconcentration Amount" on any Determination Date shall mean the
sum of the Dealer Overconcentrations on such Determination Date.
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Balance" shall mean, as of the time of determination thereof,
the aggregate amount of Principal Receivables held by the Custodian as agent
for the Master Custodial Certificateholders at such time.
"PPSA" shall mean the personal property security legislation in each
of the Relevant Provinces except Quebec, the Civil Code of Quebec in Quebec
and the Assignments of Book Debts Acts in the Provinces of Prince Edward
Island and Newfoundland, and shall include any legislation which replaces,
repeals or amends such personal property security legislation, Civil Code of
Quebec or Assignments of Book Debts Acts, as the case may be.
"Principal Receivables" with respect to an Account shall mean
amounts shown on the Servicer's records as Receivables (other than such
amounts which represent Non-Principal Receivables) payable by the related
Dealer. Notwithstanding anything to the contrary in this Agreement, (i)
Purchased Receivables shall be deemed not to be Principal Receivables for the
purposes of this Agreement and (ii) the amount of Principal Receivables on
any date of determination for all purposes of this Agreement shall be deemed
to be the actual amount thereof at such time minus the aggregate amount held
by the Seller in the related Dealers' Dealer Accounts at such time.
"Principal Terms" shall mean, with respect to any Series: (a) the
name or designation; (b) the initial principal amount (or method for
calculating such amount); (c) the Master Custodial Certificate Rate (or
method for the determination thereof); (d) the payment date or dates and the
date or dates from which entitlements to distributions of interest shall
accrue; (e) the method for allocating Collections to Investor Master
Custodial Certificateholders; (f) the designation of any Series Accounts and
the terms governing the operation of any such Series Accounts; (g) the
Monthly Servicing Fee, if applicable, and the Investors' Servicing Fee; (h)
the issuer and terms of any form of Enhancement with respect thereto; (i) the
terms on which the Investor Master Custodial Certificates of such Series may
be exchanged for Investor Master Custodial Certificates of another Series,
purchased by the Seller or remarketed to other investors; (j) the Termination
Date; (k) the number of Classes of Investor Master Custodial Certificates of
such Series and,
<PAGE>
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if more than one Class, the rights and priorities of each such Class; (l) the
extent to which the Investor Master Custodial Certificates of such Series
will be issuable in temporary or per manent global form (and, in such case,
the depository for such global certificate or certificates, the terms and
conditions, if any, upon which such global certificate may be exchanged, in
whole or in part, for definitive certificates, and the manner in which any
distributions payable on a temporary or global certificate will be paid); (m)
whether the Investor Master Custodial Certificates of such Series may be
issued in bearer form and any limitations imposed thereon; (n) the priority
of such Series with respect to any other Series; (o) whether such Series will
be part of a group; and (p) any other terms of such Series.
"Purchased Property" shall have the meaning specified in Section
2.01.
"Purchased Receivables" shall mean, with respect to an Initial
Account or Additional Account, the principal amounts shown on the Servicer's
records as amounts payable by the related Dealer (and interest accrued
thereon), from time to time in respect of advances or payments made by the
Seller to or for the account of such Dealer prior to the Cut-Off Date or the
applicable Additional Cut-Off Date, as the case may be, to finance the
acquisition of a Vehicle or Vehicles by such Dealer, in which an interest has
been Transferred by the Seller prior to the Cut-Off Date or the applicable
Additional Cut-Off Date, as the case may be, to any Person other than the
Custodian.
"Purchase Price" shall mean, with respect to any Account Asset for
any date on which such Account Asset is to be purchased pursuant to Section
3.03, (a) an amount equal to the amount payable by the Dealer in respect of
the Receivable relating thereto as reflected in the records of the Servicer
as of the date of purchase plus (b) interest accrued from the end of the last
Collection Period.
"Rating Agency" shall mean, with respect to any outstanding Series
Securities, each statistical rating agency selected by the Holders of the
related Series or Class to rate the Series Securities.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have notified the Seller, the Servicer, the
Custodian and the Holders of the Series or Class which selected such Rating
Agency in writing that such action will not result in a reduction or
withdrawal of the rating of any outstanding Series Securities with respect to
which it is a Rating Agency.
"Reassignment" shall have the meaning specified in Section 2.07(c).
"Receivables" shall mean, with respect to an Account, all amounts
shown on the Servicer's records as amounts payable by the related Dealer,
from time to time in respect of advances or payments made by the Seller to or
for the account of such Dealer, to finance the acquisition of a Vehicle or
Vehicles by such Dealer or in respect of the unpaid purchase price of a
Vehicle or Vehicles, together with the group of writings evidencing such
amounts and the security interests created in connection therewith.
Receivables which become Defaulted Receivables shall not be shown on the
Servicer's records as amounts payable (and will cease to be included as
Receivables) on the day on which they become Defaulted Receivables.
Receivables which arise in Designated Accounts from and after the related
Removal Commencement Date shall not be included in calculating the amount of
Receivables.
"Record Date" shall mean, with respect to any Distribution Date, the
close of business on the Business Day preceding such Distribution Date.
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"Recoveries" on any Determination Date shall mean all amounts
received, including Insurance Proceeds and amounts withdrawn from the Dealer
Accounts and applied in payment of Receivables, by the Servicer during the
Collection Period immediately preceding such Determination Date with respect
to Receivables which have previously become Defaulted Receivables.
"Registered Certificateholder" shall mean the Holder of a Registered
Certificate.
"Registered Certificates" shall have the meaning specified in
Section 6.01.
"Related Documents" shall mean, collectively, the Assignments and,
with respect to any Series, any applicable Enhancement Agreement.
"Related Records" shall have the meaning specified in Section 10.01.
"Relevant Provinces" shall mean the Provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Prince
Edward Island and Newfoundland. Nova Scotia will be deemed to be a "Relevant
Province" at such time as the Seller (i) requests its inclusion in such
definition and (ii) delivers to the Custodian an Opinion of Counsel to the
effect that all registration documents, financing statements and all such
similar instruments or documents required in connection therewith have been
filed in such jurisdiction. Not later than five Business Days prior to the
inclusion of Nova Scotia in the definition of "Relevant Provinces", the
Seller shall give each Rating Agency notice of such inclusion.
"Removal Commencement Date" shall have the meaning specified in
Section 2.07(b).
"Removal Date" shall have the meaning specified in Section 2.07(c).
"Removal Notice" shall have the meaning specified in Section
2.07(b).
"Removed Account" shall have the meaning specified in Section
2.07(c).
"Required Participation Amount" shall mean, at any date of
determination, an amount equal to (a) the sum of the amounts for each Series
obtained by multiplying the Required Participation Percentage for such Series
by the Initial Invested Amount for such Series at such time plus (b) the
Custodial Available Subordinated Amount on the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date following such
Determination Date).
"Required Participation Percentage" shall mean, with respect to any
Series, the greater of 100% and the percentage specified therefor in the
related Supplement.
"Requirements of Law" for any Person shall mean the articles of
incorporation and bylaws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding
upon such Person or to which such Person is subject, whether federal,
provincial or local (including usury laws and any consumer protection and
cost of credit disclosure laws).
"Responsible Officer" shall mean the Chief Executive Officer, any
Vice President or Assistant
<PAGE>
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Vice President Corporate Trust Division, of the Custodian or any other
officer to whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
"Revolving Period" shall mean, with respect to any Series, the
period specified as such in the related Supplement.
"Seller" shall mean Chrysler Credit Canada Ltd., a Canadian
corporation, and its successors in interest to the extent permitted
hereunder.
"Seller's Interest" shall have the meaning specified in Section 4.01.
"Seller's Invested Amount" shall mean, at any date of determination,
an amount equal to the Pool Balance at such time minus the aggregate Invested
Amounts for all outstanding Series at such time.
"Seller's Master Custodial Certificates" shall mean, collectively,
the CCCL Certificate and any outstanding Supplemental Certificates.
"Series" shall mean any series of Investor Master Custodial
Certificates.
"Series Account" shall mean any deposit, trust, escrow, reserve or
similar account maintained for the benefit of the Investor Master Custodial
Certificateholders of any Series or Class, as specified in any Supplement.
"Series Adjusted Invested Amount" shall mean, with respect to any
outstanding Series and for any Collection Period, the sum of (a) the Initial
Invested Amount of the Investor Master Custodial Certificates of such Series
on the Determination Date occurring in such Collection Period (after giving
effect to any changes therein to be made on the following Distribution Date
pursuant to the applicable Supplement) after subtracting therefrom the
excess, if any, of the cumulative amount (calculated in accordance with the
terms of the related Supplement) of investor charge offs for such Series as
of the last day of the immediately preceding Collection Period over the
aggregate reimbursement of such investor charge offs as of such last day, and
(b) the Available Subordinated Amount, if any, with respect to such Series,
on the Determination Date occurring in such Collection Period (after giving
effect to the allocations, distributions, withdrawals and deposits to be made
on the Distribution Date following such Determination Date pursuant to the
applicable Supplement) (or the initial Available Subordinated Amount with
respect to any Collection Period occurring prior to the first Determination
Date following the related Series Issuance Date).
"Series Allocable Defaulted Amount" shall mean, with respect to any
Series and for any Collection Period, the product of the Series Allocation
Percentage and the Defaulted Amount with respect to such Collection Period.
"Series Allocable Miscellaneous Payments" shall mean, with respect
to any Series and for any Collection Period, the product of the Series
Allocation Percentage and the amount of Miscellaneous Payments for such
Collection Period.
"Series Allocable Non-Principal Collections" shall mean, with
respect to any Series and for any Collection Period, the product of the
Series Allocation Percentage and the amount of Collections of Non-Principal
Receivables deposited in the Collection Account for such Collection Period.
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"Series Allocable Principal Collections" shall mean, with respect to
any Series and for any Collection Period, the product of the Series
Allocation Percentage and the amount of Collections of Principal Receivables
deposited in the Collection Account for such Collection Period.
"Series Allocation Percentage" shall mean, with respect to any
Series and for any Collection Period, the percentage equivalent of a
fraction, the numerator of which is the Series Adjusted Invested Amount for
such Collection Period and the denominator of which is the Custodial Adjusted
Invested Amount for such Collection Period.
"Series Cut-Off Date" shall mean, with respect to any Series, the
date specified as such in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series, the
date on which the Investor Master Custodial Certificates of such Series are
to be originally issued in accordance with Section 6.03 and the related
Supplement.
"Service Default" shall have the meaning specified in Section 10.01.
"Series Securities" shall mean any debt obligations, co-ownership
certificates, trust certificates or other securities issued by the Holders of
any Series or Class which are secured by or evidence undivided ownership
interests or beneficial interests in the undivided ownership interest in the
Purchased Property represented by the Series or Class.
"Service Transfer" shall have the meaning specified in Section 10.01.
"Servicer" shall initially mean CCCL, in its capacity as Servicer
under this Agreement, and after any Service Transfer, the Successor Servicer.
"Servicing Fee" shall have the meaning specified in Section 3.02.
"Servicing Officer" shall mean any officer of the Servicer involved
in, or responsible for, the administration and servicing of the Receivables
whose name appears on a list of servicing officers furnished to the Custodian
by the Servicer as such list may from time to time be amended.
"Standard & Poor's" shall mean Standard & Poor's Corporation or its
successor.
"Successor Servicer" shall have the meaning specified in Section
10.02(a).
"Supplement" shall mean, with respect to any Series, a Supplement to
this Agreement, executed and delivered in connection with the original
issuance of the Investor Master Custodial Certificates of such Series
pursuant to Section 6.03, and all amendments thereof and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in
Section 6.03(c).
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel satisfactory to the
<PAGE>
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addressee to the effect that for purposes of the Income Tax Act and the
corporations capital and income tax legislation of the Province of Ontario:
(a) such action will not adversely affect the
characterization of the Investor Master Custodial Certificates of
any outstanding Series or Class as evidencing undivided ownership
interests in the Purchased Property,
(b) except to the extent that proceeds from the disposition
of Account Assets in which a Holder has an interest may be subject
to tax in the hands of the Holder, such action will not cause or
constitute a taxable event with respect to any Investor Master
Custodial Certificateholders or the Custodian, and
(c) in the case of Section 6.03(b), the Investor Master
Custodial Certificates of the new Series will be characterized as
evidencing undivided ownership interests in the Purchased Property.
"Termination Date" shall mean, with respect to any Series, the
termination date specified in the related Supplement.
"Termination Notice" shall have the meaning specified in Section
10.01.
"Termination Proceeds" shall have the meaning specified in Section
12.02(c).
"Transaction Documents" shall have the meaning specified in Section
7.04(a).
"Transfer" shall have the meaning specified in Section 2.01 and
"Transfers", "Transferred" and "Transfer" shall have corresponding meanings
when used as a verb or noun.
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.04.
"Transfer Date" shall have the meaning specified in Section 2.01.
"Transfer Deposit Amount" shall mean, with respect to any Receivable
Transferred to the Seller or the Servicer, as applicable, pursuant to Section
2.04(c) or Section 3.03, the amounts specified in such Sections.
"Unallocated Principal Collections" shall have the meaning specified
in Section 4.04.
"Used Vehicle" shall mean any Vehicle held for sale by a Dealer that
is determined to be a "used" Vehicle in accordance with the Servicer's
standard wholesale servicing practices.
"Vehicle" shall mean an automobile or light-duty truck.
SECTION 1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have their
defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise
<PAGE>
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defined therein.
(b) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or
in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined,
shall have the respective meanings given to them under
generally accepted accounting principles in Canada. To the
extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under
generally accepted accounting principles in Canada, the
definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular
provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified; and the term "including" shall
mean "including without limitation".
(d) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
(e) In this Agreement, any reference to the Transfer to or
by the Custodian of any property, or the holding or
ownership by the Custodian of any property, shall be deemed
to refer to any such Transfer, holding or ownership, as the
case may be, to, for and on behalf of the Holders from time
to time of Master Custodial Certificates.
ARTICLE II
Conveyance of Receivables
SECTION 2.01 Conveyance of Receivables. By execution of this Agreement and in
consideration of the issuance by the Custodian to the Seller of the Seller's
Master Custodial Certificates, the transfer by the Custodian to the Seller of
the proceeds in respect of the issuance of the Investor Master Custodial
Certificates from time to time and the covenants and agreements contained in
this Agreement, the Seller does hereby sell, transfer, assign, set over and
convey ("Transfer"), without recourse (except as expressly provided herein),
to the Custodian, as agent for and on behalf of the Holders from time to time
of Master Custodial Certificates, on the first Closing Date, in the case of
the Initial Accounts, and on the applicable Addition Date, in the case of
Additional Accounts, to be held by the Custodian on behalf of such Holders as
tenants in common, all of the Seller's right, title and interest in, to and
under the Receivables in each Account, all Collateral Security with respect
thereto owned by the Seller at the close of business on the Cut-Off Date, in
the case of the Initial Accounts, and on the applicable Additional Cut-Off
Date, in the case of Additional Accounts, and all monies due or to become due
and all amounts received with respect thereto after the Cut-Off Date, in the
case of the Initial Accounts, and after the applicable Additional Cut-Off
Date, in the case of Additional Accounts, including interest thereon and all
other non-principal charges with respect thereto (including insurance service
fees and handling fees and Recoveries) and all proceeds
<PAGE>
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thereof. As of each Business Day prior to the earlier of (i) the occurrence
of an Early Amortization Event specified in Section 9.01(b), (c), (d) or (e)
and (ii) the Custodial Termination Date (each such Business Day being a
"Transfer Date"), and in consideration of the issuance by the Custodian to
the Seller of the Seller's Master Custodial Certificates, the transfer by the
Custodian to the Seller of the proceeds in respect of the issuance of the
Investor Master Custodial Certificates from time to time and the covenants
and agreements contained in this Agreement, the Seller does hereby Transfer
without recourse (except as expressly provided herein) and without further
action on the part of the Seller, to the Custodian, as agent for and on
behalf of the Holders from time to time of Master Custodial Certificates, to
be held by the Custodian on behalf of such Holders as tenants in common, all
of the Seller's right, title and interest in, to and under the Receivables in
each Account (other than any Receivables created in any Designated Account
from and after the applicable Removal Commencement Date), all Collateral
Security with respect thereto owned by the Seller at the close of business on
such Transfer Date and not theretofore conveyed to the Custodian, and all
monies due or to become due and all amounts received with respect thereto on
and after such Transfer Date, including interest thereon and all other non-
principal charges with respect thereto (including insurance service fees and
handling fees and Recoveries) and all proceeds thereof. Such Receivables,
Collateral Security, monies, amounts and proceeds in or relating to any
Initial Accounts and Additional Accounts (the "Account Assets") together with
all monies on deposit in, and Eligible Investments credited to, the
Collection Account or any Series Account, any Enhancements and all
contractual rights and remedies of the Custodian under this Agreement, the
Related Documents and the related Supplements shall collectively constitute
the assets held by the Custodian as aforesaid pursuant to this Agreement as
agent for and on behalf of the Holders from time to time of the Master
Custodial Certificates (the foregoing, whether now existing or hereafter
created, being referred to in this Agreement as the "Purchased Property").
The foregoing Transfers do not constitute, and are not intended to result in,
the creation or an assumption by the Custodian, any Agent or any Enhancement
Provider of any obligation of the Servicer, the Seller, CCL or any other
Person in connection with the Account Assets or under any agreement or
instrument relating thereto, including any obligation to any Dealers.
On the first Closing Date and each Addition Date the Seller shall,
to implement the related Transfers, duly execute and deliver a written
assignment in substantially the form of Exhibit B and record and file, at its
own expense, a proper financing statement and all necessary registration
documents, financing change statements and all such other similar instruments
or documents, as the case may be, necessary or desirable under the applicable
PPSA and in such manner, at such times and in such jurisdictions as are
necessary to preserve, protect and perfect the Transfers of the Account
Assets to the Custodian, as agent for and on behalf of the Holders from time
to time of Master Custodial Certificates, and to deliver a file stamped copy
of such financing statements or other appropriate evidence of such filing
under the applicable PPSA to the Custodian on or prior to the first Closing
Date, in the case of the Initial Accounts, and (if any additional filing is
so necessary) the applicable Addition Date, in the case of Additional
Accounts, and (if any additional filing is so necessary) as soon as
practicable after each Transfer Date. Except to the extent of ensuring that
the Seller has delivered an Opinion of Counsel at the time and in the form
required by this Agreement, the Custodian shall be under no obligation
whatsoever to ensure that the recordings and filings required by this Section
to be made by the Seller have been made.
In connection with such Transfers, the Seller further agrees, at its
own expense, on or prior to the first Closing Date, in the case of the
Initial Accounts, each applicable Addition Date, in the case of Additional
Accounts, each Transfer Date (other than in the case of clause (b) of this
paragraph), and the applicable Removal Commencement Date, in the case of
Removed Accounts, (a) to indicate in its computer files that the Account
Assets (other than those relating to Removed Accounts) have been
<PAGE>
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Transferred to the Custodian and (b) to deliver to the Custodian a computer
file or microfiche or written list containing a true and complete list of all
such Accounts (other than Removed Accounts) specifying for each such Account,
as of the Cut-Off Date, in the case of the Initial Accounts, the applicable
Additional Cut-Off Date, in the case of Additional Accounts, and the
applicable Removal Commencement Date, in the case of Removed Accounts, (i)
its account number, (ii) the aggregate amount of Receivables outstanding in
such Account and (iii) the aggregate amount of Principal Receivables in such
Account. Such file, microfiche or list, as supplemented from time to time to
reflect Additional Accounts and Removed Accounts, shall be marked as Schedule
1 to this Agreement. The Custodian shall be under no obligation whatsoever to
verify the accuracy or completeness of the information contained in Schedule
1 from time to time.
SECTION 2.02 Acceptance by Custodian; Appointment of Custodian.
(a) Subject to the terms and conditions hereof, the
Custodian hereby acknowledges its acceptance of and
agreement to accept hereafter, as agent for and on behalf
of the Holders from time to time of Master Custodial
Certificates, delivery of all right, title and interest
previously held by the Seller in, to and under the Account
Assets now and hereafter Transferred to the Custodian
pursuant to Section 2.01. The Custodian agrees to act as
the agent of the Holders from time to time of Master
Custodial Certificates to perform the functions and
services and exercise the authority conferred on it by such
Holders pursuant to this Agreement. The Custodian further
acknowledges that, prior to or simultaneously with the
execution and delivery of this Agreement, the Seller deliv
ered to the Custodian the computer file or microfiche or
written list relating to the Initial Accounts described in
the last paragraph of Section 2.01.
(b) Each Master Custodial Certificateholder, by its
purchase of the undivided ownership interest in the
Purchased Property evidenced by its acceptance of its
Master Custodial Certificate and without further action,
hereby irrevocably appoints, empowers and instructs the
Custodian to purchase the Account Assets forming part of
the Purchased Property as agent for and on behalf of the
Master Custodial Certificateholders and to hold the
Purchased Property as agent for and on behalf of the Master
Custodial Certificateholders as tenants in common and
authorizes, empowers and instructs the Custodian to take in
its name or in the name of the Master Custodial
Certificateholder or any of them all actions and exercise
on behalf of the Master Custodial Certificateholders all
rights of such Holders specifically contemplated by this
Agreement or any Supplement hereto, including the issuance
from time to time of Master Custodial Certificates to the
Seller and other Persons who agree to purchase undivided
ownership interests as tenants in common in the Purchased
Property evidenced by Master Custodial Certifi cates, the
right to receive and hold for the account of the Master
Custodial Certificate holders all Collections and other
amounts relating to the Account Assets or other Purchased
Property and to handle and disburse such Collections and
other amounts in accordance with this Agreement, the right
to appoint the Servicer and any Successor Servicer, the
right to service and administer the Purchased Property in
accordance with this Agreement, the right to release
Purchased Property in accordance with this Agreement
(including to permit the Seller or any other Person to
retain possession of some or all of the Purchased Property)
and the right to enforce the Account Assets and the
obligations of the Seller and Servicer under this
Agreement. Except as expressly set forth in this Agreement,
the authority of the
<PAGE>
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Custodian to take such actions and exercise such rights
hereunder shall be exclusive and no Master Custodial
Certificateholder shall have the right to possess the
Purchased Property or the proceeds thereof or to enforce or
service the Purchased Property on its own behalf. Each
Master Custodial Certificate holder hereby irrevocably
authorizes, empowers and instructs the Custodian to execute
and deliver on its behalf, as attorney-in-fact or
otherwise, all such documents and instruments as may be
necessary or desirable to accomplish the foregoing.
(c) The Custodian shall have no power to create, assume or
incur indebtedness or other liabilities, relating to the
Purchased Property or to Transfer the Purchased Property
other than as contemplated in this Agreement.
SECTION 2.03 Representations and Warranties of the Seller Relating to the
Seller and the Agreement. The Seller hereby represents and warrants to the
Custodian and the Master Custodial Certificateholders and Enhancement
Providers (if any) that:
(a) Organization and Good Standing. The Seller is a
corporation duly incorporated and validly existing and in
good standing under the Canada Business Corporations Act
and has, in all material respects, full corporate power,
authority and legal right to own its properties and conduct
its business as such properties are presently owned and
such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement
and to Transfer the Account Assets to the Custodian, as
contemplated herein.
(b) Due Qualification. The Seller is duly qualified to do
business and, where necessary, is in good standing and has
obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires
such qualification except where the failure to so qualify
or obtain licenses or approvals would not have a material
adverse effect on its ability to perform its obligations
hereunder.
(c) Due Authorization. The execution and delivery of this
Agreement and the applicable Supplement and the Related
Documents and the consummation of the transactions
provided for or contemplated by this Agreement and the
applicable Supplement and the Related Documents, have been
duly authorized by the Seller by all necessary corporate
action on the part of the Seller.
(d) No Breach. The execution and delivery of this
Agreement, the applicable Supplement and the Related
Documents, the performance of the transactions contemplated
by this Agreement and the applicable Supplement and the
Related Documents and the fulfillment of the terms hereof
and thereof, will not result in any breach of any of the
material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default
under, any indenture, contract, agreement, mortgage, deed
of trust, or other instrument to which the Seller is a
party or by which it or its properties are bound.
(e) No Violation. As of the applicable Closing Date, the
execution and delivery of this Agreement, the applicable
Supplement and the Related Documents, the performance of
the transactions contemplated by this Agreement and the
applicable Supplement and the
<PAGE>
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Related Documents and the fulfillment of the terms hereof
and thereof applicable to the Seller, will not violate any
material Requirements of Law applicable to the Seller.
(f) No Proceedings. As of the applicable Closing Date,
there are no proceedings or, to the knowledge of the
Seller, investigations pending or threatened against the
Seller before any Governmental Authority (i) asserting the
invalidity of this Agreement, the applicable Supplement or
any of the Related Documents, (ii) seeking to prevent the
issuance of any of the Master Custodial Certificates or the
consummation of any of the transactions contemplated by
this Agreement and the applicable Supplement or the Related
Documents, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Seller, would materially
and adversely affect the performance by the Seller of its
obligations under this Agreement and the applicable
Supplement or the Related Documents, (iv) seeking any
determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement and
the applicable Supplement, the Related Documents or the
Master Custodial Certificates or (v) seeking (except to the
extent expressly disclosed in the applicable Supplement) to
affect adversely or challenge or dispute filing positions
taken by the Seller with respect to the income or capital
tax attributes of the transactions contemplated by this
Agreement or the Account Assets under any federal or
provincial income or capital tax legislation.
(g) All Consents Required. As of the applicable Closing
Date, all appraisals, authorizations, consents, orders,
approvals or other actions of any Person or of any
Governmental Authority required in connection with the
execution and delivery of this Agreement, the applicable
Supplement and the Related Documents, the performance of
the transactions contemplated by this Agreement, the
applicable Supplement and any of the Related Documents, and
the fulfillment of the terms hereof and thereof, have been
obtained.
(h) Enforceability. This Agreement and the applicable
Supplement and the Related Documents each constitutes a
legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, including the PPSA, now
or hereafter in effect affecting the enforce ment of
creditors' rights in general and to the extent such
bankruptcy laws render contractual provisions ineffective,
and except as such enforceability may be limited by general
principles of equity.
(i) Record of Accounts. As of the first Closing Date, in
the case of the Initial Accounts, as of the applicable
Addition Date, in the case of the Additional Accounts, and,
as of the applicable Removal Commencement Date, in the case
of Designated Accounts, Schedule 1 to this Agreement is an
accurate and complete listing in all material respects of
all the Accounts as of the Cut-Off Date, the applicable
Additional Cut-Off Date or the applicable Removal
Commencement Date, as the case may be, and the information
contained therein with respect to the identity of such
Accounts and the Account Assets existing thereunder is true
and correct in all material respects as of the Cut-Off
Date, such applicable Additional Cut-Off Date or such
Removal Commencement Date, as the case may be.
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(j) Valid Transfer. Each Assignment constitutes a valid
Transfer to the Custodian of all right, title and interest
of the Seller in, to and under the Account Assets and, upon
the filing of the financing statements and the other
instruments and documents described in Sections 2.01 and
2.02 in the manner and at the times contemplated
thereunder, the Custodian will have a first priority
perfected ownership interest in such Account Assets except
for Liens expressly permitted by this Agreement. Except as
otherwise provided in this Agreement, neither the Seller
nor any Person claiming through or under the Seller (other
than the Custodian) has any claim to or interest in the
Account Assets.
The representations and warranties set forth in this Section 2.03
shall survive the Transfer of the Account Assets to the Custodian and the
issuance of the Master Custodial Certificates. Upon discovery by the Seller,
the Servicer, any Agent or the Custodian of a breach of any of the foregoing
representa tions and warranties, the party discovering such breach shall give
prompt written notice to the other parties, the Master Custodial
Certificateholders, any Agent and to any Enhancement Providers.
In the event of any breach of any of the representations and
warranties set forth in this Sec tion 2.03 having a material adverse effect
on the interests of the Investor Master Custodial Certificate holders of any
Series, then either the Custodian or the Holders of Investor Master Custodial
Certificates evidencing more than 50% of the aggregate unpaid principal
amount of Investor Master Custodial Certificates of such Series (or any other
Person specifically authorized in the applicable Supplement to take such
action on behalf of Master Custodial Certificateholders of such Series), by
notice then given in writing to the Seller (and to the Custodian, any
Enhancement Providers and the Servicer if given by the Investor Master
Custodial Certificateholders), may direct the Seller to purchase such Master
Custodial Certificateholders' Interest within 60 days of such notice (or
within such longer period as may be speci fied in such notice), and the
Seller shall be obligated to make such purchase on a Distribution Date
occurring within such 60 day or longer period on the terms and conditions set
forth below; provided, however, that no such purchase shall be required to be
made if, by the last Distribution Date occurring prior to the end of such 60
day period (or such longer period as may be specified), the representations
and warranties set forth in this Section 2.03 shall be satisfied in all
material respects, and any material adverse effect on such Master Custodial
Certificateholders' Interest caused thereby shall have been cured.
The Seller shall deposit in the Collection Account in immediately
available funds on the Business Day preceding such Distribution Date, in
payment for such purchase, an amount equal to the sum of the amounts
specified with respect to each Series to be purchased as provided above in
the related Supplement. Notwithstanding anything to the contrary in this
Agreement, such amounts shall be distributed to the Investor Master Custodial
Certificateholders of such Series on such Distribution Date in accordance
with Article IV and the terms of each Supplement. The obligation of the
Seller to purchase the Master Custodial Certificateholders' Interest pursuant
to this Section 2.03 as described herein shall constitute the sole remedy
respecting an event of the type specified in the first sentence of this
Section 2.03 available to the Investor Master Custodial Certificateholders
(or the Custodian on behalf of the Investor Master Custodial
Certificateholders) or any Enhancement Providers, except as otherwise
provided in Section 7.03.
SECTION 2.04 Representations and Warranties of the Seller Relating to the
Receivables.
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(a) Representations and Warranties. The Seller hereby
represents and warrants to the Custodian and the Master
Custodial Certificateholders and Enhancement Providers (if
any) that:
(i) All Account Assets existing on the
Cut-Off Date or, in the case of Addi-
tional Accounts, on the applicable
Addition Date and all Account Assets
Transferred to the Custodian on each
Transfer Date will have been Transferred
by the Seller to the Custodian free and
clear of any Lien, except as otherwise
expressly permitted by this Agreement.
(ii) With respect to all Account Assets
existing on the Cut-Off Date or, in the
case of Additional Accounts, on the
applicable Additional Cut-Off Date and
all Account Assets Transferred to the
Custodian on each Transfer Date, all
consents, licenses, approvals or
authorizations of or registrations or
declarations with any Governmental
Authority required to be obtained,
effected or given by the Seller or the
Custodian in con nection with the
Transfer of such Account Assets by the
Seller to the Custodian have been duly
obtained, effected or given and are in
full force and effect.
(iii) On the Cut-Off Date, each Initial Account
is an Eligible Account and, in the case
of Additional Accounts, on the applicable
Additional Cut-Off Date, each such
Additional Account is an Eligible
Account.
(iv) On the first Closing Date, in the case of
the Initial Accounts, and, in the case of
the Additional Accounts, on the
applicable Addition Date, and on each
Transfer Date, each Receivable
Transferred to the Custodian on such date
is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable,
such Receivable is Transferred to the
Custodian in accordance with Section
2.09.
(b) Notice of Breach. The representations and warranties
set forth in this Section 2.04 shall survive the Transfer
of the Receivables by the Seller to the Custodian and the
issuance of the Master Custodial Certificates. Upon
discovery by the Seller, the Servicer, any Agent or the
Custodian of a breach of any of the representations and
warranties set forth in this Section 2.04, the party
discovering such breach shall give prompt written notice to
the other parties, the Master Custodial Certificateholders,
any Agent and to any Enhancement Providers.
(c) Reassignment. In the event any representation or
warranty under Section 2.04(a) is not true and correct as
of the date specified therein with respect to any Account
Asset or Account and with respect to any particular Series
such breach has a material adverse effect on the related
Master Custodial Certificateholders' Interest in any such
Account Asset or the Purchased Property applicable to such
Account, then, on the last Determination Date occurring
within 30 days (or such longer period as may be agreed to
by the Custodian) of the earlier to occur of the discovery
of any such event by the Seller or the Servicer, or receipt
by the Seller or the Servicer of written notice of any such
event given by the Custodian, any Agent or any Enhancement
Provider, the Seller shall accept a Transfer by
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the Custodian of such Account Asset or, in the case of such
an untrue representation or warranty with respect to an
Account, all Account Assets relating to such Account, on
the terms and conditions set forth in the next succeeding
paragraph; provided, however, that no such Transfer shall
be required to be made with respect to any such Account
Asset if, by such Determination Date, the breached
representation or warranty shall then be true and correct
in all material respects and any such material adverse
effect caused thereby shall have been cured.
The Seller shall accept a Transfer by the Custodian of each such
Account Asset by directing the Servicer to deduct, subject to the next
sentence, the principal amount of the related Receivables from the Pool
Balance on or prior to the end of the Collection Period in which such
Transfer obligation arises. If, following such deduction, the Seller's
Invested Amount would be less than the Custodial Available Subordinated
Amount on the applicable Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date), then not later than
12:00 noon on the day on which such Transfer occurs, the Seller
shall deposit in the Collection Account in immediately available funds the
amount (the "Transfer Deposit Amount") by which the Seller's Invested Amount
would be less than such Custodial Available Subordinated Amount (up to the
principal amount of such Receivables); provided that if the Transfer Deposit
Amount is not deposited as required by this sentence, then the principal
amounts of such Receiv ables shall only be deducted from the Pool Balance to
the extent that the Seller's Invested Amount is not reduced below the
Custodial Available Subordinated Amount and the Receivables the principal
amounts of which have not been so deducted shall not be Transferred to the
Seller and shall remain part of the Purchased Property. Upon Transfer by the
Custodian of any such Account Asset, but only after payment by the Seller of
the Transfer Deposit Amount, if any, the Custodian shall automatically and
without further action be deemed to Transfer to the Seller, without recourse,
representation or warranty, all the right, title and interest of the
Custodian in and to such Account Asset. The Custodian shall execute such
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the Seller to effect the Transfer
of such Account Assets pursuant to this Section. The obligation of the Seller
to accept a Transfer of any such Account Asset and to pay any related
Transfer Deposit Amount shall constitute the sole remedy respecting the event
giving rise to such obligation avail able to the Custodian or to Master
Custodial Certificateholders or any Enhancement Providers, except as
otherwise provided in Section 7.03.
SECTION 2.05 Addition of Accounts.
(a) If, as of the close of business on the last day of any
Collection Period, the Pool Balance on such day is less
than the Required Participation Amount as of the following
Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such
Distribution Date (including pursuant to the terms of any
Supplement relating to excess funding accounts or other
arrangements corresponding to excess funding accounts
involving fluctuating levels of investments in Principal
Receivables)), then the Seller shall, within 10 Business
Days following the end of such Collection Period, Transfer
to the Custodian, the Account Assets of additional
designated Eligible Accounts of the Seller to be included
as Accounts in a sufficient amount such that after giving
effect to such addition the Pool Balance as of the close of
business on the Addition Date is at least equal to such
Required Participation Amount. The Seller shall satisfy the
conditions specified in Section 2.05(d) in designating such
Additional Accounts and Transferring the related Account
Assets to the Custodian. The failure of the Seller to
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Transfer Account Assets to the Custodian as provided in
this paragraph solely as a result of the unavailability of
a sufficient amount of Eligible Receivables shall not
constitute a breach of this Agreement; provided, however,
that any such failure will nevertheless result in the
occurrence of an Early Amortization Event described in
Section 9.01(a).
(b) The Seller may from time to time, at its sole
discretion, subject to the conditions specified in Section
2.05(d), voluntarily designate additional Eligible Accounts
to be included as Accounts and Transfer to the Custodian
the Account Assets of such Additional Accounts.
(c) Account Assets from such Additional Accounts shall be
Transferred to the Custodian, effective on a date (the
"Addition Date") specified in a written notice provided by
the Seller (or the Servicer on its behalf) to the
Custodian, the Rating Agencies, any Agent and any
Enhancement Providers specifying the Additional Cut-Off
Date and the Addition Date for such Additional Accounts
(the "Addition Notice") on or before the fifth Business Day
but not more than the 30th day prior to the related
Addition Date (the "Notice Date").
(d) The Seller shall be permitted to Transfer to the
Custodian the Account Assets of any Additional Accounts
designated by the Seller as such pursuant to Section
2.05(a) or (b) only upon satisfaction of each of the
following conditions on or prior to the related Addition
Date:
(i) the Seller shall have provided the
Custodian, any Agent, the Rating Agencies
and any Enhancement Providers with a
timely Addition Notice;
(ii) such Additional Accounts shall all be
Eligible Accounts;
(iii) the Seller shall have delivered to the
Custodian a duly executed Assignment and
the computer file, microfiche or written
list required to be delivered pursuant to
Section 2.01;
(iv) the Seller shall, to the extent required
by Section 4.03, have deposited in the
Collection Account all Collections with
respect to such Additional Accounts since
the Additional Cut-Off Date;
(v) (A) no selection procedures believed by
the Seller to be adverse to the interests
of the Investor Master Custodial
Certificateholders and Enhancement
Providers were used in selecting such
Additional Accounts; (B) the file,
microfiche or list of Additional Accounts
delivered pursuant to clause (iii) above
is true and correct in all material
respects as of the Additional Cut-Off
Date and (C) as of each of the Notice
Date and the Addition Date, the Seller
was not insolvent, will not have been
made insolvent by such Transfer and is
not aware of any pending insolvency;
(vi) the Rating Agency Condition shall have
been satisfied with respect to such
addition of Additional Accounts;
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(vii) the addition of the Receivables arising
in such Additional Accounts shall not
result in the occurrence of an Early
Amortization Event;
(viii) the Seller shall have delivered to the
Custodian and any Enhancement Providers a
certificate of a Vice President or more
senior officer (upon which, in the
absence of knowledge to the contrary,
they shall be entitled conclusively to
rely without making inquiries with regard
to the matters set forth therein and
without liability in so relying)
confirming (A) the items set forth in
paragraphs (ii) through (vii) above and
(B) that the Seller reasonably believes
that the addition of the Receivables
arising in such Additional Accounts will
not result in the occurrence of an Early
Amortization Event; and
(ix) on or before each Addition Date, the
Seller shall have delivered to the
Custodian, the Rating Agencies, any Agent
and any Enhancement Providers (A) an
Opinion of Counsel with respect to the
Receivables in the Additional Accounts
substantially in the form of Exhibit D2
and (B) except in the case of an addition
required by Section 2.05(a), a Tax
Opinion with respect to such addition.
(e) The Seller by Transferring the Account Assets of any
Additional Account shall be deemed to have represented and
warranted to the Custodian and any Enhancement Providers as
of the applicable Addition Date as to the matters set forth
in Section 2.05(d)(v). Upon discovery by the Seller, the
Servicer, any Agent, the Custodian or any Enhancement
Providers of a breach of the foregoing representation and
warranty, the party discovering the breach shall give
prompt written notice to the other parties, to any Agent
and to any Enhancement Providers.
SECTION 2.06 Covenants of the Seller. The Seller hereby covenants that:
(a) No Liens. Except for the Transfers hereunder or as
provided in Section 6.03(c), the Seller will not sell,
assign or transfer to any Person, or grant, create, incur,
assume or suffer to exist any Lien, except for Liens
created by persons not claiming through or under the
Seller, on, any of the Purchased Property, or any interest
therein, or on the Seller's Interest or the Seller's Master
Custodial Certificates and the Seller shall defend the
right, title and interest of the Custodian in, to and under
the Purchased Property, and any rights, remedies, powers
and privileges relating thereto, against all claims of
third parties claiming through or under the Seller.
(b) Delivery of Collections. In the event that the Seller
receives payments in respect of Receivables, the Seller
agrees to pay or cause to be paid to the Servicer or any
Successor Servicer all payments received thereby in respect
of the Receivables as soon as practicable after receipt
thereof, but in no event later than two Business Days after
the receipt by the Seller thereof.
(c) Notice of Liens. The Seller shall notify the Custodian
promptly after becoming
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aware of any sale, pledge, assignment, transfer or Lien of
or on any of the Purchased Property or any part thereof
other than the Transfers hereunder.
(d) Compliance with Law. The Seller hereby agrees to comply
in all material respects with all Requirements of Law
applicable to the Seller.
(e) Stock; Merger. The Seller will not (i) sell any shares
of any class of its voting capital stock to any Person
(other than CFC) if the effect of the sale or series of
sales would be that CFC no longer owns, directly or
indirectly, at least a majority of the issued and
outstanding shares in the capital stock of the Seller which
are entitled to vote under all circumstances for the
election of the Board of Directors of the Seller, or enter
into any transaction of merger, amalgamation or
consolidation or sell, lease, transfer or otherwise convey
all or substantially all of its assets, unless (A) the
surviving Person of such merger, amalgamation or
consolidation or the Person to whom such assets are sold,
leased, transferred or otherwise conveyed assumes all of
the Seller's obligations under this Agreement, (B) the
Seller shall have given the Rating Agencies and the
Custodian at least 10 days' prior notice and the Rating
Agency Condition shall have been satisfied with respect to
such transaction and (C) such merger, amalgamation or
consolidation or sale, lease, transfer or conveyance does
not conflict with any provisions of the Articles of
Incorporation of the Seller, or (ii) terminate, liquidate
or dissolve itself or wind up (or suffer any termination,
liquidation or dissolution or wind up).
SECTION 2.07 Removal of Eligible Accounts.
(a) On each Determination Date the Seller shall have the
right to purchase all (but not less than all) of the
Investor Master Custodial Certificateholders' right, title
and interest in or to all the Account Assets of one or more
Accounts in consideration of an increase in the Master
Custodial Certificateholders' Interests and remove such
Accounts from Schedule 1 in the manner prescribed in
Section 2.07(b).
(b) To remove Accounts, the Seller (or the Servicer on its
behalf) shall take the following actions and make the
following determinations:
(i) not less than five Business Days prior to
the Removal Commencement Date, furnish to
the Custodian, any Agent, any Enhancement
Providers and the Rating Agencies a
written notice (the "Removal Notice")
specifying the Determination Date on
which purchase and removal of the Account
Assets of one or more Accounts will
commence (a "Removal Commencement Date")
and the Accounts the future generated
Account Assets of which are no longer to
form part of the Purchased Property (the
"Designated Accounts");
(ii) determine on the Removal Commencement
Date with respect to such Designated
Accounts the aggregate balance of
Principal Receivables in respect of each
such Designated Account (the "Designated
Balance") and deliver as of such Removal
Commencement Date a list of the
Designated Accounts and the related
Designated Balance for each to the
Custodian
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and amend Schedule 1 on the Removal Date
by delivering to the Custodian, a
computer file, microfiche or written list
containing a true and complete list of
the Removed Accounts specifying the
account number for each such Account;
(iii) from and after such Removal Commencement
Date, cease to Transfer to the Custodian
any and all Account Assets arising in
such Designated Accounts;
(iv) represent and warrant to the Custodian
that the removal of such Eligible
Accounts on any Removal Date shall not,
in the reasonable belief of the Seller,
cause an Early Amortization Event to
occur or cause the Pool Balance to be
less than the Required Participation
Amount;
(v) represent and warrant to the Custodian
that no selection procedures believed by
the Seller to be adverse to the interests
of the Custodian, the Investor Master
Custodial Certificateholders or
Enhancement Providers were utilized in
selecting the Designated Accounts;
(vi) represent and warrant to the Custodian as
of the Removal Date that the list of
Removed Accounts delivered pursuant to
clause (ii) above is true and complete in
all material respects;
(vii) represent and warrant to the Custodian
that such removal will not result in a
reduction or withdrawal of the rating of
any outstanding Series Securities by the
applicable Rating Agency;
(viii) deliver to the Custodian, each Rating
Agency, any Agent and any Enhancement
Providers a Tax Opinion, dated the
Removal Commencement Date, with respect
to such removal; and
(ix) on or before the related Removal
Commencement Date, deliver to the
Custodian, any Agent and any Enhancement
Providers an Officer's Certificate
confirming the items set forth in clauses
(iv) through (vii) above; the Custodian,
in the absence of knowledge to the
contrary, may conclusively rely on such
Officer's Certificate and shall have no
duty to make inquiries with regard to the
matters set forth therein and shall incur
no liability in so relying.
No Designated Accounts shall be so removed if such removal will result in a
reduction or withdrawal of the rating of any outstanding Series Securities by
the applicable Rating Agency.
(c) All Account Assets arising in such Designated Accounts
prior to the Removal Commencement Date shall continue to be
Purchased Property from and after the Removal Commencement
Date. On or after the date upon which the aggregate amount
of Principal Receivables which constitute Account Assets in
such Designated Accounts shall be zero (the "Removal
Date"), upon the written request of the Servicer, the
Custodian shall
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execute and deliver to the Seller a reassignment in
substantially the form of Exhibit E (the "Reassignment")
with respect to such Designated Accounts which thereupon
shall be deemed to be removed from the Purchased Property
for all purposes (a "Removed Account").
SECTION 2.08 Removal of Ineligible Accounts.
(a) On any date on which an Account becomes an Ineligible
Account (which date shall be deemed to be the Removal
Commencement Date) the Seller shall commence removal of the
Account Assets of such Ineligible Account in the manner
prescribed in Section 2.08(b); provided, however, that if
an Account ceases to be a wholesale financing account of
the Seller, the Designated Balance of the Account is zero
and the Account is not otherwise an Ineligible Account,
such Account shall only become an Ineligible Account on the
date it is included by the Seller in a Removal Notice under
Section 2.08(b)(i).
(b) With respect to each Account that becomes an Ineligible
Account, the Seller (or the Servicer on its behalf) shall
take the following actions and make the following
determinations:
(i) promptly furnish to the Custodian, any
Agent and any Enhancement Providers a
Removal Notice specifying the Removal
Commencement Date and the Ineligible
Accounts to be treated as Designated
Accounts;
(ii) determine on the Removal Commencement
Date with respect to such Designated
Accounts, the Designated Balance with
respect to each such Designated Account
and deliver as of such Removal
Commencement Date a list of the
Designated Accounts and the related
Designated Balance for each to the
Custodian and amend Schedule 1 on the
Removal Date by delivering to the
Custodian a computer file, microfiche or
written list containing a true and
complete list of the Removed Accounts
specifying the account number for each
such Account; and
(iii) from and after such Removal Commencement
Date, cease to Transfer to the Custodian
any and all Account Assets arising in
such Designated Accounts.
(c) All Account Assets arising in such Designated Accounts
prior to the Removal Commencement Date shall continue to be
Purchased Property from and after the Removal Commencement
Date. On or after the Removal Date relating to such
Designated Accounts, upon the written request of the
Servicer, the Custodian shall execute and deliver to the
Seller a Reassignment with respect to such Designated
Accounts and such Designated Accounts shall be deemed
Removed Accounts.
SECTION 2.09 Sale of Ineligible Receivables. The Seller shall sell to the
Custodian on each Transfer Date any and all Account Assets that relate to
Ineligible Receivables arising in any Eligible Accounts, provided that (a) on
the Cut-Off Date or, in the case of Additional Accounts, on the related
Additional Cut-
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Off Date, and on the applicable Transfer Date, the Account in which such
Ineligible Receivables arise is an Eligible Account and (b) the Custodial
Incremental Subordinated Amount is adjusted in accordance with the definition
of Custodial Incremental Subordinated Amount.
ARTICLE III
Administration and Servicing of Receivables
SECTION 3.01 Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) The Servicer is hereby appointed by the Custodian to
service and administer the Account Assets, collect payments
due under the Receivables and charge off as uncollectible
Receivables, all in accordance with its customary and usual
servicing procedures for servicing wholesale receivables
comparable to the Receivables which the Servicer services
for its own account and in accordance with the Floorplan
Financing Guidelines. The Servicer shall have full power
and authority, acting alone or through any party properly
designated by it hereunder, to do any and all things in
connection with such servicing and administration which it
may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Section 10.01,
the Servicer is hereby authorized and empowered, unless
such power and authority is revoked by the Custodian on
account of the occurrence of a Service Default pursuant to
Section 10.01, (i) to instruct the Custodian to make
withdrawals and payments from the Collection Account and
any Series Account as set forth in this Agreement, (ii) to
instruct the Custodian to take any action required or
permitted under any Enhancement, (iii) to execute and
deliver, on behalf of the Custodian, the Master Custodial
Certificateholders and the Enhancement Providers, any and
all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables
and, after the delinquency of any Receivable and to the
extent permitted under and in compliance with applicable
Requirements of Law and to commence enforcement proceedings
with respect to such Receivables, (iv) to make any filings,
reports, notices, applications, registrations with, and
seek any consents or authorizations from, any Governmental
Authority as may be necessary or advisable to comply with
any Requirements of Law and (v) to delegate certain of its
servicing, collection, enforcement and administrative
duties hereunder with respect to the Accounts and the
Receivables to any Person who agrees to conduct such duties
in accordance with the Floorplan Financing Guidelines and
this Agreement; provided, however, that the Servicer shall
notify the Custodian, the Rating Agencies, any Agent and
any Enhancement Providers in writing of any such delegation
of its duties which is not in the ordinary course of its
business, that no delegation will relieve the Servicer of
its liability and responsibility with respect to such
duties and that the Rating Agency Condition shall have been
satisfied with respect to any such delegation. The
Custodian as agent for and on behalf of the Holders of the
Master Custodial Certificates shall furnish the Servicer
with any powers of attorney and other documents necessary
or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
(b) The parties hereto agree that Non-Principal
Receivables, whenever created, that have accrued in respect
of Principal Receivables which have been Transferred to the
<PAGE>
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Custodian, shall continue to be a part of the Purchased
Property notwithstanding any cessation of the Transfer of
additional Principal Receivables to the Custodian and
Collections with respect thereto shall continue to be
allocated and paid in accordance with the terms of this
Agreement.
(c) The Servicer shall not, and any Successor Servicer
shall not be obligated to, use separate servicing
procedures, offices, employees or accounts for servicing
the Account Assets from the procedures, offices, employees
and accounts used by the Servicer in connection with
servicing other wholesale receivables.
(d) The Servicer shall comply with and perform its
servicing obligations with respect to the Accounts and
Account Assets in accordance with the Floorplan Financing
Agreements relating to the Accounts and the Floorplan
Financing Guidelines, except insofar as provided in the
related Supplement. Subject to compliance with all Require-
ments of Law, the Servicer (or the Seller) may change the
terms and provisions of the Floorplan Financing Agreements
or the Floorplan Financing Guidelines in any respect
(including the calculation of the amount or the timing of
charge offs and the rate of the finance charge assessed
thereon), only if (i) as a result of such change, in the
reasonable judgment of the Servicer no Early Amortization
Event will occur at any time and none of the Enhancement
Providers, if any, or the Master Custodial
Certificateholders shall be adversely affected in any
material respect, (ii) such change is made applicable to
the comparable segment, if any, of wholesale accounts owned
or serviced by the Servicer which have characteristics the
same as, or substantially similar to, the Accounts which
are the subject of such change and (iii) such change is not
prohibited as provided in the related Supplement.
(e) All Collections shall be held in trust by the Servicer
for the benefit of the Master Custodial Certificateholders
and the Enhancement Providers and, within two Business Days
after receipt thereof, shall be segregated from the
Servicer's own funds and identified in relation to each
related Receivable. In the event that for any reason
payments on an Account cannot be identified as relating to
a specific Receivable, then the Seller and the Servicer
agree that such payments shall be allocated with respect to
(i) the principal balance of such Account first to the
oldest principal balance of such Account and (ii) interest
due under such Account first to interest due on such oldest
principal balance. The parties hereto agree that
Non-Principal Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed
to the Custodian shall continue to be a part of the
Purchased Property notwithstanding any cessation of the
transfer of additional Principal Receivables to the
Custodian and Collections with respect thereto shall
continue to be allocated and paid in accordance with the
terms of this Agreement.
SECTION 3.02 Servicing Compensation. CCCL, as Seller and initial Servicer,
agrees that the consideration received by it for the Account Assets shall
constitute full compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in the immediately following
paragraph. If a Successor Servicer other than CCCL or any of its Affiliates
shall be appointed as the Servicer, such Successor Servicer shall be entitled
to receive the Servicing Fee on each Distribution Date on or prior to the
Custodial Termination Date payable in arrears. The "Servicing Fee" shall be
the
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aggregate of the Monthly Servicing Fees, if applicable, specified in the
Supplements. The Servicing Fee shall be payable to the Successor Servicer
solely to the extent amounts are available for payment in accordance with the
terms of the Supplements.
The Servicer's expenses include the amounts due to the Custodian in
respect of its services as set forth in Section 11.05 and the reasonable fees
and disbursements of independent accountants and all other expenses incurred
by the Servicer in connection with its activities hereunder, and including
all other fees and expenses relating to the Purchased Property not expressly
stated herein to be for the account of the Master Custodial
Certificateholders. The Servicer shall be required to pay such expenses for
its own account, and shall not be entitled to any payment therefor other
than, in the case of a Successor Servicer, the Servicing Fee, if any. The
Servicer will be solely responsible for all fees and expenses incurred by or
on behalf of the Servicer in connection herewith and the Servicer will not be
entitled to any fee or other payment from, or claim on, any of the Purchased
Property (other than, in the case of a Successor Servicer, the Servicing Fee,
if any). Notwithstanding anything to the contrary contained in this Agreement
or any Supplement, if the Custodian is appointed as Successor Servicer
pursuant to Section 10.02, CCCL, as Seller and initial Servicer, shall
reimburse the Custodian for the Additional Custodial Servicing Expenses, if
any, and, without limiting the foregoing rights of the Custodian, the
Custodian shall be entitled to set off such Additional Custodial Servicing
Expenses, if any, only against monies to be distributed to the Holder of the
Seller's Master Custodial Certificate (subject to the rights of the Investor
Master Custodial Certificateholders).
CCCL, as Seller and initial Servicer, shall be responsible for
paying Additional Issue Expenses relating to any Series.
SECTION 3.03 Representations, Warranties and Covenants of the Servicer.
(a) CCCL, as Servicer, hereby makes, and any Successor
Servicer by its acceptance of its appointment hereunder
shall make, on each Closing Date (and on the date of
acceptance of any such appointment) the following
representations, warranties and, in the case of clauses
(vii), (viii), (ix), (x), (xi) and (xii), covenants to and
with the Custodian and the Enhancement Providers (if any):
(i) Organization and Good Standing. Such
party is a corporation duly incorporated,
validly existing and in good standing
under the laws of the jurisdiction of its
incorporation and has, in all material
respects, full corporate power, authority
and legal rights to own its properties
and conduct its wholesale receivable
servicing business as such properties are
presently owned and as such business is
presently conducted, and to execute,
deliver and perform its obligations under
this Agreement and the applicable
Supplement.
(ii) Due Qualification. Such party is duly
qualified to do business and is in good
standing and has obtained all necessary
licenses and approvals in each
jurisdiction in which the servicing of
the Account Assets as required by this
Agreement requires such qualification
except where the failure to so qualify or
obtain licenses or approvals would not
have a material adverse effect on its
ability to perform its obligations
hereunder.
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(iii) Due Authorization. The execution,
delivery, and performance of this
Agreement and the applicable Supplement
has been duly authorized by such party by
all necessary corporate action on the
part thereof.
(iv) Binding Obligation. Each of this Agreement
and the applicable Supplement constitutes
a legal, valid and binding obligation of
such party, enforceable in accordance
with its terms, except as enforceability
may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws, including the PPSA,
now or hereinafter in effect, affecting
the enforcement of creditors' rights in
general and to the extent such bankruptcy
laws render contractual provisions
ineffective, and except as such
enforceability may be limited by general
principles of equity.
(v) No Violation. The execution and delivery
of this Agreement and the applicable
Supplement by such party, the performance
of the transactions contemplated by this
Agreement and the applicable Supplement
and the fulfillment of the terms hereof
and thereof applicable to such party will
not violate, result in any breach of any
of the material terms and provisions of,
or constitute (with or without notice or
lapse of time or both) a material default
under, any Requirement of Law applicable
to such party or any indenture, contract,
agreement, mortgage, deed of trust, or
other instrument to which such party is a
party or by which it is bound.
(vi) No Proceedings. There are no proceedings
or, to the knowledge of such party,
investigations, pending or threatened
against such party before any court,
regulatory body, administrative agency or
other tribunal or Governmental Authority
seeking to prevent the issuance of the
Master Custodial Certificates or the
consummation of any of the transactions
contemplated by this Agreement and the
applicable Supplement, seeking any
determination or ruling that, in the
reasonable judgment of such party, would
materially and adversely affect the
performance by such party of its
obligations under this Agreement and the
applicable Supplement, or seeking any
determination or ruling that would materi
ally and adversely affect the validity or
enforceability of this Agreement and the
applicable Supplement.
(vii) Compliance with Requirements of Law. Such
party shall duly satisfy all obligations
on its part to be fulfilled under or in
connection with the Account Assets, will
maintain in effect all qualifications
required under Requirements of Law in
order to service properly the Account
Assets and will comply in all material
respects with all Requirements of Law in
connection with servicing the Account
Assets the failure to comply with which
would have a material adverse effect on
the interests held by the Custodian or
the rights of the Investor Master
Custodial Certificate holders and
Enhancement Providers.
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(viii) No Rescission or Cancellation. Such party
shall not permit any rescission or
cancellation of a Receivable forming part
of the Account Assets except as ordered
by a court of competent jurisdiction or
other Governmental Authority.
(ix) Protection of Rights of the Investor
Master Custodial Certificateholders and
Enhancement Providers. Such party shall
take no action, nor omit to take any
action, which would impair the rights of
Investor Master Custodial
Certificateholders and Enhancement
Providers in the Account Assets nor shall
it reschedule, revise or defer payments
due on any Receivable except in
accordance with the Floorplan Financing
Guidelines.
(x) Servicer Concentration Account. The
Servicer maintains deposit accounts
(collectively, the "Concentration
Account") into which it shall deposit all
amounts paid by the Dealers under
Floorplan Financing Agreements. The
Servicer agrees (i) that it will not
change this method of collection without
the prior written consent of the
Custodian, any Enhancement Providers and
any Agents; (ii) with respect to amounts
deposited into the Concentration Account
in respect of a particular day, that it
will not transfer such amounts from the
Concentration Account until the Servicer
has posted all Collections in respect of
the Account Assets for such day and (iii)
concurrently with the transfer of amounts
from the Concentration Account in respect
of a particular day, the Servicer will
make the deposits and transfers required
by the terms of this Agreement for such
day.
(xi) Negative Pledge. Except for the Transfers
hereunder to the Custodian, the Servicer
will not sell, pledge, assign or transfer
to any other Person, or grant, create,
incur or assume any Lien on, any of the
Purchased Property Transferred to the
Custodian, whether now existing or
hereafter created, or any interest
therein, and the Servicer shall defend
the rights, title and interest of the
Custodian, in, to and under any of the
Purchased Property Transferred to the
Custodian, whether now existing or
hereafter created, against all claims of
third parties claiming through or under
the Seller or the Servicer.
(xii) Possession of Chattel Paper Forming Part
of Account Assets. The Servicer shall at
all times retain in its possession in
Canada the chattel paper forming part of
the Account Assets Transferred to the
Custodian hereunder.
(b) Notice of Breach. The representations and warranties
set forth in this Section 3.03 shall survive the Transfer
of the Account Assets to the Custodian and the issuance of
the Master Custodial Certificates. Upon discovery by the
Seller, the Servicer,
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any Agent or the Custodian, of a breach of any of the
representations and warranties set forth in this Section
3.03, the party discovering such breach shall give prompt
written notice to the other parties, any Agent and to any
Enhancement Providers.
(c) Purchase. In the event any covenant contained in
Section 3.03(a) (vii), (viii) or (ix) has been breached in
any material respect with respect to any Account Asset or
Account and such breach has a material adverse effect on
the Master Custodial Certificateholders' Interest in such
Account Asset or the Purchased Property applicable to such
Account, then, on the last Determination Date occurring
within 30 days (or such longer period as may be agreed to
by the Custodian) of the earlier to occur of the discovery
of any such event by the Seller or the Servicer, or receipt
by the Seller or the Servicer of written notice of any such
event given by the Custodian, any Agent or any Enhancement
Providers, the Servicer shall purchase such Account Asset
or, in the case of a breach with respect to an Account, all
Account Assets in such Account, on the terms and conditions
set forth in the next succeeding paragraph; provided,
however, that no such purchase shall be required to be made
if, by such Determination Date, the breach shall have been
cured in all material respects and any material adverse
effect caused thereby shall have been cured. The Servicer
shall effect such purchase by depositing in the Collection
Account in immediately available funds an amount equal to
the Purchase Price of such Account Assets. Any such deposit
of such Purchase Price into the Collection Account shall be
considered a Transfer Deposit Amount and shall be applied
in accordance with the terms of this Agreement.
Upon each such payment of such Purchase Price, the Custodian shall
automatically and without further action be deemed to Transfer, to the
Servicer, without recourse, representation or warranty, all such Master
Custodial Certificateholders' right, title and interest in and to such
Account Assets. The Custodian, is hereby authorized by the Master Custodial
Certificateholders, to execute and deliver to the Servicer an assignment,
substantially in the form of a Reassignment, of such Account Assets and take
such other actions as shall be reasonably requested by the Servicer to effect
the Transfer of any such Account Assets pursuant to this Section. The
obligation of the Servicer to purchase such Account Assets, and to make the
deposits required to be made to the Collection Account as provided in the
preceding paragraph, shall constitute the sole remedy respecting the event
giving rise to such obligation available to Master Custodial
Certificateholders or the Custodian or any Enhancement Providers, except as
otherwise provided in Section 8.04.
SECTION 3.04 Reports and Records for the Custodian; Bank Account Statements.
On or before each Distribution Date, with respect to each outstanding Series,
the Servicer shall deliver to any Enhancement Providers, the Rating Agencies,
the Custodian, any Agent and each Investor Master Custodial Certificateholder
a Distribution Date Statement for such Distribution Date substantially in the
form set forth in the related Supplement. The Servicer shall provide
summaries of the Floorplan Financing Guidelines as amended from time to time
to the Custodian and upon request, to the Rating Agencies.
SECTION 3.05 Annual Servicer's Certificate. The Servicer will deliver to the
Rating Agencies, the Custodian, any Agent and any Enhancement Providers on or
before April 30 of each calendar year, beginning with April 30, 1993, an
Officer's Certificate substantially in the form of Exhibit C stating that (a)
a review of the activities of the Servicer during the preceding calendar year
and of its performance under this Agreement was made under the supervision of
the officer signing such certificate and (b) to the
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best of such officer's knowledge, based on such review, the Servicer has
performed in all material respects its obligations under this Agreement
throughout such year, or, if there has been a material default in the
performance of any such obligation, specifying each such default known to
such officer and the nature and status thereof. A copy of such certificate
may be obtained by any Investor Master Custodial Certificateholder by a
request in writing to the Custodian addressed to the Custodial Trust Office.
SECTION 3.06 Annual Independent Accountants' Servicing Report. The Servicer
shall cause a firm of independent chartered accountants, who may also render
other services to the Servicer or to the Seller, to deliver to the Custodian,
the Rating Agencies, each Agent and each Enhancement Provider on or before
April 30 of each year, beginning April 30, 1993, a report addressed to the
Board of Directors of the Servicer and to the Custodian, to the effect that
such firm has examined the financial statements of the Servicer and issued
its report thereon and that such examination: (a) was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances, (b) included tests relating to
wholesale receivables (including financing arrangements with Dealers to
finance their automobile and light-duty truck inventory) serviced for others
which procedures will be agreed upon by the Custodian, CCCL and the chartered
accountants and will be based upon the requirements of the Uniform Single
Audit Program for Mortgage Bankers, to the extent the procedures in such
program are applicable to the servicing obligations set forth in this
Agreement and (c) except as described in the report, disclosed no exceptions
or errors in the records relating to wholesale receivables (including
financing arrangements with Dealers to finance their automobile and
light-duty truck inventory) serviced for others that, in the firm's opinion,
and as agreed upon by the Custodian and CCCL, using paragraph four of such
Uniform Single Audit Program as a basis requires such firm to report. A copy
of such report may be obtained by any Investor Master Custodial
Certificateholder by a request in writing to the Custodian addressed to the
Custodial Trust Office.
SECTION 3.07 Tax Treatment. The Seller has entered into this Agreement and
the Investor Master Custodial Certificates have been (or will be) issued by
the Custodian with the intention that the Investor Master Custodial
Certificateholders will be treated under the provisions of the Income Tax Act
and the corporations capital and income tax legislation of the Relevant
Provinces, as owners of direct, undivided ownership interests as tenants in
common in the Purchased Property. The Seller, the Custodian and, by
acceptance of its Master Custodial Certificate, each Master Custodial
Certificateholder acknowledges that this Agreement does not and is not
intended to create the relationship of partnership between or among any two
or more of them. Each of the Servicer and the Custodian acknowledges that it
does not have and agrees that it will not exercise or purport to exercise any
general authority to contract on behalf of any one or more of the Master
Custodial Certificateholders. Each of the Seller, the Servicer (including any
Successor Servicer), the Custodian and, by acceptance of its Master Custodial
Certificate, each Master Custodial Certificateholder agrees to treat the
Investor Master Custodial Certificates in a manner consistent with the
foregoing for purposes of all Canadian federal and provincial income and
capital tax legislation.
SECTION 3.08 Notices to CCCL. In the event CCCL is no longer acting as
Servicer, any Successor Servicer appointed pursuant to Section 10.02 shall
deliver or make available to CCCL, as the case may be, each certificate and
report required to be prepared, forwarded or delivered thereafter pursuant to
Sections 3.04, 3.05 or 3.06.
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SECTION 3.09 Adjustments.
(a) If the Servicer adjusts downward the amount of any
Principal Receivable because of a rebate, refund, credit
adjustment or billing error to a Dealer, or because such
Receivable was created in respect of a Vehicle which was
refused or returned by a Dealer, then, in any such case,
the Seller's Invested Amount will be automatically reduced
by the amount of the adjustment, subject to the last
sentence of this Section. Furthermore, if following such a
reduction the Seller's Invested Amount would be less than
the Custodial Available Subordinated Amount on the
immediately preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date following such
Determination Date), then the Seller shall be required to
pay an amount equal to such deficiency (up to the amount of
such adjustment) into the Collection Account on the
Business Day on which such adjustment or reduction occurs
(each such payment an "Adjustment Payment"). If the Seller
shall fail to make any deposit to the Collection Account
with respect to such Adjustment Payment or portion thereof
by the Determination Date relating to the Collection Period
with respect to which such Adjustment Payment is payable,
the amount of such Adjustment Payment or portion thereof
shall be allocated on such related Determination Date pro
rata among the then outstanding Series based on their
respective Series Allocation Percentages for the Collection
Period with respect to which such payment should have been
made.
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such
Collection was received by the Servicer in the form of a
cheque which is not honored for any reason or (ii) the
Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more
than the actual amount of such Collection, the Servicer
shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such
dishonoured cheque or mistake. Any Receivable in respect of
which a dishonoured cheque is received shall be deemed not
to have been paid.
ARTICLE IV
Rights of Master Custodial Certificateholders and
Allocation and Application of Collections
SECTION 4.01 Rights of Master Custodial Certificateholders. The Investor
Master Custodial Cer tificateholders with respect to each Series, shall be
entitled to an undivided ownership interest as tenants in common in, and
shall have the right to receive from the Purchased Property, to the extent
necessary to equal the required payments with respect to the Investor Master
Custodial Certificates of such Series at the times and in the amounts
specified in the related Supplement, the portion of Collections allocable to
Investor Master Custodial Certificateholders of such Series pursuant to this
Agreement and such Supplement, funds on deposit in the Collection Account
allocable to Investor Master Custodial Certificateholders of such Series
pursuant to this Agreement and such Supplement, funds on deposit in any
related Series Account and funds available pursuant to any related
Enhancement (collectively, with respect to all Series, the "Master Custodial
Certificateholders' Interest"), it being understood that the Investor Master
Custodial Certificateholders of any Series or Class shall not have the right
to receive funds from any Series Account or Enhancement for the benefit of
any other Series or Class. At any time the undivided ownership
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interest in the Purchased Property represented by an Investor Master
Custodial Certificate is the portion thereof that will entitle the Holder of
such Certificate to receive the aggregate amount determined to be allocable
to such Holder at that time and thereafter in accordance with the terms of
this Agreement and the applicable Supplement. The Holders of the Seller's
Master Custodial Certificates shall be entitled to an undivided ownership
interest as tenants in common in, and shall have the right to receive, the
remainder of the Purchased Property not allocated pursuant to this Agreement
or any Supplement to the Master Custodial Certificateholders' Interest,
including the right to receive Collec tions with respect to the Receivables
and other amounts at the times and in the amounts specified in any Supplement
to be paid to the Seller or to the Holders of the Seller's Master Custodial
Certificates (the "Seller's Interest"); provided, however, that the Holders
of the Seller's Master Custodial Certificates shall not have the right to
receive funds from the Collection Account, any Series Account or any
Enhancement, except as specifically provided in this Agreement or any
Supplement.
SECTION 4.02 Establishment of the Collection Account. The Servicer, for the
benefit of the Master Custodial Certificateholders and Enhancement Providers,
shall cause to be established and maintained in the name of the Custodian an
Eligible Deposit Account bearing a designation clearly indicating that the
funds deposited therein are held in trust for the Master Custodial
Certificateholders and Enhancement Providers (the "Collection Account"). The
Custodian shall possess all title documents to and other evidence of
ownership of all funds from time to time on deposit in, and all Eligible
Investments credited to, the Collection Account and all proceeds thereof. The
Custodian shall have sole signing authority in respect of the Collection
Account. If, at any time, the Collection Account ceases to be an Eligible
Deposit Account, the Servicer shall establish a substitute Eligible Deposit
Account as the Collection Account, instruct the Custodian to transfer any
cash and/or any Eligible Investments to such new Collection Account and, from
the date any such substitute account is established, such account shall be
the Collection Account. Except to the extent of any interest as a Master
Custodial Certificateholder, neither the Seller nor the Servicer, nor any
person or entity claiming by, through or under the Seller or Servicer, shall
have any right, title or interest in, or any right to withdraw any amount
from, the Collection Account. Pursuant to the authority granted to the
Servicer in Section 3.01, the Servicer shall have the power, revocable by the
Custodian, or by Holders of Investor Master Custodial Certificates evidencing
more than 50% of the aggregate unpaid principal amount of Investor Master
Custodial Certificates of such Series, to instruct the Custodian to make
withdrawals and payments from the Collec tion Account for the purposes of
carrying out the Servicer's or the Custodian's duties specified in this
Agreement.
All title documents to and other evidences of ownership of all
Eligible Investments shall be held by the Custodian, for the benefit of the
Master Custodial Certificateholders and the Enhancement Providers. Funds on
deposit in the Collection Account shall at the direction of the Servicer be
invested by the Custodian solely in Eligible Investments that will mature so
that such funds will be available at the close of business on or before the
Business Day next preceding the following Distribution Date (or on or before
10:00 a.m. on such following Distribution Date in the case of Eligible
Investments in respect of which the Custodian is the obligor) and the
Custodian may rely on, and shall be protected in acting on, such direction of
the Servicer. As of each Determination Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Collection Account received on such Determination Date shall
be credited to the Collection Account. Schedule 2 identifies the Collection
Account by setting forth the account number of such account, the account
designation of such account and the name and address of the institution with
which such account has been established. If a substitute Collection Account
is established pursuant to this Section 4.02, the Servicer shall provide to
the Custodian an amended Schedule 2, setting forth the relevant information
for such substitute Collection Account.
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SECTION 4.03 Allocations and Applications of Collections and Other Funds.
(a) Except as otherwise provided in Section 4.03(b), the
Servicer shall deposit Collections into the Collection
Account as promptly as possible after the Date of
Processing of such Collections, but in no event later than
the second Business Day after such Date of Processing.
(b) Notwithstanding anything in this Agreement to the
contrary, for so long as (i) CCCL remains the Servicer
hereunder, (ii) no Service Default has occurred and is
continuing and (iii) (x) CFC owns, directly or indirectly,
at least a majority of the issued and outstanding shares of
capital stock of CCCL which are entitled to vote under all
circumstances for the election of the Board of Directors of
CCCL and CFC maintains a short term rating of at least A-1
by Standard & Poor's and P-1 by Moody's (and for five
Business Days following any reduction of either such
rating), (y) CCCL arranges for and maintains a letter of
credit or other form of Enhancement in respect of the
Servicer's obligations to make deposits of collections on
the Receivables in the Collection Account that is
acceptable in form and substance to each Rating Agency, any
Agents and any Enhancement Providers or (z) CCCL otherwise
obtains the Rating Agency confirmations described below,
then, subject to any limitations in the confirmations
described below, the Servicer need not make the deposits of
Collections into the Collection Account as provided in
Section 4.03(a), but may make a single deposit into the
Collection Account in same day or next day funds not later
than 12:00 noon, Toronto time, on the Business Day
immediately preceding the Distribution Date in a net amount
equal to the amount which would have been on deposit on
that day with respect to the immediately preceding
Collection Period in the Collection Account; provided,
however, that prior to ceasing deposits as provided in
Section 4.03(a), the Seller shall have delivered to the
Custodian written confirmation from each of the Rating
Agencies that the failure by CCCL to make such deposits
will not result in a reduction or withdrawal of the rating
of any outstanding Series Securities.
(c) Subject to Section 4.04, but notwithstanding anything
else in this Agreement to the contrary, with respect to any
Collection Period, whether the Servicer is required to make
deposits of Collections pursuant to Section 4.03(a) or (b),
(i) the Servicer will only be required to deposit
Collections into the Collection Account up to the aggregate
amount of Collections required to be deposited into any
Series Account or, without duplication, distributed on the
related Distribution Date to Investor Master Custodial
Certificateholders, to any Agent or to any Enhancement
Provider pursuant to the terms of any Supplement or
Enhancement Agreement and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in
the Collection Account exceeds the amount required to be
deposited pursuant to clause (i) above, the Servicer will
be permitted to instruct the Custodian to withdraw the
excess from the Collection Account and distribute the
amount withdrawn in accordance with the Servicer's
instructions. Such excess shall be deemed to be allocable
to the Holder of the Seller's Master Custodial
Certificates.
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(d) Subject to and in accordance with Section 4.03(e),
Collections of Non-Principal Receivables and Principal
Receivables, Defaulted Receivables, Miscellaneous Payments
and unpaid Adjustment Payments will be allocated to each
Series from and after the related Series Cut-Off Date on
the basis of such Series' Series Allocable Non-Principal
Collections, Series Allocable Principal Collections, Series
Allocable Defaulted Amount and Series Allocable
Miscellaneous Payments or, in the case of unpaid Adjustment
Payments, in accordance with Section 3.09(a) and amounts so
allocated to any Series will not, except as specified in
the related Supplement, be available to the Investor Master
Custodial Certificateholders of any other Series.
Allocations thereof between the Master Custodial
Certificateholders' Interests and the Seller's Interest,
among the Series and among the Classes in any Series shall
be set forth in the related Supplement or Supplements.
(e) For purposes of Section 2.05(a) and of determining each
Series' Series Allocation Percentage for the specified
Collection Period:
(i) unless the related Supplement shall
provide otherwise, each Series upon
issuance, shall be deemed to have been
created and in existence as of the close
of business on the related Series Cut-Off
Date; and
(ii) unless the related Supplement shall
provide otherwise, each Series, upon the
final distribution to the Investor Master
Custodial Certificateholders of such
Series as described in Section 12.02,
shall be deemed to be no longer
outstanding as of the close of business
on the last day of the Collection Period
immediately preceding the Collection
Period in which such final distribution
occurs.
SECTION 4.04 Unallocated Principal Collections. On each Distribution Date,
(a) the Servicer shall allocate Excess Principal Collections (as described
below) to each Series as set forth in the related Supplement and (b) the
Servicer shall instruct the Custodian to withdraw from the Collection Account
and pay to the Seller (i) an amount equal to the excess, if any, of (x) the
aggregate amount for all outstanding Series of Collections of Principal
Receivables which the related Supplements specify are to be treated as
"Excess Principal Collections" with respect to such Distribution Date and all
amounts withdrawn from any excess funding accounts (or made available
pursuant to similar arrangements) other than any amounts to be paid directly
to Investor Master Custodial Certificateholders pursuant to the terms of the
related Supplement, over (y) the aggregate amount for all outstanding Series
which the related Supplements specify are "Principal Shortfalls" with respect
to such Distribution Date and, without duplication, (ii) the aggregate amount
for all outstanding Series of that portion of Series Allocable Principal
Collections which the related Supplements specify are to be allocated and
paid to the Seller with respect to such Distribution Date; provided, however,
that, in the case of clauses (i) and (ii), such amounts shall be paid to the
Seller only if the Seller's Invested Amount for such Distribution Date
(determined after giving effect to any Principal Receivables transferred to
the Custodian, on such date) exceeds the Custodial Available Subordinated
Amount for the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on
such Distribution Date). The amount held in the Collection Account as a
result of the proviso in the preceding sentence ("Unallocated Principal
Collections") shall be paid to the Seller at the time the Seller's Invested
Amount exceeds the Custodial Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date); provided,
however, that any Unallocated Principal Collections on deposit in the
Collection Account at any time during which any Series is in its amortization
period, accumulation period or Early Amortization Period shall be deemed to
be "Miscellaneous Payments" and
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shall be allocated and distributed in accordance with Section 4.03(d) and the
terms of each Supplement.
ARTICLE V
Distributions and Reports to Master Custodial Certificateholders
Distributions shall be made to, and reports shall be provided to,
Master Custodial Certificateholders as set forth in the applicable
Supplement.
ARTICLE VI
The Master Custodial Certificates
SECTION 6.01 The Master Custodial Certificates. Each Master Custodial
Certificate shall evidence the undivided ownership interest of the Holder
thereof in the Purchased Property as described in Section 4.01. The Investor
Master Custodial Certificates of any Series or Class shall be issued in fully
registered form unless otherwise specified in the related Supplement
("Registered Certificates") and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable Supplement. The CCCL
Certificate will be issued in registered form and shall be executed and
authenticated by the Custodian and delivered to the Seller. Except as
otherwise provided in any Supplement, Investor Master Custodial Certificates
shall be issued in minimum denominations of $1,000 and in integral multiples
of $1,000 in excess thereof. The CCCL Certificate shall be a single
certificate and shall initially represent the entire Seller's Interest. Each
Master Custodial Certificate shall be executed by manual or facsimile
signature on behalf of the Custodian by an authorized officer thereof. Master
Custodial Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Custodian shall not be rendered invalid,
notwithstanding that such individual ceased to be so authorized prior to the
authentication and delivery of such Master Custodial Certificates or does not
hold such office at the date of such Master Custodial Certificates. No Master
Custodial Certificate shall entitle the Holder thereof to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Master Custodial Certificate a certificate of authentication substantially in
the form provided for herein executed by or on behalf of the Custodian by the
manual signature of a duly authorized signatory, other than the officer
executing such Master Custodial Certificate pursuant to the sixth sentence of
this Section 6.01, and such certificate upon any Master Custodial Certificate
shall be conclusive evidence, and the only evidence, that such Master
Custodial Certificate has been duly authenticated and delivered hereunder.
Except as otherwise specified in the applicable Supplement, all Master
Custodial Certificates shall be dated the date of their authentica tion.
SECTION 6.02 Authentication of Master Custodial Certificates. The Custodian
shall execute, authenticate and deliver the Investor Master Custodial
Certificates of each Series and Class that are issued upon original issuance
to the Investor Master Custodial Certificateholders of such Series and Class
upon the order of the Seller. The Custodian shall execute, authenticate and
deliver the CCCL Certificate to the Seller simultaneously with its delivery
of the Investor Master Custodial Certificates of the first Series to be
issued hereunder.
The execution, authentication (subject to Section 11.06) or delivery
of a Master Custodial Certificate on behalf of the Custodian shall not be
construed as a representation or warranty by the Custodian as to the validity
of the Amended and Restated Master Custodial and Servicing Agreement, any
Supplement or of such Master Custodial Certificate or its issuance and the
Custodian shall in no respect be liable or answerable for the use made of the
Master Custodial Certificates or the proceeds thereof.
SECTION 6.03 New Issuances.
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(a) The Custodian may from time to time issue and
authenticate one or more new Series of Investor Master
Custodial Certificates. The Holders of the undivided
ownership interests in the Purchased Property evidenced by
the Investor Master Custodial Certificates of all
outstanding Series shall be equally and ratably entitled as
provided herein to the benefits of this Agreement without
preference, priority or distinction, all in accordance with
the terms and provisions of this Agreement and the
applicable Supplement except, with respect to any Series or
Class, as provided in the related Supplement.
(b) On or before the Series Issuance Date relating to any
new Series, the parties hereto will execute and deliver a
Supplement which will specify the Principal Terms of such
new Series. The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to such
new Series. The issuance by the Custodian of the Investor
Master Custodial Certificates of such new Series and the
obligation of the Custodian to execute and deliver the
related Supplement is subject to the satisfaction of the
following conditions:
(i) other than in the case of the initial
Series Issuance Date, on or before the
fifth Business Day immediately preceding
the Series Issuance Date, the Seller
shall have given the Custodian, the
Servicer, each Rating Agency, any Agent
and any Enhancement Provider notice of
such issuance and the Series Issuance
Date;
(ii) the Seller shall have delivered to the
Custodian the related Supplement, in form
satisfactory to the Custodian, executed
by each party thereto other than the
Custodian;
(iii) the Seller shall have delivered to the
Custodian any related Enhancement
Agreement executed by each party thereto,
other than the Custodian;
(iv) the Rating Agency Condition shall have
been satisfied with respect to such
issuance;
(v) such issuance will not result in the
occurrence of an Early Amortization Event
and the Seller shall have delivered to
the Custodian, any Agent and any
Enhancement Provider a certificate of one
Vice President or more senior officer of
the Seller, dated the Series Issuance
Date, to the effect that the Seller
reasonably believes that such issuance
will not result in the occurrence of an
Early Amortization Event and is not
reasonably expected to result in the
occurrence of an Early Amortization Event
at any time in the future;
(vi) the Seller shall have delivered to the
Custodian and any Enhancement Provider a
Tax Opinion, dated the Series Issuance
Date, and an Opinion of Counsel, dated
the Series Issuance Date, as to the
enforceability of the related Supplement
and as to compliance with applicable
securities laws, with respect to such
issuance; and
(vii) if such Series pursuant to Section
4.03(e)(i) is to be allocated Collections
with respect to the Collection Period
following the Collection Period in which
the Series Cut-Off Date occurs, the Pool
Balance on the first day of
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such Collection Period (after giving
effect to any Account Assets added as of
or prior to such first day to the
Purchased Property on or prior to the
related Series Issuance Date) shall equal
or exceed the Required Participation
Amount as of the first day of such
Collection Period (after giving effect to
each Series (including such Series)
theretofore issued which are to be
allocated Collections with respect to
such Collection Period) and the Seller
shall have delivered to the Custodian,
any Agent and any Enhancement Provider a
certificate of a Vice President or more
senior officer, dated the Series Issuance
Date, to such effect.
Upon satisfaction of the above conditions, the
Custodian shall execute the Supplement and, upon payment to
the Custodian of the consideration in respect of the
Investor Master Custodial Certificates of such Series,
shall issue, execute and authen ticate such Investor Master
Custodial Certificates.
(c) The Seller may surrender the CCCL Certificate to the
Custodian in exchange for a newly issued CCCL Certificate
and a second certificate (a "Supplemental Certificate"),
the terms of which shall be defined in a supplement to this
Agreement (which supplement shall be subject to Section
13.01 to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of the
Seller (or the holder of a Supplemental Certificate, in the
case of the transfer or exchange thereof, as provided
below), upon satisfaction of the following conditions:
(i) the Rating Agency Condition shall have
been satisfied with respect such exchange
(or transfer or exchange as provided
below); and
(ii) the Seller shall have delivered to the
Custodian, any Agent and any Enhancement
Provider a Tax Opinion, dated the date of
such exchange (or transfer or exchange as
provided below), and an Opinion of
Counsel, dated the date of such exchange
(or transfer or exchange as provided
below), as to enforceability of the
related Supplement and as to the
compliance with applicable securities
laws, with respect thereto.
The CCCL Certificate and the undivided ownership interest in the Purchased
Property represented thereby will at all times be beneficially owned by the
Seller. Any Supplemental Certificate may be trans ferred or exchanged only
upon satisfaction of the conditions set forth in clauses (i) and (ii) above.
SECTION 6.04 Registration of Transfer and Exchange of Master Custodial
Certificates.
(a) The Custodian shall cause to be kept at the office or
agency to be maintained in accordance with the provisions
of Section 11.15 a register (the "Certificate Register") in
which, subject to such reasonable regulations as it may
prescribe, a transfer agent and registrar (which shall
initially be the Custodian) (the "Transfer Agent and
Registrar") shall provide for the registration of the
Registered Certificates and of transfers and exchanges of
the Registered Certificates as herein provided. The
Transfer Agent and Registrar shall initially be the
Custodian and any co-transfer agent and co-registrar chosen
by the Seller and acceptable to the Custodian. Any
reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and
co-registrar unless the context requires otherwise.
Subject to Section 6.03, upon surrender for
registration of transfer of any
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Registered Certificate at any office or agency of the
Transfer Agent and Registrar maintained for such purpose,
one or more new Registered Certificates (of the same Series
and Class) in authorized denominations evidencing like
aggregate undivided ownership interests in the Purchased
Property shall be executed, authenticated and delivered by
the Custodian in the name of the designated transferee or
transferees.
Subject to Section 6.03, at the option of a
Registered Certificateholder, Registered Certificates (of
the same Series and Class) may be exchanged for other
Registered Certificates of authorized denominations
evidencing like aggregate undivided ownership interests in
the Purchased Property, upon surrender of the Registered
Certif icates to be exchanged at any such office or agency.
The preceding provisions of this Section 6.04
notwithstanding, the Custodian or the Transfer Agent and
Registrar, as the case may be, shall not be required to
register the transfer of or exchange any Master Custodial
Certificate for a period of 15 days preceding the due date
for any payment with respect to the Master Custodial
Certificate.
Whenever any Master Custodial Certificates are so
surrendered for exchange, the Custodian shall execute and
authenticate and the Transfer Agent and Registrar shall
deliver the Master Custodial Certificates which the Master
Custodial Certificateholder making the exchange is entitled
to receive. Every Master Custodial Certificate presented or
surrendered for registration of transfer or exchange shall
be accompanied by a written instrument of transfer in a
form satisfactory to the Custodian or the Transfer Agent
and Registrar duly executed by the Master Custodial
Certificateholder or such Holder's attorney duly authorized
in writing and by the transferee.
No service charge shall be made for any
registration of transfer or exchange of Master Custodial
Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with
any such transfer or exchange.
All Master Custodial Certificates surrendered for
registration of transfer and exchange or for payment shall
be canceled and disposed of in a manner satisfactory to the
Custodian; provided, however, that the Master Custodial
Certificates of any Series surrendered for transfer shall
not be disposed of until the Termination Date relating to
such Series.
The Custodian shall execute and deliver to the
Transfer Agent and Registrar Registered Certificates in
such amounts and at such times as are necessary to enable
the Transfer Agent and Registrar to fulfill its
responsibilities under this Agreement and the Master
Custodial Certificates.
(b) The Transfer Agent and Registrar will maintain at its
expense in the Province of Ontario an office or agency
where Master Custodial Certificates may be surrendered for
registration of transfer or exchange.
SECTION 6.05 Mutilated, Destroyed, Lost or Stolen Master Custodial
Certificates. If (a) any mutilated Master Custodial Certificate is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Master Custodial Certificate and (b) there is delivered to the
Transfer Agent and Registrar and the Custodian such security or indemnity as
may be required by them to save each of them harmless, then, in the absence
of
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notice to the Custodian that such Master Custodial Certificate has been
acquired by a bona fide purchaser, the Custodian shall execute and
authenticate and the Transfer Agent and Registrar shall deliver in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Master
Custodial Certificate, a new Master Custodial Certificate of like tenor and
evidencing the same aggregate undivided ownership interest in the Purchased
Property. In connection with the issuance of any new Master Custodial
Certificate under this Section, the Custodian or the Transfer Agent and
Registrar may require the payment by the Master Custodial Certificateholder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Custodian and Transfer Agent and Registrar) connected
therewith. Any duplicate Master Custodial Certificate issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership of
an undivided ownership interest in and to the Purchased Property in
accordance with this Agreement, as if originally issued, whether or not the
lost, stolen or destroyed Master Custodial Certificate shall be found at any
time.
SECTION 6.06 Persons Deemed Owners. The Custodian, the Transfer Agent and
Registrar and any agent of any of them may, prior to due presentation of a
Registered Certificate for registration of transfer, treat the Person or
Persons in whose name any Registered Certificate is registered as the owner
of the undivided ownership interest in the Purchased Property evidenced by
such Registered Certificate for the purpose of receiving distributions
pursuant to the terms of the applicable Supplement and for all other purposes
whatsoever and neither the Custodian, the Transfer Agent and Registrar nor
any agent of any of them shall be affected by any notice to the contrary.
Notwithstanding the foregoing, in determining whether the Holders of the
requisite Investor Master Custodial Certificates have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Master
Custodial Certificates owned by the Seller, the Servicer, any other holder of
a Seller's Master Custodial Certificate or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Custodian shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Master
Custodial Certificates which the Custodian knows to be so owned shall be so
disregarded. Master Custodial Certificates so owned which have been pledged
in good faith shall not be disregarded and may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Custodian the pledgee's
right so to act with respect to such Master Custodial Certificates and that
the pledgee is not the Seller, the Servicer, any other holder of a Seller's
Master Custodial Certificate or any Affiliate thereof.
SECTION 6.07 Access to List of Registered Certificateholders' Names and
Addresses. The Custodian will furnish or cause to be furnished by the
Transfer Agent and Registrar to the Servicer, within five business days after
receipt by the Custodian of a request therefor, a list in such form as the
Servicer may reasonably require, of the names and addresses of the Registered
Certificateholders. If one or more holders of Investor Master Custodial
Certificates having a face amount in excess of $1,000,000 (the "Applicants")
apply to the Custodian, and such application states that the Applicants
desire to communicate with other Investor Master Custodial Certificateholders
with respect to their rights under this Agreement or any Supplement or under
the Investor Master Custodial Certificates and is accom panied by a copy of
the communication which such Applicants propose to transmit, then the
Custodian, after having been adequately indemnified by such Applicants for
its costs and expenses, shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business hours to
the most recent list of Registered Certificateholders of such Series or all
outstanding Series, as applicable, held by the Custodian, within five
Business Days after the receipt of such application. Such list shall be as of
a date no more than 45 days prior to the date of receipt of such Applicants'
request.
Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Custodian that neither the Custodian,
the Transfer Agent and Registrar, nor any of their respective agents, shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Registered Certificateholders hereunder,
regardless of the sources from which such
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information was derived and the accuracy or inaccuracy thereof.
SECTION 6.08 Meetings of Master Custodial Certificateholders.
(a) If at the time any Master Custodial Certificates are
issued and outstanding with respect to any Series or Class
to which any meeting described below relates, the Custodian
or the Investor Master Custodial Certificateholders holding
at least 10% of the aggregate unpaid principal amount of
any Series may at any time call a meeting of Investor
Master Custodial Certificateholders of any Series or Class
or of all Series, such meeting to be at the expense of the
Servicer if called by the Custodian and at the expense of
the Investor Master Custodial Certificateholders if called
by them, to be held at such time and at such place as the
Custodian shall determine, for the purpose of approving a
modification of or amendment to, or obtaining a waiver of
any covenant or condition set forth in, this Agreement, any
Series Supplement or the Investor Master Custodial
Certificates or of taking any other action permitted to be
taken by Investor Master Custodial Certificateholders or
the Custodian hereunder or under any Series Supplement.
Notice of any meeting of Investor Master Custodial
Certificateholders, setting forth the time and place of
such meeting and in general terms the action proposed to be
taken at such meeting, shall be given in accordance with
Section 13.06, the first mailing to be not less than 10 nor
more than 180 days prior to the date fixed for the meeting.
To be entitled to vote at any meeting of Investor Master
Custodial Certificateholders a Person shall be (i) a Holder
of one or more Investor Master Custodial Certificates of
the applica ble Series or Class or (ii) a Person appointed
by an instrument in writing as proxy by the Holder of one
or more such Investor Master Custodial Certificates. The
only Persons who shall be entitled to be present or to
speak at any meeting of Investor Master Custodial
Certificateholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of
the Custodian and its counsel.
(b) At a meeting of Investor Master Custodial
Certificateholders, Persons entitled to vote Investor
Master Custodial Certificates evidencing a majority of the
aggregate unpaid principal amount of the applicable Series
or Class or all outstanding Series, as the case may be,
shall constitute a quorum. No business shall be transacted
in the absence of a quorum, unless a quorum is present when
the meeting is called to order. In the absence of a quorum
at any such meeting, the meeting may be adjourned for a
period of not less than 10 days; at the reconvening of the
adjourned meeting, the persons entitled to vote Investor
Master Custodial Certificates evidencing at least 25% of
the aggregate unpaid principal amount of the applicable
Series or Class or all outstanding Series, as the case may
be, shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting. Notice of
the reconvening of any adjourned meeting shall be given as
provided above except that such notice must be given not
less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of
the adjourned meeting shall state expressly the percentage
of the aggregate principal amount of the outstanding
applicable Investor Master Custodial Certificates which
shall constitute a quorum.
(c) Any Investor Master Custodial Certificateholder who has
executed an instrument in writing appointing a Person as
proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided
that such Investor Master Custodial Certificateholder shall
be considered as present or voting only with respect to the
matters covered by such instrument in writing. Subject to
the provisions of Section 13.01, any resolution passed or
decision taken at any meeting of Investor Master
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Custodial Certificateholders duly held in accordance with
this Section shall be binding on all Investor Master
Custodial Certificateholders of the applicable Series or
Class whether or not present or represented at the meeting.
(d) The Custodian shall appoint a temporary chairman of the
meeting. A permanent chairman and a permanent secretary of
the meeting shall be elected by a vote of the Holders of
Investor Master Custodial Certificates evidencing a
majority of the aggregate unpaid principal amount of
Investor Master Custodial Certificates of the applicable
Series or Class or all outstanding Series, as the case may
be, represented at the meeting. No vote shall be cast or
counted at any meeting in respect of any Investor Master
Custodial Certificate challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote
except as an Investor Master Custodial Certificateholder or
proxy. Any meeting of Investor Master Custodial
Certificateholders duly called at which a quorum is present
may be adjourned from time to time, and the meeting may be
held as so adjourned without further notice.
(e) The vote upon any resolution submitted to any meeting
of Investor Master Custodial Certificateholders shall be by
written ballot on which shall be subscribed the signatures
of Investor Master Custodial Certificateholders or proxies
and on which shall be inscribed the names of the Holders of
the Investor Master Custodial Certificates held or
represented by them and the unpaid principal amounts of
such Investor Master Custodial Certificates. The permanent
chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Investor
Master Custodial Certificateholders shall be prepared by
the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one
or more Persons having knowledge of the facts setting forth
a copy of the notice of the meeting and showing that said
notice was given in accordance with Section 13.06. The
record shall be signed and verified by the permanent
chairman and secretary of the meeting and one duplicate
shall be delivered to the Custodian to be preserved by the
Custodian and to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE VII
Other Matters Relating to the Seller
SECTION 7.01 Liability of the Seller. The Seller shall be liable for all
obligations, covenants, representations and warranties of the Seller arising
under or related to this Agreement. Except as provided in the preceding
sentence, the Seller shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as Seller hereunder.
SECTION 7.02 Limitation on Liability of the Seller. Subject to Sections 7.01
and 7.03, neither the Seller nor any of the directors or officers or
employees or agents of the Seller in its capacity as Seller shall be under
any liability to the Custodian, the Master Custodial Certificateholders or
any other Person for any action taken or for refraining from the taking of
any action in the capacity as Seller pursuant to this Agreement whether
arising from express or implied duties under this Agreement; provided, how
ever, that this provision shall not protect the Seller or any such person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
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reason of reckless disregard of obligations and duties hereunder. The Seller
and any director or officer or employee or agent of the Seller may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
SECTION 7.03 Seller Indemnification. Without limiting any other rights that
the Custodian, the Master Custodial Certificateholders and the Enhancement
Providers may have hereunder or under applicable law, the Seller shall
indemnify and hold harmless the Custodian, the Master Custodial Certifi-
cateholders and the Enhancement Providers from and against any loss,
liability, expense, damage, claim or injury suffered or sustained by reason
of any acts, omissions or alleged acts or omissions arising out of activities
of the Seller, the Custodian or the Servicer pursuant to this Agreement or
any Supplement, including any judgment, award, settlement, reasonable legal
fees and disbursements and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Seller shall not indemnify the Custodian if such
acts, omissions or alleged acts or omissions constitute fraud, gross
negligence, breach of fiduciary duty (other than negligent action) or willful
misconduct by the Custodian; and provided further that the Seller shall not
indemnify the Custodian, the Master Custodial Certificateholders or any
Enhancement Providers for any liabilities, cost or expense with respect to
any action taken by the Custodian at the request of any such Master Custodial
Certificateholders or Enhancement Providers to the extent the Custodian is
indemnified by such Master Custodial Certificateholders or Enhancement
Providers with respect to such action nor (unless otherwise provided in any
particular Supplement) with respect to any federal, provincial or local
income or sales taxes, goods and services tax, or large corporations and
capital taxes (or any interest or penalties with respect thereto) required to
be paid or remitted by the Custodian (in respect of fees payable to it under
this Agreement by the Servicer only) or any Master Custodial
Certificateholder or Enhancement Providers in connection herewith to any
taxing authority. Any indemnification pursuant to this Section 7.03 shall
only be made after payment in full of any amounts that the Seller is
obligated to deposit in the Collection Account pursuant to this Agreement.
Any indemnification under this Arti cle VII shall survive the termination of
this Agreement.
ARTICLE VIII
Other Matters Relating to the Servicer
SECTION 8.01 Liability of the Servicer. The Servicer shall be liable under
this Article VIII only to the extent of the obligations specifically
undertaken by the Servicer in its capacity as Servicer.
SECTION 8.02 Merger, Amalgamation or Consolidation of, or Assumption, of the
Obligations of the Servicer. The Servicer shall not consolidate or amalgamate
with any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or
amalgamation or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation
organized and existing under the laws of Canada or any
Province thereof and such corporation shall assume, without
the execution or filing of any paper or any further act on
the part of any of the parties hereto, the performance of
every covenant and obligation of the Servicer hereunder;
(b) the Servicer has delivered to the Custodian an
Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, amalgamation, conveyance
or transfer complies with this Section 8.02 and that all
conditions precedent herein provided for relating to such
transaction have been complied with; and
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(c) on or before the fifth Business Day immediately
preceding the date on which such consolidation,
amalgamation, conveyance or transfer is to be effected, the
Servicer shall have given each Rating Agency notice of its
intention to effect such consolidation, amalgamation,
conveyance or transfer on such date.
SECTION 8.03 Limitation on Liability of the Servicer and Others. Subject to
Sections 8.01 and 8.04, neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer, shall be under any liability
to the Custodian, the Master Custodial Certificateholders or any other Person
for any action taken or for refraining from the taking of any action in its
capacity as Servicer pursuant to this Agreement; provided, however, that this
provision shall not protect the Servicer or any such Person against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Servicer and any director
or officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties to service the Account Assets in accordance
with this Agreement which in its reasonable opinion may involve it in any
expense or liabil ity.
SECTION 8.04 Servicer Indemnification. Without limiting any other rights that
the Custodian, the Master Custodial Certificateholders and the Enhancement
Providers may have hereunder or under applicable law, the Servicer shall
indemnify and hold harmless the Custodian, the Master Custodial Cer-
tificateholders and the Enhancement Providers from and against any loss,
liability, expense, damage, claim or injury suffered or sustained by reason
of any acts, omissions or alleged acts or omissions arising out of activities
of the Servicer or the Custodian pursuant to this Agreement or any
Supplement, includ ing any judgment, award, settlement, reasonable legal fees
and disbursements and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided,
however, that the Servicer shall not indemnify the Custodian if such acts,
omissions or alleged acts or omissions constitute fraud, gross negligence,
breach of fiduciary duty (other than negligent actions) or willful misconduct
by the Custodian; and provided further that the Servicer shall not indemnify
the Custodian, the Master Custodial Certificateholders or Enhancement
Providers for any liabilities, cost or expense with respect to any action
taken by the Custodian at the request of the Master Custodial
Certificateholders or Enhancement Providers to the extent the Custodian is
indemnified by such Master Custodial Certificateholders or Enhancement
Providers with respect to such action or (unless otherwise specified in any
particular Supplement) with respect to any Canadian federal, provincial or
local income or sales taxes, goods and services taxes, large corporations or
capital taxes (or any interest or penalties with respect thereto) required to
be paid or remitted by the Custodian (in respect of fees payable to it under
this Agreement by the Servicer only) or any Master Custodial Certificate
holder or the Enhancement Providers in connection herewith to any taxing
authority. Any indemnifi cation under this Article VIII shall survive the
termination of this Agreement and the resignation or removal of the Servicer.
SECTION 8.05 The Servicer Not To Resign. The Servicer shall not resign from
the obligations and duties hereby imposed on it except upon determination
that (a) the performance of its duties hereunder is no longer permissible
under applicable law and (b) there is no reasonable action which the Servicer
could take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel
to such effect delivered to the Custodian and as to clause (b) above by an
Officer's Certificate of the Servicer to such effect. No such resignation
shall become effective until the Custodian or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance
with Section 10.02 hereof. If the Custodian is unable within 120 days of the
date of such determination to appoint a Successor Servicer, the Custodian
shall serve as Successor Servicer hereunder.
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SECTION 8.06 Access to Certain Documentation and Information Regarding the
Account Assets. The Servicer shall provide to the Custodian access to the
documentation regarding the Account Assets in such cases where the Custodian
is required in connection with the enforcement of the rights of the Master
Custodial Certificateholders, or by applicable statutes or regulations to
review such documenta tion, such access being afforded without charge but
only (a) upon reasonable request, (b) during normal business hours, (c)
subject to the Servicer's normal security and confidentiality procedures and
(d) at offices designated by the Servicer. Nothing in this Section 8.06 shall
derogate from the obligation of the Seller, the Custodian or the Servicer to
observe any applicable law prohibiting disclosure of information regarding
the Dealers and the failure of the Servicer to provide access as provided in
this Section 8.06 as a result of such obligation shall not constitute a
breach of this Section 8.06.
SECTION 8.07 Delegation of Duties. Subject to Section 3.01, in the ordinary
course of business, the Servicer may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in accordance with
the Floorplan Financing Guidelines and this Agreement. The Servicer shall
give prompt written notice of any such delegation of a material function to
the Custodian, the Rating Agencies, any Agent and any Enhancement Providers.
Such delegation shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.05 and the Rating Agency
Condition shall have been satisfied with respect to such delegation prior to
such delegation.
SECTION 8.08 Examination of Records. The Seller and the Servicer shall
indicate generally in its computer files or other records that the
Receivables forming part of the Account Assets have been Transferred to the
Custodian pursuant to this Agreement for the benefit of the Master Custodial
Certificateholders and any Enhancement Providers. The Seller and the
Servicer shall, prior to the sale or transfer to a third party of any
receivable held in its custody, examine its computer and other records to
determine that such receivable is not a Receivable.
SECTION 8.09 Limitation of Authority. On original issuance and on each
transfer of a Master Custodial Certificate, the purchasing Master Custodial
Certificateholder shall thereby be deemed to have agreed to the appointment
by the Custodian of the Servicer (and any Successor Servicer) to act on
behalf of such Master Custodial Certificateholder, together with all other
Master Custodial Certificateholders, to service, collect and administer the
Purchased Property with the powers and subject to the obligations and
restrictions provided for in this Agreement. The Servicer hereby acknowledges
that its appointment under this Agreement is in the capacity of an agent of
an independent status acting in the ordinary course of its business and that
it will not exercise or purport to exercise any general authority to
conclude, enter into or vary contracts in the name of or on behalf of the
Master Custodial Certificateholders or any one or more of them.
ARTICLE IX
Early Amortization Events
SECTION 9.01 Early Amortization Events. If any one of the following events
shall occur:
(a) a failure by the Seller to Transfer Account Assets
arising under Additional Accounts to the Custodian within
five Business Days after the day on which it is required to
Transfer such Account Assets pursuant to this Agreement or
a failure of the Seller to deliver duly executed
Assignments within two Business Days after the day on which
it is required to do so under this Agreement; provided,
however, that an Early Amortization Event occurring under
this Section 9.01(a) shall be deemed no longer to exist at
the end of the first Collection Period with respect to
which Account Assets would no longer be
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required to be transferred to the Custodian pursuant to
Section 2.05(a) to the extent contemplated by clause (c) of
the definition of Early Amortization Period;
(b) any of CCL, the Seller or the Servicer ceases to carry
on its businesses or commits any act of bankruptcy,
including the filing, by or against any of them, of notice
of intention to make any proposal for the benefit of some
or all of its creditors under applicable bankruptcy or
insolvency law, filing an assignment in bankruptcy in
respect of itself, or procuring a judgment or order
ordering a reorganization, arrangement or composition of or
with respect to any of its debts or obligations; or any of
CCL, the Seller or the Servicer shall appoint, or consent
to the appointment of, a custodian, receiver, liquidator,
trustee, assignee, sequestrator or other similar official
in bankruptcy or insolvency of it or of any substantial
part of its property (whether or not pursuant to a court
order); or any of CCL, the Seller or the Servicer shall
make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally
as they become due;
(c) a petition in bankruptcy shall have been filed against
CCL, the Seller or the Servicer which is not being disputed
or any receiving order or interim receiving order shall
have been made under any bankruptcy or insolvency laws; or
a final order by a court having jurisdiction in the
premises shall have been made relating to reorganization,
arrangement, adjustment or composition of CCL, the Seller
or the Servicer under any such law; or a decree or order of
a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in
bankruptcy or insolvency of CCL, the Seller or the Servicer
or of any substantial part of the property of any of them,
or for the winding up or liquidation of the affairs of any
of them, shall have been entered, and such decree or order
shall have remained in force undischarged or unstayed for a
period of 120 days;
(d) either CFC or Chrysler ceases to carry on its
businesses or commits any act of bankruptcy, including
filing or presenting a bankruptcy or similar petition in
respect of itself, or procuring a judgment or order
ordering a reorganization, arrangement or composition of or
with respect to any of its debts or obligations; or either
CFC or Chrysler shall appoint, or consent to the
appointment of, a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in
bankruptcy or insolvency of it or of any substantial part
of its property; or either CFC or Chrysler shall make an
assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they
become due;
(e) any order for relief against either CFC or Chrysler
shall have been entered by a court having jurisdiction in
the premises under any chapter of the United States Federal
bankruptcy laws or any other applicable bankruptcy or
insolvency laws, and such order shall have continued
undischarged or unstayed for a period of 60 days; or a
decree or order by a court having jurisdiction in the
premises shall have been entered approving as properly
filed a petition seeking reorganization, arrangement,
adjustment or composition of CFC or Chrysler under any
other similar applicable United States Federal law, and
such decree or order shall have continued undischarged or
unstayed for period of 120 days; or a decree or order of a
court having jurisdiction in the premises for the appoint
ment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in
bankruptcy or insolvency of either CFC or Chrysler or of
any substantial part of its property, or for the winding up
or liquidation of its affairs, shall have been entered, and
such decree or order shall have remained in force
undischarged or unstayed for a period of
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120 days;
(f) failure on the part of the Seller or the Servicer, as
applicable, (i) to make any payment or deposit (including
any Transfer Deposit Amount or Adjustment Payment) required
by the terms of this Agreement on or before the date
occurring two Business Days after the date such payment or
deposit is required to be made herein, or (ii) with respect
to any Series, to deliver a Distribution Date Statement
within five Business Days after the day such item is due to
be delivered under this Agreement, or (iii) duly to observe
or perform in any material respect the covenant of the
Seller set forth in Sec tion 2.06(a) or (iv) duly to
observe or perform in any material respect any other
covenants or agreements of the Seller or the Servicer, as
the case may be, set forth in this Agreement, which failure
in the case of this clause (iv) continues unremedied for a
period of 45 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have
been given to the Seller by the Custodian or any
Enhancement Provider; or
(g) any representation or warranty made by the Seller in
this Agreement or any information contained in a computer
file or microfiche or written list required to be delivered
by the Seller pursuant to Section 2.01, 2.05, 2.07 or 2.08,
(i) shall prove to have been incorrect in any material
respect when made or when delivered, and shall continue to
be incorrect in any material respect for a period of 60
days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Seller by the Custodian and (ii) as a result
of such incorrectness the interests of the Holders of the
Investor Master Custodial Certificates are materially and
adversely affected; provided, however, that an Early
Amortization Event shall not be deemed to have occurred
under this paragraph if the Seller has repurchased the
related Account Assets or all Account Assets, if
applicable, during such period in accordance with the
provisions of this Agreement;
then, subject to applicable law, and after the applicable grace period, if
any, an amortization event (an "Early Amortization Event") shall occur
without any notice or other action on the part of the Custodian, any Agent,
the Master Custodial Certificateholders or any Enhancement Provider,
immediately upon the occurrence of such event.
SECTION 9.02 Cessation of Transfer of Principal Receivables Upon Occurrence
of Insolvency Event. Upon the occurrence of an Insolvency Event with respect
to CCL or the Seller, the Seller shall immediately cease to Transfer
Principal Receivables (and Non-Principal Receivables accrued in respect of
such Principal Receivables) to the Custodian and shall promptly give notice
to the Custodian of such Insolvency Event. Notwithstanding any cessation of
the Transfer to the Custodian of additional Principal Receivables, Principal
Receivables Transferred to the Custodian prior to the occurrence of such
Insolvency Event and Collections of such Principal Receivables and
Non-Principal Receivables whenever created or accrued in respect of such
Principal Receivables, shall continue to be part of the Purchased Property.
ARTICLE X
Service Defaults
SECTION 10.01 Service Defaults. If any one of the following events (a
"Service Default") shall occur and be continuing with respect to the
Servicer:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or to give
notice to the Custodian to make such payment, transfer or
deposit or
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to give notice to the Custodian as to any action to be
taken under any Enhancement Agreement on or before the date
occurring five days after the date such payment, transfer
or deposit or such instruction or notice is required to be
made or given, as the case may be, under the terms of this
Agreement;
(b) failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer
set forth in this Agreement which has a material adverse
effect on the Investor Master Custodial Certificateholders
of any Series and which continues unremedied for a period
of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Servicer by the Custodian; or the Servicer
shall delegate its duties under this Agreement, except as
permitted by Sections 3.01 and 8.07;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to have
been incorrect when made, which has a material adverse
effect on the rights of the Investor Master Custodial
Certificateholders of any Series and which material adverse
effect continues for a period of 60 days after the date on
which written notice thereof, requiring the same to be
remedied, shall have been given to the Servicer by the
Custodian;
(d) an Insolvency Event shall occur with respect to the
Servicer;
then, in the event of any Service Default, so long as the Service Default
shall not have been remedied, the Custodian, by notice then given in writing
to the Servicer (a "Termination Notice"), may, subject to the restrictions
contained in the BIA, terminate all but not less than all of the rights and
obligations (other than its obligations that have accrued up to the time of
such termination) of the Servicer as Servicer under this Agreement and in and
to the Account Assets. After receipt by the Servicer of a Termination Notice,
and on the date that a Successor Servicer shall have been appointed by the
Custodian pursuant to Section 10.02, all authority and power of the Servicer
under this Agreement shall pass to and be vested in a Successor Servicer (a
"Service Transfer") and, without limitation, the Custodian is hereby
authorized and empowered by the Servicer (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments,
and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such Service Transfer. The Seller and the Servicer
agree to cooperate with the Custodian and such Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer
to conduct servicing hereunder, including the transfer to such Successor
Servicer of all authority of the Servicer to service the Account Assets
provided for under this Agreement, including all authority over all
Collections which shall on the date of transfer be held by the Servicer for
deposit, or which have been deposited by the Servicer, in the Collection
Account or any Series Account, or which shall thereafter be received with
respect to the Account Assets, and in assisting the Successor Servicer. The
Servicer shall promptly transfer its electronic records relating to the
Account Assets to the Successor Servicer in such electronic or machine
readable form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Account Assets
(the "Related Records") in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.01 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 10.01(a) for a
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period of 10 Business Days after the grace period specified therein or under
Section 10.01(b) or (c) for a period of 60 Business Days after the grace
specified therein, shall not constitute a Service Default if such delay or
failure could not be prevented by the exercise of reasonable diligence by the
Servicer or such delay or failure was caused by an act of God or the Queen's
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its respective obligations in
a timely manner in accordance with the terms of this Agreement and the
Servicer shall provide the Custodian, any Agent, any Enhancement Providers,
the Seller and the Master Custodial Certificateholders with an Officer's
Certificate giving prompt notice of such failure or delay by it, together
with a description of its efforts so to perform its obligations. The Servicer
shall immediately notify the Custodian in writing of any Service Default.
SECTION 10.02 Custodian to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.01, the Servicer
shall continue to perform all servicing functions under
this Agreement until the date specified in the Termination
Notice or otherwise specified by the Custodian in writing
or, if no such date is specified in such Termination
Notice, or otherwise specified by the Custodian, until a
date mutually agreed upon by the Servicer and Custodian.
The Custodian shall as promptly as possible after the
giving of a Termination Notice appoint an Eligible Servicer
as a successor servicer (the "Successor Servicer"), subject
to the consent of any Enhancement Providers and any Agent,
which consent shall not be unreasonably withheld, and such
Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Custodian.
In the event that a Successor Servicer has not been
appointed or has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Custodian
without further action shall automatically be appointed the
Successor Servicer. The Custodian may delegate any of its
servicing obligations to an Affiliate or agent in
accordance with Sections 3.01 and 8.07. Notwithstanding the
above, the Custodian shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint
any established institution having a net worth of not less
than $50,000,000. The Custodian shall immediately give
notice to the Rating Agencies, any Enhancement Providers,
any Agent and the Master Custodial Certificateholders upon
the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer with respect
to servicing functions under this Agreement and shall be
subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and
provisions hereof (except that the Successor Servicer shall
not be liable for any liabilities incurred by the
predecessor Servicer), and all references in this Agreement
to the Servicer shall be deemed to refer to the Successor
Servicer.
(c) In connection with any Termination Notice, the
Custodian will review any bids which it obtains from
Eligible Servicers and shall be permitted to appoint any
Eligible Servicer submitting such a bid as a Successor
Servicer for servicing compensation not in excess of the
Servicing Fee (unless all such bids exceed the Servicing
Fee); provided, however, that the Seller shall be
responsible for payment of the Seller's portion of the
Servicing Fee as determined pursuant to this Agreement and
all other amounts in excess of the Investors' Servicing
Fee, and that no monthly servicing compensation paid out of
Collections shall be in excess of the Investors' Servicing
Fee. The Holders of the Seller's Master Custodial
Certificates agree that if CCCL (or any Successor Servicer)
is terminated as Servicer hereunder, the portion of
Collections to be paid to the Seller shall be reduced
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by an amount sufficient to pay Seller's share of the
compensation of the Successor Servicer to the extent such
amount is not otherwise paid by the Seller.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and
terminate upon termination of the custodial arrangements
pursuant to Section 12.01, and shall pass to and be vested
in the Seller and, without limitation, the Seller is hereby
authorized and empowered to execute and deliver, on behalf
of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of
servicing rights. The Successor Servicer agrees to
cooperate with the Seller in effecting the termination of
the responsibilities and rights of the Successor Servicer
to conduct servicing of the Account Assets. The Successor
Servicer shall transfer its electronic records relating to
the Account Assets to the Seller in such electronic or
machine readable form as the Seller may reasonably request
and shall transfer all other records, correspondence and
documents to the Seller in the manner and at such times as
the Seller shall reasonably request. To the extent that
compliance with this Section 10.02 shall require the Succes
sor Servicer to disclose to the Seller information of any
kind which the Successor Servicer deems to be confidential,
the Seller shall be required to enter into such customary
licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
ARTICLE XI
The Custodian
SECTION 11.01 Duties of Custodian.
(a) The Custodian, prior to the occurrence of a Service
Default of which it has knowledge and after the curing of
all Service Defaults which may have occurred, undertakes to
perform such duties and only such duties as are
specifically set forth in this Agreement. If a Service
Default to the knowledge of the Custodian has occurred
(which has not been cured or waived), the Custodian shall
exercise such of the, authority, rights and powers that it
has under this Agreement and use the same degree of care
and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of
that person's own affairs.
(b) The Custodian, upon receipt of all resolutions,
certificates, statements, opinions, Opinions of Counsel,
reports, documents, orders or other instruments furnished
to the Custodian which are specifically required to be
furnished pursuant to any provision of this Agreement,
shall examine them to determine whether they substantially
conform in form to the requirements of this Agreement. The
Custodian shall provide to the Master Custodial
Certificateholders a copy of all notices that it receives
from, or gives to, the other parties to this Agreement.
(c) Subject to Section 11.01(a), no provision of this
Agreement shall be construed to relieve the Custodian from
liability for its own grossly negligent action, its own
grossly negligent failure to act or its own willful
misconduct; provided, however, that:
(i) the Custodian shall not be personally
liable for an error of judgment made in
good faith by an officer, employee or
agent of the Custodian, unless it shall
be proved that the Custodian was grossly
negligent in ascertaining
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the pertinent facts; and
(ii) the Custodian shall not be charged with
knowledge of any fact relevant to the
performance of its duties hereunder or
under any Supplement, including knowledge
of an Early Amortization Event, or of a
default or violation of this Agreement or
any Supplement by either the Seller or
the Servicer, including a Service Default
or the failure by the Servicer to comply
with the obligations of the Servicer
referred to in Sec tion 10.01(a) and (b),
unless a Responsible Officer of the
Custodian obtains actual knowledge of
such fact, default, violation or failure.
(d) The Custodian shall not be required to expend or risk
its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the
exercise of any of its authority, rights or powers, if
there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event
require the Custodian to perform, or be responsible for the
manner of performance of, any obligations of the Servicer
under this Agreement except during such time, if any, as
the Custodian shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer
in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Custodian shall take no action reasonably
likely to impair the interests held by the Custodian in any
Account Asset now existing or hereafter created or to
impair the value of any Account Asset now existing or
hereafter created.
(f) Except as expressly provided in this Agreement, the
Custodian shall have no power or authority to vary the
Purchased Property or, in particular the power or authority
to (i) accept any substitute obligation for a Receivable
initially assigned to the Purchased Property under Section
2.01 or 2.05, (ii) add any other investment, obligation or
security to the Purchased Property or (iii) withdraw from
the Purchased Property any Account Asset.
(g) In the event that the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the
Transfer Agent and Registrar, as the case may be, under
this Agreement, the Custodian shall be obligated promptly
upon its actual knowledge thereof to perform such
obligation, duty or agreement in the manner so required.
(h) If the Seller has agreed to Transfer or has Transferred
any of its wholesale receivables (other than the
Receivables) to another Person, the Custodian, acting in
its capacity as agent for the Holders from time to time of
Master Custodial Certificates, will enter into such
co-ownership agreements and inter-creditor agreements with
such other Person relating to such receivables as are
necessary to identify separately the ownership rights of
the Custodian and such other Person in the Seller's
wholesale receivables; provided, however, that the
Custodian shall not enter into any co-ownership agreement
or inter-creditor agreement which could adversely affect
the interests of the Investor Master Custodial
Certificateholders or the Custodian and, upon the request
of the Custodian, the Seller will deliver an Opinion of
Counsel on any matters relating to such co-ownership
agreement or inter-creditor agreement, reasonably requested
by the Custodian.
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(i) Notwithstanding any other provision contained herein,
the Custodian is not acting as, and shall not be deemed to
be, a fiduciary, bailee or agent for any Enhance ment
Provider in its capacity as such, and the Custodian's sole
responsibility with respect to said parties shall be to
perform those duties with respect to said parties as are
specific ally set forth herein and no implied duties or
obligations shall be read into this Agreement against the
Custodian with respect to any such party.
(j) The Custodian hereby acknowledges that its appointment
by the Master Custodial Certificateholders as agent
pursuant to this Agreement and any agreements pertaining to
the purchase and transfer of Master Custodial Certificates,
is and is intended to be a limited appointment in the
capacity of an agent of independent status acting in the
ordinary course of its business. The Custodian acknowledges
that its role in the transactions herein provided for is
limited to the functions specified in this Agreement and,
unless expressly stated to the contrary or otherwise
required by the context, all references in this Agreement
to the Custodian shall mean the Custodian acting as agent
for and on behalf of the Master Custodial
Certificateholders. The Custodian acknowledges that it does
not have and agrees that it will not exercise or purport to
exercise any general power or authority to conclude, enter
into or vary contracts in the name of or on behalf of
Master Custodial Certificateholders or any one or more of
them.
SECTION 11.02 Certain Matters Affecting the Custodian. Except as otherwise
provided in Section 11.01, but notwithstanding anything (other than Section
11.01) to the contrary contained in this Agreement or any Supplement:
(a) the Custodian may rely on and shall be protected in
acting on, or in refraining from acting in accordance with,
any resolution, Officer's Certificate, certificate of
auditors, direction or calculation made by the Servicer or
the Seller on any other certificate, statement, instrument,
opinion, Opinion of Counsel, report, notice, request,
direction, consent, order, appraisal, bond or other paper
or document believed by the Custodian to be genuine and to
have been signed or presented to it pursuant to this
Agreement by the proper party or parties;
(b) the Custodian may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(c) the Custodian shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation hereunder
or in relation hereto, at the request, order or direction
of any of the Master Custodial Certificateholders,
pursuant to the provisions of this Agreement, unless such
Master Custodial Certificateholders shall have offered to
the Custodian reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred
therein or thereby which is reasonably satisfactory to the
Custodian;
(d) the Custodian shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it under this Agreement;
(e) the Custodian shall not be bound to verify the accuracy
or completeness of or to make any investigation whatsoever
into the facts of matters stated in any resolution,
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certificate, statement, instrument, opinion, Opinion of
Counsel, report, notice, request, direction, calculation,
consent, order, approval, bond or other paper or document;
(f) the Custodian may exercise the powers hereunder or
perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the
Custodian shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder;
(g) except as may be required by Section 11.01(b) hereof,
the Custodian shall not be required to make any initial or
periodic examination of any documents or records related to
the Account Assets for the purpose of establishing the
presence or absence of defects, the compliance by the
Seller or the Servicer with its representations and
warranties or for any other purpose; and
(h) subject to Section 11.16(b), the Custodian shall not be
liable in its individual capacity for any action taken,
suffered or committed by it if such action was taken in
reliance upon and pursuant to an instruction provided to it
by Master Custodial Certificateholders pursuant to Section
6.08 or Section 11.10. In so acting, the Custodian shall
not be required to inquire as to the beneficial owner of
Master Custodial Certificates in reliance upon such
instruction.
SECTION 11.03 Custodian Not Liable for Recitals in Master Custodial
Certificates. The Custodian assumes no responsibility for the correctness of
the recitals contained herein and in the Master Custodial Certificates (other
than the certificate of authentication on the Master Custodial Certificates).
Except as set forth in Section 11.14, the Custodian makes no representations
as to the validity or sufficiency of this Agreement or of the Master
Custodial Certificates (other than the due execution by it and the
certificate of authentication on the Master Custodial Certificates) or of any
Account Asset. The Custodian shall not be accountable for the use or
application by the Seller of any of the Master Custodial Certificates or of
the proceeds of such Master Custodial Certificates, or for the use or
application of any funds paid to the Seller in respect of the Account Assets
or deposited in or withdrawn from the Collection Account or any Series
Account.
SECTION 11.04 Custodian May Own Master Custodial Certificates. The Custodian
in its individual or any other capacity may become the owner or pledgee of
Investor Master Custodial Certificates with the same rights as it would have
if it were not the Custodian.
SECTION 11.05 The Servicer to Pay Custodian's Fees and Expenses. The Servicer
covenants and agrees to pay to the Custodian from time to time, and the
Custodian shall be entitled to receive, reasonable compensation for all
services rendered by it in the exercise and performance of any of the powers
and duties hereunder of the Custodian, and, subject to Section 8.04, the
Servicer will pay or reimburse the Custodian upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Custodian in the exercise and performance of any of its powers and duties
hereunder (including the reasonable fees and expenses of its agents and any
co-custodian) except any such expense, disbursement or advance as may arise
from its gross negligence or bad faith and except as provided in the second
following sentence. The Servicer's covenant to pay the expenses,
disbursements and advances provided for in the preceding sentence shall
survive the termination of this Agreement. If the Custodian is appointed
Successor Servicer pursuant to Section 10.02, the provisions of this Sec tion
11.05 shall not apply to expenses, disbursements and advances made or
incurred by the Custodian in its capacity as Successor Servicer, which shall
be paid for out of the Servicing Fee, except for Additional Custodial
Servicing Expenses, if any, which shall be paid for as set forth in Section
3.02.
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SECTION 11.06 Eligibility Requirements for Custodian. The Custodian hereunder
shall at all times be a trust company, Schedule I chartered bank or insurance
company organized and doing business under the laws of Canada or any Province
thereof authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or provincial authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then, for the purpose of this Section 11.06, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Custodian shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Custodian shall resign immediately in
the manner and with the effect specified in Section 11.07.
SECTION 11.07 Resignation or Removal of Custodian.
(a) Subject to the provisions of Section 11.07(c), the
Custodian may at any time resign and be discharged from its
obligations and duties hereunder by giving written notice
thereof to the Master Custodial Certificateholders, Seller
and the Servicer. Upon receiving such notice of
resignation, the Master Custodial Certificateholders shall
promptly appoint a successor custodian by written
instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy
to the successor custodian. If no successor custodian shall
have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the
resigning Custodian or the Seller may petition any court of
competent jurisdiction for the appointment of a successor
custodian.
(b) If at any time the Custodian shall cease to be eligible
in accordance with the provisions of Section 11.06 hereof
and shall fail to resign after written request therefor by
the Servicer or the Master Custodial Certificateholders, or
if at any time the Custodian shall be legally unable to
act, or commits any act of bankruptcy, including the making
of an assignment or filing of notice of intention to make
any proposal for the benefit of some or all of its
creditors under applicable bankruptcy or insolvency law, or
if a receiver of the Custodian or of its property shall be
appointed, or any public officer shall take charge or
control of the Custodian or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then the Servicer or the Master Custodial
Certificateholders may, remove the Custodian and promptly
appoint a successor custodian by written instrument, in
duplicate, one copy of which instrument shall be delivered
to the Custodian so removed and one copy to the successor
custodian.
(c) At any time the Seller or the Servicer may, with the
consent of the Holders of Investor Master Custodial
Certificates evidencing not less than 66 2/3% of the
aggregate unpaid principal amount of the Investor Master
Custodial Certificates of each Series, appoint a successor
custodian which is eligible in accordance with the
provisions of Section 11.06 hereof by giving at least 60
days written notice of intention to appoint a successor
custodian to the Custodian, any Agent and each Rating
Agency.
(d) Any resignation or removal of the Custodian and
appointment of successor custodian pursuant to any of the
provisions of this Section 11.07 shall not become effective
until acceptance of appointment by the successor custodian
as provided in Section 11.08 hereof.
SECTION 11.08 Successor Custodian.
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(a) Any successor custodian appointed as provided in
Section 11.07 hereof shall execute, acknowledge and deliver
to the Seller and to its predecessor Custodian an
instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor
Custodian shall become effective and such successor
custodian shall have all the authority, rights, powers,
duties and obligations of its predecessor hereunder, with
like effect as if originally named as Custodian herein. The
predecessor Custodian shall execute and deliver to the
successor custodian an Assignment of the Purchased Property
so as to effectively Transfer to the successor Custodian,
as agent for and on behalf of the Master Custodial
Certificateholders, the right, title and interest of the
predecessor Custodian in the Purchased Property and shall
deliver to the successor custodian all documents or copies
thereof, at the expense of the Servicer, and statements
held by it hereunder; and the Seller and the predecessor
Custodian shall execute and deliver such instruments and do
such other things as may reasonably be required for the
successor custodian to have all such authority, rights,
power, duties and obligations. The Servicer shall
immediately give notice to each Rating Agency and the
Master Custodial Certificateholders upon the appointment of
a successor custodian.
(b) No successor custodian shall accept appointment as
provided in this Sec tion 11.08 unless at the time of such
acceptance such successor custodian shall be eligible under
the provisions of Section 11.06 hereof and legally able to
act as such.
SECTION 11.09 Merger, Amalgamation or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated or amalgamated, or any Person resulting from any merger,
conversion, amalgamation or consolidation to which the Custodian shall be a
party, shall be the successor of the Custodian hereunder, provided such
corporation shall be eligible under the provisions of Section 11.06 hereof
and legally able to act as such, without the execu tion or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 11.10 Instructions from Investor Master Custodial Certificateholders.
Whenever the Custodian is permitted to take, or refrain from taking, any
action under this Agreement or any Supplement, the Custodian may seek
instructions relating to such action or inaction from the Investor Master
Custodial Certificateholders of all outstanding Series or the applicable
Series, as the case may be, and the Custodian shall, subject to the terms of
this Agreement, be required to take, or refrain from taking, any such action,
as directed by the Holders of Investor Master Custodial Certificates
evidencing a majority of the aggregate unpaid principal amount of Investor
Master Custodial Certificates of all outstanding Series or the applicable
Series, as the case may be; provided, however, in the event that the delay
resulting from the obtaining of such instructions would be likely to
adversely affect in any material respect the interests of such Investor
Master Custodial Certificateholders, the Custodian shall act or refrain from
acting in such manner as a prudent person would under the circumstances in
the conduct of such person's own affairs, pending the receipt of such
instructions.
SECTION 11.11 Tax Returns. The Custodian, in accordance with the terms of the
Supplements, shall prepare or shall cause to be prepared all tax information
required to be distributed to the Investor Master Custodial
Certificateholders. The Custodian will distribute or cause to be distributed
such information to the Investor Master Custodial Certificateholders. The
Servicer, upon request, will furnish the Custodian with all such information
known to the Servicer as may be reasonably required in connection with the
distribution of tax information to the Investor Master Custodial
Certificateholders.
SECTION 11.12 Custodian May Enforce Claims Without Possession of Master
Custodial Certificates. All rights of action and claims under this Agreement
or the Master Custodial Certificates
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may be prosecuted and enforced by the Custodian, as agent for and on behalf
of the Holders from time to time of Master Custodial Certificates, without
the possession of any of the Master Custodial Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Custodian shall be brought in the name of the Master
Custodial Certificateholders. Any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Custodian, its agents and counsel, be for the ratable benefit
of the Master Custodial Certificateholders in respect of which such judgment
has been obtained.
SECTION 11.13 Suits for Enforcement. If a Service Default shall occur and be
continuing, the Custodian may, subject to the provisions of Section 10.01,
proceed to protect and enforce its rights and the rights of the Master
Custodial Certificateholders under this Agreement by suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as the Custodian,
being advised by counsel, shall deem most effectual to protect and enforce
any of the rights of the Custodian or the Master Custodial
Certificateholders. Nothing herein contained shall be deemed to authorize the
Custodian to authorize or consent to or accept or adopt on behalf of any
Master Custodial Certificateholder any plan of reorganization, arrangement,
adjustment or composition affecting the Master Custodial Certificates or the
rights of any Holder thereof, or authorize the Custodian to vote in respect
of the claim of any Master Custodial Certificateholder in any such
proceeding.
SECTION 11.14 Representations, Warranties and Covenants of Custodian. The
Custodian represents and warrants that:
(i) the Custodian is a trust company
organized, existing and in good standing
under the laws of the Province of Quebec;
(ii) the Custodian has full power, authority
and right to execute, deliver and perform
this Agreement and each Supplement, and
has taken all necessary action to
authorize the execution, delivery and
performance by it of this Agreement and
each Supplement; and
(iii) this Agreement and each Supplement has
been duly executed and delivered by the
Custodian and this Agreement and each
Supplement constitutes a legal, valid and
binding obligation of the Custodian
enforceable against the Custodian in
accordance with its terms, except as such
enforceability and the legality thereof
may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws, now or hereafter in
effect, affecting the enforcement of
creditors' rights in general and to the
extent such laws render contractual
provisions ineffective, and except as
such enforceability may be limited by
general principles of equity.
SECTION 11.15 Maintenance of Office or Agency. The Custodian will maintain at
its expense in the City of Toronto, an office or offices or agency or
agencies where notices and demands to or upon the Custodian in respect of the
Master Custodial Certificates and this Agreement may be served. The Custodian
initially designates its Custodial Trust Office as its office for such
purposes at c/o CIBC Mellon Trust Company, 393 University Avenue, 5th Floor,
Toronto, Ontario M5G 2M7 as its office for such purpose. The Custodian will
give prompt written notice to the Servicer and to Holders of the Master
Custodial Certificates of any change in the location of the Certificate
Register or any such office or agency.
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SECTION 11.16 Payment from Purchased Property.
(a) Each Master Custodial Certificateholder, by its
acceptance of such Master Custodial Certificate, and each
Enhancement Provider, acknowledges that the Master
Custodial Certificates are issued without recourse to the
Custodian and agrees that it will look solely to the
Purchased Property to the extent available for distribution
to it for any amounts payable, or for the performance of
any covenants or obligations, under this Agreement or such
Master Custodial Certificate, except as otherwise provided
in Section 11.16(b).
(b) The Master Custodial Certificateholders and each
Enhancement Provider shall have full recourse to the
property and assets of the Custodian in its individual
capacity, and the Custodian shall be personally liable to
the full extent of its undertaking and such property and
assets, if it is in breach of its obligations or its
representations hereunder, including under Section 8.05 and
Section 10.02(a), but only to the extent that a court of
competent jurisdiction shall have determined (after the
expiry of all rights of appeal) that the realizable value
to the Master Custodial Certificateholders and Enhancement
Providers of the Purchased Property shall have been
decreased or otherwise prejudiced as a result of any such
breach and shall have quantified the amount of such
decrease or prejudice.
ARTICLE XII
Termination
SECTION 12.01 Termination of Custodial Arrangement. The Custodial Arrangement
created hereby and the respective obligations and responsibilities of the
Seller, the Servicer and the Custodian created hereby (other than the
obligation of the Custodian to make payments to Investor Master Custodial
Certificateholders as hereafter set forth) shall terminate, except with
respect to the duties described in Sections 7.03, 8.04 and 12.02(b), on the
day following the Distribution Date on which the Invested Amount for all
Series is zero and no other amounts are payable to Investor Master Custodial
Certificateholders pursuant to any Supplement (the "Custodial Termination
Date"). The Servicer will give the Rating Agencies prompt notice of the
termination of the custodial arrangement created hereby.
SECTION 12.02 Final Distribution.
(a) The Servicer shall give the Custodian at least 45 days
prior notice of the Distribution Date on which the Investor
Master Custodial Certificateholders of any Series or Class
may surrender their Investor Master Custodial Certificates
for payment, pursuant to the provisions of the related
Supplement, of the final distribution on and cancellation
of such Investor Master Custodial Certificates (or, in the
event of a final distribution resulting from the
application of Section 2.03 or 9.01, notice of such Distri
bution Date promptly after Servicer has determined that a
final distribution will occur, if such determination is
made less than 45 days prior to such Distribution Date).
Such notice shall be accompanied by an Officer's
Certificate setting forth the information specified in
Section 3.05 covering the period during the then current
calendar year through the date of such notice. Not later
than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable
to Investor Master Custodial Certificateholders, the
Custodian shall provide notice to Investor Master Custodial
Certificateholders of such Series or Class specifying (i)
the date upon which final payment of such Series or Class
will be made upon presentation and surrender of Investor
Master Custodial Certificates of
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such Series or Class at the office or offices therein
designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such
payment date is not applicable, payments being made, unless
the Custodian on the direction of the Servicer indicates
otherwise in such notice, only upon presentation and
surrender of such Investor Master Custodial Certificates at
the office or offices therein specified. The Custodian
shall give such notice to the Transfer Agent and Registrar
and the Rating Agencies at the time such notice is given to
Investor Master Custodial Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Master Custodial Certificateholders of any Series or Class
(or the termination of the Custodial Arrangement), except
as otherwise provided in this paragraph, all funds then on
deposit in the Collection Account and any Series Account
allocated to such Investor Master Custodial Certificate
holders shall continue to be held in custody by the
Custodian, as agent for and on behalf of such Investor
Master Custodial Certificateholders, and, unless the
Custodian has indicated otherwise as provided in Section
12.02(a)(iii), the Custodian shall pay such funds to such
Investor Master Custodial Certificateholders upon surrender
of their Investor Master Custodial Certificates (and any
excess shall be paid in accordance with the terms of any
Enhancement Agreement or to the Seller). In the event that
all such Investor Master Custodial Certificateholders shall
not surrender their Investor Master Custodial Certificates
for cancellation within six months after the date specified
in the notice from the Custodian described in paragraph
(a), the Custodian shall give a second notice to the
remaining such Investor Master Custodial Certificateholders
to surrender their Investor Master Custodial Certificates
for cancelation and receive the final distribution with
respect thereto. If within one year after the second notice
all such Investor Master Custodial Certificates shall not
have been surrendered for cancelation, the Custodian may
take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining such Investor
Master Custodial Certificateholders concerning surrender of
their Investor Master Custodial Certificates, and the cost
thereof shall be paid out of the funds in the Collection
Account or any Series Account held for the benefit of such
Investor Master Custodial Certificateholders. Subject to
applicable law, the Custodian shall pay to the Seller any
monies held by it for the payment of principal or interest
that remain unclaimed for six years after the date
specified in the notice from the Custodian described in
Section 12.02(a). After payment to the Seller, Investor
Master Custodial Certificateholders entitled to the money
must look to the Seller for payment thereof without
interest up to such time as the right to proceed against
the Seller for recovery of such money has become barred
under the laws of the Province of Ontario.
(c) In the event that the Invested Amount with respect to
any Series is greater than zero on its Termination Date
(after giving effect to deposits and distributions
otherwise to be made on such Termination Date), the
Custodian, will use its best efforts to sell or cause to be
sold on such Termination Date Account Assets (or interests
therein) in an amount equal to the lesser of (i) the sum of
(x) the Invested Amount with respect to such Series on such
Termination Date (after giving effect to such deposits and
distributions) and (y) the Available Subordinated Amount
with respect to such Series on the preceding Determination
Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date following such Determination Date) and
(ii) such Series' Series Allocation Percentage (for the
Collection Period in which such Termination Date occurs) of
Account Assets on such Termination Date. The proceeds (the
"Termination Proceeds") from such sale shall be immediately
deposited into the Collection Account to be held by the
Custodian for the benefit of the Investor Master Custodial
Certificateholders of such Series. The Termination Proceeds
shall be allocated
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and distributed to the Investor Master Custodial
Certificateholders of such Series in accordance with the
terms of the applicable Supplement.
SECTION 12.03 Seller's Termination Rights. Upon the termination of the
Custodial Arrangement pursuant to Section 12.01 and the surrender of the
Seller's Master Custodial Certificates, the Custodian, shall Transfer to the
Seller or its designee, without recourse, representation or warranty, all
right, title and interest of the Custodian and the Master Custodial
Certificateholders in the Purchased Property and all proceeds thereof, except
for amounts held by the Custodian pursuant to Section 12.02(b). The Custodian
shall execute and deliver such instruments of transfer and assignment, in
each case without recourse, as shall be reasonably requested by the Seller to
vest in the Seller or its designee all right, title and interest which the
Custodian and the Master Custodial Certificateholders had in all such
property.
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01 Amendment.
(a) This Agreement or any Supplement may be amended from
time to time (including in connection with the issuance of
a Supplemental Certificate) by the Servicer, the Seller and
the Custodian without the consent of any of the Master
Custodial Certificateholders, provided that such action
shall not, as evidenced by an Opinion of Counsel for the
Seller, addressed and delivered to the Custodian, adversely
affect in any material respect the interests of any
Investor Master Custodial Certificateholder.
Notwithstanding anything contained herein to the contrary,
the Servicer, with the consent of any Enhancement
Providers, may at any time and from time to time amend,
modify or supplement the form of Distribution Date
Statement.
(b) This Agreement or any Supplement may also be amended
from time to time (including in connection with the
issuance of a Supplemental Certificate) by the Servicer,
the Seller and the Custodian, with the consent of the
Holders of Investor Master Custodial Certificates
evidencing not less than 66-2/3% of the aggregate unpaid
principal amount of the Investor Master Custodial
Certificates of each Series which would be adversely
affected in any material respect, for the purpose of adding
any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or any Supplement
or of modifying in any manner the rights of the Master
Custodial Certificateholders; provided, however, that no
such amendment shall (i) reduce in any manner the amount of
or delay the timing of any distributions to be made to
Investor Master Custodial Certificateholders or deposits of
amounts to be so distributed or the amount available under
any Enhancement without the consent of each affected
Investor Master Custodial Certificateholder, (ii) change
the definition of or the manner of calculating the interest
of any Investor Master Custodial Certificateholder without
the consent of each affected Investor Master Custodial
Certificateholder, (iii) reduce the aforesaid percentage
required to consent to any such amendment without the
consent of each Investor Master Custodial Certificateholder
or (iv) adversely affect the rating of any Series
Securities by each Rating Agency without the consent of the
Holders of the related Investor Master Custodial
Certificates evidencing not less than 66-2/3% of the
aggregate unpaid principal amount of such Investor Master
Custodial Certificates. Any amendment to be effected
pursuant to this Section 13.01(b) shall be deemed to
materially adversely affect all outstanding Series, other
than any Series with respect to which such action shall
not, as evidenced by an Opinion of Counsel for the Seller,
addressed and delivered to the Custodian, adversely
<PAGE>
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affect in any material respect the interests of any
Investor Master Custodial Certificateholder of such Series.
The Custodian may, but shall not be obligated to, enter
into any such amendment which affects the Custodian's
rights, duties or immunities under this Agreement or
otherwise.
(c) Promptly after the execution of any such amendment or
consent (other than an amendment pursuant to paragraph
(a)), the Custodian shall furnish notification of the
substance of such amendment to each Investor Master
Custodial Certificateholder, and the Servicer shall furnish
notification of the substance of such amendment to each
Rating Agency, each Agent and each Enhancement Provider.
(d) It shall not be necessary to obtain the consent of
Investor Master Custodial Certificateholders under this
Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the
execution thereof by Investor Master Custodial
Certificateholders shall be subject to such reasonable
requirements as the Custodian may prescribe.
(e) Notwithstanding anything in this Section to the
contrary, no amendment may be made to this Agreement or any
Supplement which would adversely affect in any material
respect the interests of any Enhancement Provider without
the consent of such Enhancement Provider.
(f) Any Supplement executed in accordance with the
provisions of Section 6.03 shall not be considered an
amendment to this Agreement for the purposes of this
Section.
SECTION 13.02 Protection of Right, Title and Interest to Purchased Property.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and financing change
statements and any other necessary documents covering the
Custodian's right, title, and interest in and to the
Purchased Property to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right,
title and interest of the Custodian hereunder to all
Purchased Property. The Servicer shall deliver to the
Custodian, file stamped copies of, verification statements
or filing receipts for, any document recorded, registered
or filed as provided above, as soon as available following
such recording, registration or filing. The Seller shall
cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this
Section 13.02(a).
(b) Within 30 days after the Seller or the Servicer makes
any change in its name or corporate structure which would
require the filing of a financing change statement or other
registration document necessary to record the change of
name or corporate structure pursuant to each applicable
PPSA, the Seller shall give the Custodian and any
Agent notice of any such change and shall file such
financing statements or financing change statements or
other required registration documents and instruments as
may be necessary to continue the perfection of the
Custodian's interest in the Account Assets.
(c) The Seller and the Servicer will give the Custodian and
any Agent prompt written notice of any relocation of any
office from which it services Receivables or keeps records
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concerning the Receivables or of its chief executive office
and whether, as a result of such relocation, the applicable
provisions of any PPSA or similar legislation would require
the filing of any financing change statements and shall
file such financing change statements or other required
registration documents and instruments as may be necessary
to perfect or to continue the perfection of the Custodian's
and Master Custodial Certificateholders' interest in the
Account Assets. The Seller and the Servicer will at all
times maintain each office from which it services Account
Assets within Canada.
(d) The Servicer will deliver to the Custodian, any Agent
and any Enhancement Provider: (i) upon the execution and
delivery of each amendment of this Agreement or any
Supplement, an Opinion of Counsel to the effect specified
in Exhibit D1; (ii) on each Addition Date on which any
Additional Accounts are to be included as the Accounts
pursuant to Section 2.05(a) or (b), an Opinion of Counsel
substantially in the form of Exhibit D2; and (iii) on or
before April 30 of each year, beginning with April 30,
1993, an Opinion of Counsel substantially in the form of
Exhibit D2.
SECTION 13.03 Limitation on Rights of Master Custodial Certificateholders.
(a) The death or incapacity of any Master Custodial
Certificateholder shall not operate to terminate this
Agreement or the custodial arrangement created hereby or
rights or powers granted to the Custodian and Servicer
hereunder, nor shall such death or incapacity entitle such
Master Custodial Certificateholders' legal representatives
or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or
winding up of the custodial arrangement created hereby, nor
otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Investor Master Custodial Certificateholder shall have any
right to vote or in any manner otherwise control the
operation and management of the Purchased Property, or the
obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Master
Custodial Certificates, be construed so as to constitute
the Investor Master Custodial Certificateholders from time
to time and the Custodian as partners or members of an
association, nor shall any Investor Master Custodial
Certificateholder be under any liability to any third
person by reason of any action taken by the Seller or the
Servicer pursuant to any provision hereof.
(c) No Investor Master Custodial Certificateholder shall
have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this
Agreement or any Account Assets, unless such Investor
Master Custodial Certificateholder previously shall have
made, and unless the Holders of Investor Master Custodial
Certificates evidencing more than 50% of the aggregate
unpaid principal amount of all Investor Master Custodial
Certificates (or, with respect to any such action, suit or
proceeding that does not relate to all Series, 50% of
the aggregate unpaid principal amount of the Investor
Master Custodial Certificates of all Series to which such
action, suit or proceeding relates) shall have made, a
request to the Custodian to institute such action, suit or
proceeding, as agent for the Holders from time to time of
Master Custodial Certificates and nominee for all affected
Master Custodial Certificateholders, in its own name as
Custodian hereunder and shall have offered to the Custodian
such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or
thereby, and the Custodian, for 60 days after such request
and offer of indemnity, shall have neglected or refused to
institute any such action,
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suit or proceeding; it being understood and intended, and
being expressly covenanted by each Investor Master
Custodial Certificateholder with every other Investor
Master Custodial Certificateholder and the Custodian, that
no one or more Investor Master Custodial Certificateholders
shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Investor Master Custodial
Certificates, or to obtain or seek to obtain priority over
or preference to any other such Investor Master Custodial
Certificateholder, or to enforce any right under this
Agreement or pursuant to applicable law, including the
giving of notice to any Dealer requiring payment of any
Receivable or applying for partition of the Purchased
Property, except in the manner herein provided and for the
equal, ratable and common benefit of all Investor Master
Custodial Certificateholders except as otherwise expressly
provided in this Agreement. For the protection and
enforcement of the provisions of this Section, each and
every Investor Master Custodial Certificateholder and the
Custodian shall be entitled to such relief as can be given
either at law or in equity.
SECTION 13.04 Reserved.
SECTION 13.05 Governing Law. This Agreement shall be construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
SECTION 13.06 Notices.
(a) All demands, notices, instructions, directions and
communications (collectively , "Notices") under this
Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered at or mailed by
registered mail, return receipt requested, or transmitted
by facsimile to (i) in the case of CCCL, Suite 400, East
Tower, 2700 Matheson Boulevard East, Mississauga, Ontario
L4W 4V9, Fax: 905-629-7961, Attention: Secretary and (ii)
in the case of the Custodian, c/o CIBC Mellon Trust
Company, 393 University Avenue, 5th Floor, Toronto, Ontario
M5G 2M7, Fax: 416-813-4555, Attention: Vice President,
Corporate Trust Services; or, as to each party, at such
other address as shall be designated by such party in a
written notice to each other party.
(b) Any Notice required or permitted to be given to a
Holder of Registered Certificates shall be given by first
class mail, postage prepaid, at the address of such Holder
as shown in the Certificate Register. Any Notice so mailed
within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or
not the Investor Master Custodial Certificateholder
receives such Notice.
SECTION 13.07 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or
of the Master Custodial Certificates or rights of the Master Custodial
Certificateholders.
SECTION 13.08 Assignment. Except as otherwise expressly provided herein, this
Agreement may not be assigned by any party.
SECTION 13.09 Master Custodial Certificates Nonassessable and Fully Paid. It
is the intention of the parties to this Agreement that the Investor Master
Custodial Certificateholders shall not be personally
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liable for obligations of the Custodian or with respect to the Purchased
Property, that the undivided ownership interests as tenants in common in the
Purchased Property evidenced by the Investor Master Custodial Certificates
shall be nonassessable for any losses or expenses of the Custodian or with
respect to the Purchased Property or for any reason whatsoever and that
Investor Master Custodial Certificates upon issue and authentication thereof
by the Custodian are and shall be deemed fully paid.
SECTION 13.10 Further Assurances. The Seller and the Servicer agree to do and
perform, from time to time, any and all acts and to execute any and all
further instruments and documents required or reasonably requested by the
Custodian more fully to effect the purposes of this Agreement, including the
execution of any financing statements or financing change statements and all
similar instruments and documents.
SECTION 13.11 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Custodian or the Master Custodial
Certificateholders, any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.
SECTION 13.12 Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 13.13 Third Party Beneficiaries. This Agreement will enure to the
benefit of and be binding upon the parties hereto, the Master Custodial
Certificateholders and the Enhancement Providers and their respective
successors and permitted assigns. All rights and interests in the Purchased
Property of the Master Custodial Certificateholders and Enhancement
Providers, and of their respective successors and assigns, are held for such
Persons by the Custodian as agent for and on behalf of such Persons. Except
as otherwise expressly provided in this Agreement, no other Person will have
any right or obligation hereunder.
SECTION 13.14 Actions by Master Custodial Certificateholders. Any request,
demand, authorization, direction, Notice, consent, waiver or other act by a
Master Custodial Certificateholder shall bind such Master Custodial
Certificateholder and every subsequent holder of any Master Custodial
Certificates issued upon the registration of transfer of the Master Custodial
Certificates of such Master Custodial Certificateholder or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done
by the Custodian or the Servicer in reliance thereon, whether or not notation
of such action is made upon any such Master Custodial Certificates.
SECTION 13.15 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written
or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except by a document signed by the
parties hereto and as provided herein.
SECTION 13.16 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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IN WITNESS WHEREOF, the Seller, the Servicer and the Custodian have
caused this Amended and Restated Master Custodial and Servicing Agreement to
be duly executed by their respective officers as of the day and year first
above written.
CHRYSLER CREDIT CANADA LTD.,
Seller and Servicer,
by: "D. M. Cantwell"
--------------------------
Dennis M. Cantwell
Vice President & Treasurer
THE ROYAL TRUST COMPANY,
Custodian,
by: "R. Byrne"
--------------------------
Randy Byrne
Authorized Signatory
by: "P. Benjamin"
--------------------------
Patricia T. Benjamin
Authorized Signatory
<PAGE>
EXHIBIT A
(FORM OF FACE OF CCCL CERTIFICATE)
THIS MASTER CUSTODIAL CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS MASTER CUSTODIAL CERTIFICATE
NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXCEPTION
FROM SUCH REGISTRATION PROVISIONS.
IN ADDITION, NEITHER THIS MASTER CUSTODIAL CERTIFICATE NOR ANY
PORTION THEREOF HAS BEEN NOR WILL BE QUALIFIED FOR SALE UNDER THE SECURITIES
LAW OF CANADA OR ANY PROVINCE OR TERRITORY THEREOF AND NEITHER THIS MASTER
CUSTODIAL CERTIFICATE NOR ANY PORTION THEREOF MAY BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN CANADA OR TO, OR FOR THE ACCOUNT OF, ANY RESIDENT
OF CANADA, EXCEPT PURSUANT TO A VALID EXEMPTION FROM SUCH SECURITIES LAWS.
THIS MASTER CUSTODIAL CERTIFICATE IS NOT PERMITTED TO BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN
COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED MASTER CUSTODIAL AND
SERVICING AGREEMENT REFERRED TO HEREIN.
No. Principal Amount $ ____________________________
CCCL CERTIFICATE
THIS CERTIFICATE EVIDENCES AN UNDIVIDED OWNERSHIP INTEREST IN
CERTAIN ASSETS HELD BY THE CUSTODIAN AS AGENT FOR AND ON BEHALF
OF THE HOLDER HEREOF AND ALL OTHER HOLDERS OF MASTER CUSTODIAL
CERTIFICATES AS TENANTS IN COMMON AS PROVIDED IN THE AMENDED
AND RESTATED MASTER CUSTODIAL AND SERVICING AGREEMENT
REFERRED TO ON THE REVERSE HEREOF.
The assets so held consist primarily of wholesale (i.e., dealer
floorplan) receivables (the "Receivables") generated from time to time in the
ordinary course of business in a portfolio of revolving financing
arrangements (the "Accounts") of Chrysler Credit Canada Ltd. (the "Seller")
meeting certain eligibility criteria. This certificate (the "CCCL
Certificate") does not represent an interest in or obligation of the Seller,
Chrysler Financial Corporation or any affiliate thereof or the Custodian
except as specifically provided for in the Agreement referred to on the
reverse hereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Custodian by manual signature, this CCCL Certificate
shall not entitle the Holder to any benefit
<PAGE>
under the Amended and Restated Master Custodial and Servicing Agreement
referred to on the reverse side hereof, or be valid for any purpose.
THIS CCCL CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN
WITHOUT REFERENCE TO THEIR CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the Custodian has caused this CCCL Certificate to be
duly executed.
Dated:
THE ROYAL TRUST COMPANY,
as Custodian
by_______________________________________
Name:
Title:
by_______________________________________
Name:
Title:
CUSTODIAN'S CERTIFICATE OF AUTHENTICATION
This is the CCCL Certificate described in the within mentioned
Amended and Restated Master Custodial and Servicing Agreement.
THE ROYAL TRUST COMPANY,
as Custodian
by _______________________________________
Authorized Officer
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
______________________________________________________________________________
______________________________________________________________________________
__________________ (please print or typewrite name and address) the undivided
ownership interest in the Purchased Property (including for greater certainty
all rights and entitlements under the Agreement referred to on the reverse
hereof to the extent such rights and entitlements relate to the interest so
sold, assigned and transferred) evidenced by the within CCCL Certificate or
$_____ * principal amount thereof and hereby irrevocably constitutes and
<PAGE>
appoints _____________________________________________________________________
______________________________________________________________________________
attorney to transfer the said undivided ownership interest in the Purchased
Property evidenced by the within CCCL Certificate on the register of the
Master Custodial Certificates with full power of substitution in the
premises.
* If less than the full outstanding principal amount of the undivided
ownership interest in the Purchased Property evidenced by the within
CCCL Certificate is to be transferred, indicate in the space
provided the principal amount to be transferred.
The Transferee hereby confirms the appointment of the Custodian as
the agent of the Transferee for the purposes set out in the Agreement and the
Custodian hereby accepts the appointment as agent of the Transferee for these
purposes. The Transferee acknowledges and agrees that the sale of the
undivided ownership interest in the Purchased Property evidenced by the
Master Custodial Certificate to be acquired by the Transferee has not been
qualified by a prospectus, and represents and warrants that the sale by the
Transferor of the undivided ownership interest in the Purchased Property
evidenced by the Master Custodial Certificate and the purchase by the
Transferee of the undivided ownership interest in the Purchased Property
evidenced by the said Certificate, has complied with all applicable
securities laws, regulations and policies of applicable securities regulatory
authorities.
DATED _____________ DATED ____________ DATED ____________
Custodian
by __________________ _______________________ _______________________
Signature of Transferee Signature of Transferor
(Form of Registration Panel)
(No writing hereon except by the Custodian)
Date of In Whose Name
Registration Registered Custodian
- ------------ ------------- ---------
<PAGE>
FORM OF REVERSE OF CCCL CERTIFICATE
This CCCL Certificate is issued under and is subject to the terms,
provisions and conditions of the Amended and Restated Master Custodial and
Servicing Agreement dated as of December 16, 1997 (as amended and
supplemented, the "Agreement"), by and among Chrysler Credit Canada Ltd., as
Seller and Servicer, and The Royal Trust Company, as Custodian (the
"Custodian"). The assets held by the Custodian as agent for and on behalf of
the Certificateholders pursuant to the Agreement (the "Purchased Property")
will include (a) all of the Seller's right, title and interest in, to and
under the Receivables in each Account and all Collateral Security with
respect thereto owned by the Seller at the close of business on the Cut-Off
Date, in the case of the Initial Accounts, and on the applicable Additional
Cut-Off Date, in the case of Additional Accounts, and all monies due or to
become due and all amounts received with respect thereto and all proceeds
(including Recoveries) thereof, (b) all of the Seller's right, title and
interest in, to and under the Receivables in each Account (other than any
newly created Receivables in any Designated Account) and all Collateral
Security with respect thereto owned by the Seller at the close of business of
each Transfer Date and not theretofore conveyed to the Custodian, all monies
due or to become due and all amounts received with respect thereto and all
proceeds (including Recoveries) thereof, (c) all monies on deposit in, and
Eligible Investments credited to the Collection Account or any Series
Account, (d) any Enhancements and (e) the contractual rights and remedies of
the Custodian under the Agreement. Although a summary of certain provisions
of the Agreement is set forth herein, this certificate does not purport to
summarize the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations
of the Custodian. A copy of the Agreement may be requested from the Custodian
by writing to the Custodian at c/o CIBC Mellon Trust Company, 393 University
Avenue, 5th Floor, Toronto, Ontario, M5G 2M7, Attention: Corporate Trust
Services. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to them in the Agreement.
The Seller, the Holder of this CCCL Certificate and each Holder of a
Master Custodial Certificate for any series, by acceptance of its
Certificate, agrees to be bound by the terms of the Amended and Restated
Master Custodial and Servicing Agreement and to treat, and to take no action
inconsistent with the treatment of, this CCCL Certificate for all purposes,
including the purposes of federal or provincial income taxes and capital
taxes and any other taxes imposed on or measured by income or capital, as
evidencing an undivided ownership interest in the Purchased Property.
This CCCL Certificate is not permitted to be transferred, assigned,
exchanged or otherwise pledged or conveyed except in accordance with the
Agreement, including Section 6.04 of the Agreement.
The undivided ownership interest of the Holder of this CCCL
Certificate in the Purchased Property shall be extinguished upon the final
distribution being made out of the Purchased Property to the Holder of this
CCCL Certificate upon presentation and surrender of this CCCL Certificate to
the Custodian on or after the Distribution Date fixed for such final
distribution pursuant to Section 12.02 of the Agreement.
<PAGE>
This is the CCCL Certificate which together with any Supplemental
Certificates represents the Seller's Interest in the Purchased Property
including the right to receive a portion of the Collections and other amounts
at the times and in the amounts specified in the Agreement. The aggregate
interest represented by the CCCL Certificate and all Supplemental
Certificates at any time in the Purchased Property shall not exceed the
Seller's Interest at such time. In addition to the CCCL Certificate, (i)
Investor Master Custodial Certificates will be issued to investors pursuant
to the Agreement, which will represent the Master Custodial
Certificateholders' Interest, and (ii) Supplemental Certificates may be
issued pursuant to the Agreement, which will represent that portion of the
Seller's Interest not owned by CCCL. This CCCL Certificate shall not
represent any interest in the Collection Account, the Series Accounts or any
Enhancements, except as expressly provided in the Agreement.
<PAGE>
EXHIBIT B
ASSIGNMENT
In consideration of the payment by the Custodian to the Seller of
$10.00 and other good and valuable consideration (the receipt and adequacy of
which is hereby acknowledged) the Seller hereby sells, transfers, assigns,
sets over and conveys, without recourse (except as expressly provided in the
Custodial Agreement) to the Custodian as agent for and on behalf of the
holders from time to time of Master Custodial Certificates, and the Custodian
hereby purchases as agent to be held by the Custodian on behalf of such
holders as tenants in common, all right, title and interest of the Seller in,
to and under the Account Assets owned by the Seller in connection with each
Account at the close of business on [Cut-Off Date or Additional Cut-Off
Date].
The foregoing sale, transfer, assignment, set over and conveyance
(i) does not constitute and is not intended to result in the creation of an
assumption by the Custodian, such holders or any other Person of any
obligations of the Seller, the Servicer of the Account Assets, Chrysler
Canada Ltd. or any other Person in connection with the Account Assets or
under any agreement or instrument relating thereto, including any obligation
to the Dealers under the Account Assets, and (ii) is in addition to and does
not replace any sale, transfer, assignment, set over and conveyance of the
foregoing Account Assets heretofore entered into, executed or effected.
The Seller hereby represents and warrants to the Custodian and the
holders of the Master Custodial Certificates that all Account Assets included
in this Assignment are sold, transferred, assigned, set over and conveyed to
the Custodian free and clear of any Lien except as otherwise permitted under
the Custodial Agreement and all consents, licenses, approvals, or
authorizations of or registrations or declarations with any governmental
authority required to be obtained, effected or given by the Seller or the
Custodian in connection therewith have been duly obtained, effected or given
and are in full force and effect.
The Seller hereby agrees to do and perform, from time to time, any
and all acts and to execute any and all further instruments and documents
required or reasonably requested by the Custodian more fully to effect the
purposes of this Assignment.
Unless the context otherwise requires, the following terms have
the following meanings, respectively, when used in this Assignment:
"Account" shall mean a wholesale financing account established by
the Seller with the Dealers identified in any computer file or
microfiche or written list delivered by the Seller to the Custodian
on or before the date hereof;
"Account Assets" shall mean the Receivables and (subject to the
rights therein of any Purchaser) all Collateral Security with
respect thereto owned by the Seller at the close of business on the
Cut-Off Date, all monies due or to become due and all amounts
received with respect thereto after the Cut-Off Date including
interest thereon and all other non-principal charges with respect
thereto (including, without limitation, insurance service fees and
handling fees, Recoveries and insurance proceeds) and all proceeds
thereof;
<PAGE>
"Collateral Security" shall mean, with respect to any Receivable,
all security granted by or on behalf of the related Dealer with
respect thereto, including a security interest in the related
Vehicle and insurance proceeds, and all security granted by the
Dealer in factory receivables, parts inventory, equipment, fixtures,
service accounts or real property and all guarantees of such
Receivable and all proceeds of the foregoing;
"Custodial Agreement" shall mean the Amended and Restated Master
Custodial and Servicing Agreement between the Seller and the
Custodian dated as of December 16, 1997 as the same may be
supplemented, amended or restated from time to time wherein, among
other things, the Seller agreed to sell Account Assets to the
Custodian as agent for and on behalf of the holders of the Master
Custodial Certificates;
"Custodian" shall mean The Royal Trust Company, in its capacity as
agent for and on behalf of the holders from time to time of Master
Custodial Certificates;
"Cut-Off Date" shall mean the date specified in the first paragraph
of this Assignment;
"Dealer" shall mean a Person engaged generally in the business of
purchasing Vehicles from a manufacturer thereof and holding such
Vehicles for sale or lease in the ordinary course of business;
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), preference, participation interest, security
interest, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any
of the foregoing;
"Master Custodial Certificates" shall mean the certificates issued
from time to time by the Custodian under the Custodial Agreement to
evidence the undivided ownership interests as tenants in common of
the holders of such certificates in the Account Assets and other
property held by the Custodian under the Custodial Agreement;
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, trust
(including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof;
"Purchaser" shall have the meaning attributed to it in the
definition of Receivables;
"Receivables" shall mean, with respect to an Account, all amounts
shown on the records of the Seller or the Servicer of the Account
Assets as amounts payable by the related Dealer, from time to time
in respect of advances or payments made by the Seller to or for
the account of such Dealer, to finance the acquisition of a Vehicle
or Vehicles by such Dealer, together with the group of writings
evidencing such amounts and the security interests created in
connection therewith other than such amounts payable, writings and
security interests in respect of which the Seller has sold,
transferred, assigned, set over
<PAGE>
and conveyed a participating interest to any Person other than the
Custodian (a "Purchaser") prior to the Cut-Off Date;
"Recoveries" shall mean all amounts received, including insurance
proceeds and amounts withdrawn from Dealers' wholesale deposit and
goods and services tax reserve accounts, and applied in payment of
Receivables by the Seller or the Servicer of the Account Assets with
respect to Receivables which have become defaulted Receivables;
"Seller" shall mean Chrysler Credit Canada Ltd; and
"Vehicle" shall mean an automobile or light-duty truck.
IN WITNESS WHEREOF the Seller has executed this Assignment this ____
day of ________________ , ____.
CHRYSLER CREDIT CANADA LTD.
by: _________________ c/s
Title:
<PAGE>
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
(As required to be delivered on or before each
calendar year beginning with April 30, 1993,
pursuant to Section 3.05 of
the Amended and Restated Master Custodial and Servicing Agreement)
CHRYSLER CREDIT CANADA LTD.
The undersigned, duly authorized representatives of Chrysler Credit
Canada Ltd. ("CCCL"), as Servicer, pursuant to the Amended and Restated
Master Custodial and Servicing Agreement dated as of December 16, 1997 (as
amended, supplemented and restated, the "Agreement"), between CCCL, as Seller
and Servicer and The Royal Trust Company, as Custodian, do hereby certify
that:
1. CCCL is, as of the date hereof, the Servicer under the Agreement.
2. The undersigned are Servicing Officers and are duly authorized
pursuant to the Agreement to execute and deliver this Certificate to
the Rating Agencies, the Custodian, any Agent and any Enhancement
Providers.
3. A review of the activities of the Servicer during the calendar year
ended December 31, _____, and of its performance under the Agreement
was conducted under our supervision.
4. To the best of our knowledge based on such review, the Servicer has,
performed in all material respects all of its obligations under the
Agreement throughout such year and no material default in the
performance of such obligations has occurred or is continuing except
as set forth in paragraph 5 below.
5. The following is a description of each material default in the
performance of the Servicer's obligations under the provisions of
the Agreement known to us to have been made by the Servicer during
the year ended December 31,____. which sets forth in detail the (a)
nature of each such default, (b) the action taken by the Servicer,
if any, to remedy each such default, and (c) the current status of
each such default [If applicable, insert "None."]
Capitalized terms used and not otherwise defined herein that are
defined in the Agreement shall have the meaning ascribed to them,
respectively, in the Agreement.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Certificate this ____ day of _________________ , ____.
Name: _________________________
Title:
Name: _________________________
Tile:
<PAGE>
EXHIBIT D-1
FORM OF OPINION OF COUNSEL
Provisions to be Included in
Opinion of Counsel Delivered Pursuant
to Section 13.02(d)(i)
(a) The Amendment to the [Amended and Restated Master Custodial and
Servicing Agreement] [Supplement], attached hereto as Schedule 1 (the
"Amendment"), has been duly authorized, executed and delivered by the Seller
and constitutes the legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally from time to time in effect. The enforceability of the Seller's
obligations is also subject to general principles of equity and the possible
unavailability of specific performance or injunctive relief.
(b) The Amendment has been entered into in accordance with the terms
and provisions of Section 13.02 of the Amended and Restated Master Custodial
and Servicing Agreement.
(c) The Amendment will not adversely affect in any material respect
the interests of the Investor Master Custodial Certificateholders. [Include
this clause (c) only in the case of amendments effected pursuant to Section
13.01 (a) of the Amended and Restated Master Custodial and Servicing
Agreement.]
<PAGE>
EXHIBIT D-2
FORM OF OPINION OF COUNSEL
Provisions to be Included in
Opinion of Counsel Delivered Pursuant to
Section 13.02(d)(ii) and (iii)
The opinion set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in the
opinion of counsel delivered on behalf of the Seller on any Closing Date.
Capitalized terms used but not defined herein are used as defined in the
Amended and Restated Master Custodial and Servicing Agreement, dated as of
December 16, 1997 (as amended and supplemented, the "Agreement") between the
Seller, as seller and servicer, and The Royal Trust Company, as Custodian.
[The Assignment has been duly authorized, executed and delivered by
the Seller, and constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms.]1
1 . In each of the Relevant Provinces, the form and content of the Assignment
is sufficient to Transfer to the Custodian all of Chrysler Credit's right,
title and interest in, to and under the Account Assets which are the subject
matter thereof.
2. Under the laws of the Relevant Provinces, no registration, recording or
filing is required in connection with the Transfer of the Account Assets
which are the subject matter of the Assignment and (except for notification
to Dealers of the Transfer of the related Receivables prior to collection
thereof by the Custodian) the rights to collect payments under any of the
Receivables, or is necessary to validate and protect the Custodian's interest
as transferee of the Account Assets, which interest is and will be effective
as against all creditors of Chrysler Credit and as against subsequent
purchasers of any of the Account Assets from Chrysler Credit. No other action
is required at this time as between the Custodian and Chrysler Credit under
any applicable laws of the Relevant Provinces to evidence the sale of, or to
evidence the Transfer to the Custodian of all of Chrysler Credit's right,
title and interest in, to and under the Account Assets. Except as provided in
Schedule A, there are no renewal or known amendment requirements for any
filings, registrations or recordings that have been made as at the date
hereof.
3. Attached hereto as Schedule A is a report showing the results of the
searches conducted under the statutes specified therein against Chrysler
Credit and its predecessors as of the respective dates indicated therein to
determine the existence of any Liens in the assets, other than real property,
of Chrysler Credit to which the laws of the Relevant Provinces apply. Such
statutes are the only statutes of such Provinces or of Canada applicable
therein where such Liens would ordinarily be the subject of a public
registration, filing or recording. Such searches disclosed no Liens
registered, filed or recorded in the name of Chrysler Credit or its
predecessors with respect
- --------
1 Include bracketed language only in the case of additions of
Accounts effected pursuant to Section 2.05 of the Amended
and Restated Master Custodial and Servicing Agreement.
<PAGE>
to, and then applicable to, the Account Assets prior to the file currency
dates shown in the report. Accordingly, as of such file currency dates, the
Account Assets are free and clear of Liens held by persons claiming through
or under Chrysler Credit other than the ownership rights held by the
Custodian and other than the rights of Purchased Receivables Owners in any
Collateral Security in respect of Partial Accounts (other than the Vehicles
relating to Principal Receivables arising in the Partial Accounts), provided,
however, that to the extent such Liens are not identifiable by searching the
public registries in the Relevant Provinces identified in Schedule A, in
making this statement we are relying exclusively on the Officer's
Certificate.
You have also asked us to consider whether creditors or a trustee in
bankruptcy of Chrysler Credit (collectively, "Creditors") could look
successfully to the Account Assets to satisfy a claim against Chrysler Credit
after the Transfer thereof by Chrysler Credit to the Custodian pursuant to
the Assignment.
Creditors may assert their rights only against assets in which
Chrysler Credit has a beneficial ownership interest. In our opinion, the
Assignment is effective to validly Transfer to the Custodian all of Chrysler
Credit's right, title and interest in, to and under the Account Assets.
Chrysler Credit has not retained any interest in the Account Assets except
that Chrysler Credit has acquired an interest in the Purchased Property by
virtue of the fact that it is the Holder of the Seller's Master Custodial
Certificate. In our opinion, in a bankruptcy of Chrysler Credit the Purchased
Property, other than the undivided ownership interest therein evidence by the
Seller's Master Custodial Certificate, would not form part of the property of
the bankrupt within the meaning of the [Bankruptcy Act (Canada)] [Bankruptcy
and Insolvency Act (Canada)]. The Custodian and the Holders of the Investor
Master Custodial Certificates are separate legal entities from Chrysler
Credit which, absent any agreement to the contrary, would not be legally
responsible for the obligations of Chrysler Credit. Subject to the
qualification in clause [ * ] above, in our opinion Creditors of Chrysler
Credit could not look successfully to the Purchased Property to satisfy a
claim which the may have against Chrysler Credit, whether before or after a
bankruptcy or insolvency of Chrysler Credit or in any proceeding instituted
by or against Chrysler Credit under the Companies Creditor's Arrangement Act
("CCAA") in that the Transfer of the Account Assets to the Custodian will be
recognized as a sale thereof in any such bankruptcy, insolvency or
proceeding; provided, however, that Creditors of Chrysler Credit could look
successfully to the Purchased Property to satisfy a claim against Chrysler
Credit to the extent of Chrysler Credit's undivided ownership interest
therein evidenced by the Seller's Master Custodial Certificate but such
Creditors would have no greater claim to or rights with respect to the
Purchased Property than would the Holder of the Seller's Master Custodial
Certificate.
In our opinion, the Holders of the Investor Master Custodial
Certificates will be entitled to enforce their ownership interests in the
Purchased Property through the Custodian in accordance with the terms of the
Custodial Agreement notwithstanding the bankruptcy or insolvency of Chrysler
Credit or any proceeding instituted by or against Chrysler Credit under the
CCAA.
<PAGE>
EXHIBIT E
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.07 and 2.08 of the Amended
and Restated Master Custodial and Servicing Agreement
referred to below)
REASSIGNMENT NO. OF RECEIVABLES, dated as of , by
and between CHRYSLER CREDIT CANADA LTD., a
corporation incorporated under the laws of Canada
(the "Seller") and The Royal Trust Company, a
trust company organized and existing under the
laws of Canada, as custodian (the "Custodian")
pursuant to the Amended and Restated Master
Custodial and Servicing Agreement referred to
below.
WITNESSETH
WHEREAS the Seller as servicer (the "Servicer"), and the Custodian
are parties to the Amended and Restated Master Custodial and Servicing
Agreement dated as of December 16, 1997 (as amended or supplemented, the
"Agreement");
WHEREAS, pursuant to the Agreement, the Seller wishes to remove the
remaining Account Assets from certain Designated Accounts (the "Removed
Accounts") and to cause the Custodian to Transfer the remaining Account
Assets of such Removed Accounts from the Purchased Property to the Seller;
and
WHEREAS the Custodian has received from the Seller a written request
pursuant to Section [2.07(c) [2.08(c)] of the Agreement requesting the
Custodian to execute and deliver this Reassignment.
NOW, THEREFORE, the Seller and the Custodian hereby agree as
follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Commencement Date" shall mean, with respect to the
Removed Accounts designated hereby,
"Removal Date" shall mean, with respect to the Removed Accounts
designated hereby, _____________________ .
2. Designation of Removed Accounts. The computer file, microfiche or
written list delivered to the Custodian pursuant to Section [2.07(b)(ii)]
[2.08(b)(h)] of the Agreement shall
<PAGE>
be marked as Schedule 1 to this Reassignment and shall be incorporated into
and made a part of this Reassignment as of the Removal Date and shall amend
Schedule 1 to the Agreement.
3. Transfer of Receivables and Accounts. (a) The Custodian hereby
Transfers to the Seller, [in consideration of an increase in the Master
Custodial Certificateholders' Interest - 2.07] without recourse,
representation or warranty on and after the Removal Date, all right, title
and interest of the Custodian in, to and under all Account Assets now
existing at the close of business on the Removal Date and thereafter created
from time to time until the termination of the Custodial Arrangement as it
applies to the Removed Accounts designated in Schedule 1 hereto.
(b) If requested by the Seller, in connection with such Transfer,
the Custodian agrees to execute and deliver to the Seller on or prior to the
date of this Reassignment, a financing change statement or statements with
respect to the Account Assets existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed Accounts
Transferred hereby to give effect to the Transfer by the Custodian of the
interest held by it in the Account Assets in the said Removed Accounts.
4. Acceptance by Custodian. The Custodian hereby acknowledges that,
prior to or simultaneously with the execution and delivery of this
Reassignment, the Seller delivered to the Custodian the computer file,
microfiche or written list described in Section 2 of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Custodian, as of the date of this Reassignment
and as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the, enforcement of creditors' rights
generally and except as such enforceability may be limited by
general principles of equity;
(b) No Early Amortization Event. The removal of the Removed Accounts
hereby removed shall not, in the reasonable belief of the Seller,
cause an Early Amortization Event to occur or cause the Pool Balance
to be less than the Required Participation Amount;
(c) Selection Procedures. No selection procedures believed by the
Seller to be adverse to the interests of the Custodian, the Investor
Master Custodial Certificateholders or the Enhancement Providers
were utilized in selecting the Designated Accounts;
(d) True and Complete List. The list of Removed Accounts described
in Section 2 of this Reassignment is true and complete in all
material respects; and
(e) No Rating Reduction. The removal of the Removed Accounts hereby
removed
<PAGE>
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class by the applicable Rating Agency;
provided, however, that in the event that the removal on such
Removal Date relates solely to Ineligible Accounts, the Seller shall
be deemed to make only the representations and warranties contained
in paragraph 5 (a) above.
6. Conditions Precedent. In addition to the conditions precedent set
forth in Section [2.07] [2.08] of the Agreement, the obligation of the
Custodian to execute and deliver this Reassignment is subject to the
satisfaction, on or prior to the Removal Commencement Date, of the following
additional condition precedent:
Officer's Certificate. The Seller shall have delivered to the
Custodian, any Agent and any Enhancement Providers, an Officer's Certificate
certifying that (i) as of the Removal Commencement Date, all requirements set
forth in Section [ 2.07 ] [ 2.08 ] of the Agreement for designating Removed
Accounts and Transferring the Account Assets of such Removed Accounts,
whether existing at the close of business on the Removal Date or thereafter
created from time to time until the termination of the Custodial Arrangement
as it applies to the Removal Accounts, have been satisfied, and (ii) each of
the representations and warranties made by the Seller in Section 5 hereof is
true and correct as of the date of this Reassignment and as of the Removal
Commencement Date. The Custodian may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the matters
set forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment,
the Agreement is in all respects ratified and confirmed and the Agreement as
so supplemented by this Reassignment shall be read, taken and construed as
one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
counterparts,'and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
9. Governing Law. This Reassignment shall be construed in accordance
with the laws of the Province of Ontario and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to
be duly executed and delivered by their respective duly authorized officers
on the day and year first above written.
CHRYSLER CREDIT CANADA LTD.,
Seller
by: ________________________
Name:
Title:
THE ROYAL TRUST COMPANY,
Custodian
<PAGE>
by: __________________
Name:
Title:
by: __________________
Name:
Title:
<PAGE>
SCHEDULE 1
List of Accounts
<PAGE>
SCHEDULE 2
Collection Account No. 088029002
Exhibit 10-DD
Conformed Copy
CHRYSLER CREDIT CANADA LTD.
Seller and Servicer
and
THE ROYAL TRUST COMPANY
Custodian
and
PRIME TRUST
Purchaser
and
AUTO RECEIVABLES CORPORATION
Purchaser
and
CHRYSLER FINANCIAL CORPORATION
Limited Guarantor
---------
Amended and Restated
Series 1995-1 SUPPLEMENT
Dated as of December 16, 1997
to
AMENDED AND RESTATED
MASTER CUSTODIAL AND SERVICING AGREEMENT
Dated as of December 16, 1997
---------
Series 1995-1
<PAGE>
<PAGE>
Amended and Restated Series 1995-1 SUPPLEMENT dated as
of December 16, 1997 (the "Series Supplement"), between
CHRYSLER CREDIT CANADA LTD., a Canadian corporation, as
Seller and Servicer, THE ROYAL TRUST COMPANY, a trust
company organized and existing under the laws of
Canada, as Custodian, PRIME TRUST, a trust established
pursuant to the laws of Ontario, as Purchaser and AUTO
RECEIVABLES CORPORATION, an Ontario corporation, as
Purchaser and CHRYSLER FINANCIAL CORPORATION, a
Michigan corporation, as limited guarantor.
WHEREAS pursuant to Section 6.03 of the Master Custodial and
Servicing Agreement dated as of September 1, 1992, as amended, among the
Seller, the Servicer and the Custodian, the Seller directed the Custodian to
issue Series 1995-1 Investor Master Custodial Certificates as a Class A
Certificate and a Class B Certificate, the Principal Terms of which were
specified in the Series 1995-1 Supplement among the Seller, the Custodian,
CoRe Trust and Auto Receivables Corporation;
AND WHEREAS the said Master Custodial and Servicing Agreement has
been amended and restated as of December 16, 1997 (such agreement as amended
and restated being herein referred to as the "Agreement");
AND WHEREAS CoRe Trust has assigned the Class A Certificate to Prime
Trust;
AND WHEREAS the parties to the Series 1995-1 Supplement (other than
CoRe Trust) and Prime Trust wish to amend and restate the same, by deleting
as a party CoRe Trust, adding as a party Prime Trust and making certain
further amendments thereto and restating the same as provided herein;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, each party agrees as follows:
ARTICLE 1
Creation of the Series 1995-1
-----------------------------
Master Custodial Certificates
-----------------------------
SECTION 1.1 Designation
-----------
(a) There is hereby created a Series of Investor Master Custodial
Certificates to be issued pursuant to the Agreement and this Series
Supplement to be known as the "Master Custodial Certificates, Series 1995-1",
such Series to consist of two classes of Investor Master
<PAGE>
2
Custodial Certificates, a Class A Certificate and a Class B Certificate. The
Class B Certificate shall be subordinated in right of payment to the Class A
Certificate to the extent set forth herein.
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any terms or provisions contained in
the Agreement, the terms and provisions of this Series Supplement shall
govern.
ARTICLE 2
Definitions
-----------
SECTION 2.1 Definitions
-----------
(a) Whenever used in this Series Supplement the following words and
phrases shall have the following meanings.
"Additional Carry-over Amount" shall mean an Additional Class A
Carry-over Amount and/or an Additional Class B Carry-over Amount.
"Additional Class A Carry-over Amount" shall have the meaning
specified in Section 4.2(d).
"Additional Class A Interest Amount" shall have the meaning specified
in Section 4.2(c).
"Additional Class B Carry-over Amount" shall have the meaning
specified in Section 4.2(f).
"Additional Class B Interest Amount" shall have the meaning specified
in Section 4.2(e).
"Additional Interest Amount" shall mean Additional Class A Interest
Amount and/or an Additional Class B Interest Amount.
"Additional Issue Expenses" shall have the meaning specified in
Section 3.1.
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period the product of (a) the Series 1995-1 Allocation Percentage
with respect to such Collection Period and (b) the Defaulted Amount with
respect to such Collection Period.
<PAGE>
3
"Allocable Miscellaneous Payments" shall mean, with respect to any
Distribution Date, the product of (a) the Series 1995-1 Allocation Percentage
for the related Collection Period and (b) Miscellaneous Payments with respect
to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to any
Deposit Date, the product of (a) the Series 1995-1 Allocation Percentage for
the related Collection Period and (b) the aggregate amount of Collections of
Non-Principal Receivables relating to such Deposit Date.
"Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of (a) the Series 1995-1 Allocation Percentage for
the related Collection Period and (b) the aggregate amount of Collections of
Principal Receivables relating to such Deposit Date.
"Assets Receivables Rate" shall mean, with respect to any Interest
Period, an amount expressed as a percentage equal to 12 multiplied by a
fraction, (a) the numerator of which is the sum of (i) Investor Non-Principal
Collections for the Collection Period immediately preceding the last day of
such Interest Period (which, for the purposes of this definition only, shall
be determined based on the Non-Principal Receivables billed to the Dealers
which are due during such preceding Collection Period) less the Series 1995-1
Monthly Servicing Fee, if any, with respect to such immediately preceding
Collection Period and (ii) the Investment Proceeds to be applied on the
Distribution Date related to such Interest Period and (b) the denominator of
which is the sum of (i) the product of (x) the Floating Allocation Percentage
for such preceding Collection Period, (y) the Series Allocation Percentage
for such preceding Collection Period and (z) the average Pool Balance (after
giving effect to Investor Charge-offs) for such preceding Collection Period,
and (ii) the principal balance on deposit in the Principal Funding Account on
the Distribution Date relating to the immediately preceding Interest Period
(after giving effect to all deposits thereto and withdrawals therefrom on
such Distribution Date).
"Available Investor Principal Collections" shall mean, with respect
to any Distribution Date, the sum of (a) an amount equal to Investor
Principal Collections for such Distribution Date, (b) Allocable Miscellaneous
Payments with respect to such Distribution Date, (c) Series 1995-1 Excess
Principal Collections on deposit in the Collection Account for such
Distribution Date and (d) for a Distribution Date which is also the
Termination Date, any funds in the Reserve Fund and the Yield Supplement
Account after giving effect to Section 4.8.
"Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of (a) the Available Seller's Non-Principal Collections
for such Deposit Date and (b) the Available Seller's Principal Collections
for such Deposit Date.
"Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's
<PAGE>
4
Percentage for the related Collection Period over (ii) the Excess Seller's
Percentage for such Collection Period by (b) Allocable Non-Principal
Collections for such Deposit Date.
"Available Seller's Principal Collections" shall mean, with respect
to any Deposit Date, an amount equal to the result obtained by multiplying
(a) the excess of (i) the Seller's Percentage for the related Collection
Period over (ii) the Excess Seller's Percentage for such Collection Period by
(b) Allocable Principal Collections for such Deposit Date.
"Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Required Subordinated Amount. The Available
Subordinated Amount for any subsequent Determination Date shall mean an
amount equal to (i) the lesser of (a) the Available Subordinated Amount for
the preceding Determination Date, minus (I) the Required Subordination Draw
Amount with respect to the preceding Distribution Date to the extent provided
in Section 4.8, minus (II) withdrawals from the Reserve Fund pursuant to
Section 4.8 on the preceding Distribution Date to make distributions pursuant
to Section 4.6(a)(iii) (but excluding any other withdrawals from the Reserve
Fund), plus (III) the portion of Excess Income for such preceding
Distribution Date distributed to the Seller pursuant to Section 4.10(c) plus
(IV) the excess, if any, of the Required Subordinated Amount for such
Determination Date over the Required Subordinated Amount for the immediately
preceding Determination Date, and (b) other than with respect to any
Distribution Date following the reduction of the outstanding principal
balance of the Series 1995-1 Investor Master Custodial Certificates to zero
as described in Section 4.7(c), the product of the Subordinated Percentage
and the Invested Amount on such Determination Date (after giving effect to
any reduction to be made therein on the immediately following Distribution
Date), minus (ii) in the case of clause (a), the Incremental Subordinated
Amount for such preceding Determination Date, plus (iii) the Incremental
Subordinated Amount for the current Determination Date; provided, however,
that once the Controlled Amortization Period or any Series 1995-1 Early
Amortization Period (other than a Series 1995-1 Early Amortization Period
which has ended as described in clause (c) of the definition of Early
Amortization Period) shall have commenced, the Available Subordinated Amount
shall be calculated based on the Invested Amount as of the close of business
on the day preceding such Controlled Amortization Period or Series 1995-1
Early Amortization Period.
"Canadian BA Rate" shall mean that per annum rate for an Interest
Period expressed as a percentage, equal to the average rate for Dollar
bankers acceptances for a period equal to 30 days; provided that the
applicable rate shall be based upon the rates appearing on the "Reuters
Screen CDOR Page" (as defined in The International Swap Dealer Association,
Inc. definitions, as modified and amended from time to time) as of 10:00
a.m., Toronto time, on the first Business Day during the applicable Interest
Period. If such rates do not appear on the Reuters Screen CDOR Page as
contemplated, then the "Canadian BA Rate" for such Interest Period shall be
calculated at the times, based on the same maturities and on the same basis
as set forth in the previous sentence, except that the rates for Dollar
bankers acceptances shall be based upon the arithmetic mean of the applicable
rates quoted by four major Canadian
<PAGE>
5
Schedule 1 chartered banks as of 10:00 a.m., Toronto time, on the first day
of such Interest Period and the parties agree that initially such banks will
be (i) Bank of Montreal, (ii) Bank of Nova Scotia, (iii) The Royal Bank of
Canada and (iv) The Toronto-Dominion Bank. If less than four of the
institutions described in the immediately preceding sentence quote the
aforementioned rate on the days and at the times described in such sentence,
the "Canadian BA Rate" shall be such other rate or rates as the parties may
agree.
"Carry-over Amount" shall mean a Class A Carry-over Amount and/or a
Class B Carry-over Amount.
"Class A Carry-over Amount" shall mean for any Distribution Date with
respect to which the Class A Certificate Rate is calculated based on the
Assets Receivables Rate, the excess of (a) Class A Monthly Interest for such
Distribution Date determined as if such Class A Certificate Rate were
calculated pursuant to clause (a) of the definition thereof over (b) the
actual Class A Monthly Interest for such Distribution Date.
"Class A Carry-over Shortfall" shall have the meaning specified in
Section 4.2(d).
"Class A Certificate" shall mean the Series 1995-1 Master Custodial
Certificate as executed by and authenticated by the Custodian, substantially
in the form of Exhibit A.
"Class A Certificateholder" means the Person who is the holder of the
Class A Certificate as indicated in the Certificate Register.
"Class A Certificate Rate" shall mean, with respect to any Interest
Period, the lesser of (a) the rate quoted by the Class A Certificateholder on
the Determination Date during such Interest Period as the estimated cost to
such Class A Certificateholder of financing the Purchase of the Class A
Certificate for such Interest Period, together with any adjustments
determined by such Class A Certificateholder to be necessary by reason of the
difference between (x) the actual cost of financing such purchase for the
immediately preceding Interest Period, and (y) the estimated cost quoted for
such immediately preceding Interest Period, plus the Program Fee, and (b) the
Assets Receivables Rate for such Interest Period.
"Class A Interest Shortfall" shall have the meaning specified in
Section 4.2(c).
"Class A Monthly Interest" shall have the meaning specified in
Section 4.2(a).
"Class B Carry-over Amount" shall mean for any Distribution Date with
respect to which the Class B Certificate Rate is calculated based on the
Assets Receivables Rate, the excess of (a) Class B Monthly Interest for such
Distribution Date determined as if such Class B Certificate Rate were
calculated pursuant to clause (a) of the definition thereof over (b) the
actual Class B Monthly Interest for such Distribution Date.
<PAGE>
6
"Class B Carry-over Shortfall" shall have the meaning specified in
Section 4.2(f).
"Class B Certificate" shall mean the Series 1995-1 Master Custodial
Certificate executed by and authenticated by the Custodian, substantially in
the form of Exhibit B.
"Class B Certificateholder" means the Person who is the holder of the
Class B Certificate as indicated in the Certificate Register.
"Class B Certificate Rate" shall mean, with respect to any Interest
Period, the lesser of (a) the Canadian BA Rate, plus 1.10%, and (b) the
Assets Receivables Rate for such Interest Period.
"Class B Interest Shortfall" shall have the meaning specified in
Section 4.2(e).
"Class B Monthly Interest" shall have the meaning specified in
Section 4.2(b).
"Closing Date" shall mean September 20, 1995.
"Controlled Amortization Period" shall mean, unless a Series 1995-1
Early Amortization Event shall have occurred prior thereto (other than a
Series 1995-1 Early Amortization Event which has resulted in a Series 1995-1
Early Amortization Period which has ended as described in clause (c) of the
definition of Early Amortization Period), the period commencing on the
Controlled Amortization Period Commencement Date and ending upon the first to
occur of (a) the commencement of a Series 1995-1 Early Amortization Period
and (b) the payment in full to Series 1995-1 Master Custodial
Certificateholders of the outstanding principal balance of the Series 1995-1
Investor Master Custodial Certificates.
"Controlled Amortization Period Commencement Date" shall mean the
first day of the earlier of the December 2002 Collection Period or (ii) the
first day of the Collection Period next following the Collection Period in
which a Controlled Amortization Notice is delivered to the Person receiving
such Controlled Amortization Notice.
"Controlled Amortization Notice" means a notice delivered pursuant to
Section 6.2.
"Controlled Amortization Period Principal Distribution Date" shall
mean the Distribution Date occurring in each of the four calendar months next
following the Collection Period in which the Controlled Amortization Period
Commencement Date falls.
"Controlled Distribution Amount" shall mean, with respect to each of
the Controlled Amortization Period Principal Distribution Dates, the sum of
(i) 25% of the Initial Invested Amount at the Controlled Amortization Period
Commencement Date, and (ii) the Required Initial Invested Amount Reduction
Amount on such Distribution Date.
<PAGE>
7
"Custodial Available Subordinated Amount" means the sum of the
Available Subordinated Amount and the sum of the aggregate "available
subordinated amounts" for, and as that term may be defined in respect of, all
other outstanding Series.
"Cut-Off Date" in relation to Series 1995-1 means August 31, 1995.
"Deficiency Amount" shall have the meaning specified in Section 4.5.
"Excess Income" shall mean, with respect to any Distribution Date,
the sum of the amount, if any, specified pursuant to Section 4.6(a)(vii) with
respect to such Distribution Date.
"Excess Reserve Fund Required Amount" shall mean, for any
Distribution Date with respect to a Series 1995-1 Early Amortization Period,
an amount equal to the greater of (a) 5% of the initial aggregate principal
balance of the Series 1995-1 Investor Master Custodial Certificates and (b)
the excess of (i) the sum of (x) the Available Subordinated Amount on the
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date)
and (y) (A) a percentage equal to the excess of the Required Participation
Percentage over 100%, multiplied by (B) the outstanding aggregate principal
balance of the Series 1995-1 Investor Master Custodial Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) over (ii) the excess of (x) the Series 1995-1 Allocation
Percentage of the Pool Balance on the last day of the immediately preceding
Collection Period over (y) the Invested Amount on such Distribution Date
(after giving effect to changes therein on such Distribution Date); provided
that the Excess Reserve Fund Required Amount shall not exceed such Available
Subordinated Amount.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than 0%
nor more than 100%) equal to (a) 100% minus, when used with respect to
Non-Principal Receivables and Defaulted Receivables and Principal Receivables
during the Revolving Period, the sum of (i) the Floating Allocation
Percentage with respect to such Collection Period and (ii) the percentage
equivalent of a fraction, the numerator of which is the Available
Subordinated Amount as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations, distributions, withdrawals
and deposits to be made on the Distribution Date immediately following such
Determination Date) and the denominator of which is the product of (i) the
Pool Balance as of the last day of the immediately preceding Collection
Period and (ii) the Series 1995-1 Allocation Percentage with respect to the
Collection Period in respect of which the Excess Seller's Percentage is being
calculated or (b) 100% minus, when used with respect to Principal Receivables
during the Controlled Amortization Period and a Series 1995-1 Early
Amortization Period, the sum of (i) the Principal Allocation Percentage with
respect to such Collection Period and (ii) the percentage equivalent of a
fraction, the numerator of which is the Available Subordinated Amount as of
the Determination Date occurring in such Collection Period (after giving
effect to the allocations, distributions, withdrawals and deposits to be
<PAGE>
8
made on the Distribution Date immediately following such Determination Date)
and the denominator of which is the product of (i) the Pool Balance as of the
last day of such immediately preceding Collection Period and (ii) the Series
1995-1 Allocation Percentage with respect to the Collection Period in respect
of which the Excess Seller's Percentage is being calculated.
"Final Payment Date" shall mean the first Distribution Date on which,
after giving effect to all payments to be made on that Distribution Date, the
outstanding principal balance of the Class A Certificate and the Class B
Certificate will be reduced to zero.
"Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as
of the last day of the immediately preceding Collection Period (after giving
effect to any change therein to occur on the next succeeding Distribution
Date) and the denominator of which is the product of (a) the Pool Balance as
of such last day and (b) the Series 1995-1 Allocation Percentage with respect
to the Collection Period in respect of which the Floating Allocation
Percentage is being calculated; provided, however, that, with respect to the
first Collection Period, the Floating Allocation Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Initial
Invested Amount and the denominator of which is the product of (x) the Pool
Balance on the Cut-Off Date and (y) the Series 1995-1 Allocation Percentage
with respect to the Cut-Off Date.
"Incremental Subordinated Amount" shall mean, with respect to any
Determination Date, the result obtained by multiplying (a) a fraction, the
numerator of which is the sum of (i) (A) the Invested Amount on the last day
of the immediately preceding Collection Period (after giving effect to any
change therein to occur on the next succeeding Distribution Date) or (B) with
respect to the first Determination Date, the Invested Amount on the Closing
Date and (ii) (A) the Available Subordinated Amount for such Determination
Date (calculated without adding the Incremental Subordinated Amount for such
Distribution Date as described in clause (iii) of the definition thereof) or
(B) with respect to the first Determination Date, the product of the Invested
Amount on the Closing Date and the Subordinated Percentage, and the
denominator of which is the Pool Balance on such last day by (b) the
Custodial Incremental Subordinated Amount.
"Initial Invested Amount" shall mean the aggregate initial principal
amount of the Series 1995-1 Investor Master Custodial Certificates which is
invested in Principal Receivables on the Closing Date minus (a) as described
in Section 4.12(a), the amount of any deposits to the Principal Funding
Account, plus (b) as described in Section 4.12(b), the amount of any
withdrawals from the Principal Funding Account.
"Initial Reserve Fund Deposit Amount" shall mean $1,802,500.
"Initial Yield Supplement Account Deposit Amount" shall mean
$1,802,500.
<PAGE>
9
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding
such Distribution Date (or, in the case of the initial Distribution Date, the
Closing Date) to but excluding such Distribution Date. Interest will be
calculated on the basis of the actual number of days in each Interest Period
divided by 365.
"Interest Shortfall" shall mean a Class A Interest Shortfall and/or a
Class B Interest Shortfall.
"Invested Amount" shall mean, when used with respect to any date, an
amount equal to (a) the Initial Invested Amount, minus (b) the excess, if
any, of the aggregate amount of Investor Charge-Offs over Investor
Charge-Offs reimbursed pursuant to Section 4.9 prior to such date. In
addition, for purposes of the definition of "Series 1995-1 Early Amortization
Period", the Invested Amount shall be an amount equal to the aggregate
outstanding principal balance of the Series 1995-1 Investor Master Custodial
Certificates.
"Invested Amount Increase Date" shall have the meaning specified in
Section 4.12.
"Invested Amount Reduction Date" shall have the meaning specified in
Section 4.12.
"Investment Proceeds" shall mean, with respect to any Determination
Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Series 1995-1 Accounts,
together with an amount equal to the Series 1995-1 Allocation Percentage of
the interest and other investment earnings on funds held in the Collection
Account credited to the Collection Account pursuant to Section 4.02 of the
Agreement.
"Investor Charge-Offs" shall have the meaning specified in Section
4.9.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Allocable
Defaulted Amount for the related Collection Period and (b) the Floating
Allocation Percentage for the related Collection Period.
"Investor Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) the Floating
Allocation Percentage for the related Collection Period and (ii) Allocable
Non-Principal Collections deposited in the Collection Account for the related
Collection Period.
"Investor Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (i) the Floating Allocation
Percentage, with respect to the Revolving Period, or the Principal Allocation
Percentage, with respect to the Controlled Amortization Period or an Series
1995-1 Early Amortization Period, for the related Collection Period (or any
partial Collection Period which occurs as the first Collection Period during
a Series 1995- 1 Early Amortization Period) and (ii) Allocable Principal
Collections deposited in the Collection
<PAGE>
10
Account for the related Collection Period (or any partial Collection Period
which occurs as the first Collection Period during an Early Amortization
Period) and (b) the amount, if any, of Collections of Non-Principal
Receivables, Excess Income and Available Seller's Collections which this
Series Supplement provides are to be treated as a portion of Investor
Principal Collections, including pursuant to Section 4.6(a)(iii), 4.8(b) and
4.10(a), on such Distribution Date.
"Maximum Initial Invested Amount" shall mean such amount as requested
by the Seller and agreed to by the Purchasers from time to time by delivery
by the Purchasers to the Seller, the Servicer and the Custodian of a notice
substantially in the form set forth in the form of Exhibit D attached hereto
provided, however that the Maximum Initial Invested Amount shall not exceed
$515,000,000.
"Monthly Interest" shall mean the sum of Class A Monthly Interest and
Class B Monthly Interest.
"Monthly Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Collections of Principal Receivables for
such Collection Period by the average daily Pool Balance for such Collection
Period.
"Monthly Principal" shall have the meaning specified in Section 4.3.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.1.
"Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as
of the last day of the Revolving Period and the denominator of which is the
product of (a) the Pool Balance as of the last day of the immediately
preceding Collection Period and (b) the Series 1995-1 Allocation Percentage
with respect to the Collection Period in respect of which the Principal
Allocation Percentage is being calculated; provided, however, that with
respect to that portion of any Collection Period that falls after the date on
which a Series 1995-1 Early Amortization Event occurs (other than a Series
1995-1 Early Amortization Event which has resulted in a Series 1995-1 Early
Amortization Period which has ended as described in clause (c) of the
definition of Early Amortization Period), the Principal Allocation Percentage
shall be reset using the Pool Balance as of the close of business on the date
on which such Early Amortization Event shall have occurred and Collections of
Principal Receivables shall be allocated for such portion of such Collection
Period using such reset Principal Allocation Percentage.
"Principal Funding Account" shall have the meaning specified in
Section 4.4.
"Program Fee" shall equal the percentage equivalent of a fraction,
<PAGE>
11
the numerator which is equal to:
(i) the sum of:
(a) the product of
(x) the Utilized Program Fee, and
(y) the outstanding balance of the Class A Certificate
and
(b) the product of
(x) the Unutilized Program Fee, and
(y) the Maximum Initial Invested Amount, less the
aggregate outstanding balance of the Series
1995-1 Investor Master Custodial Certificates
and the denominator which is equal to:
(ii) the Maximum Initial Invested Amount less the outstanding
balance of the Class B Certificate
provided that during the Amortization Period or Early Amortization
Period, the Program Fee shall be equal to the Utilized Program Fee.
"Purchasers" shall mean, collectively, Prime Trust and Auto
Receivables Corporation and their respective successors and assigns.
"Reassignment Amount" shall mean, with respect to any Distribution
Date, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date, the sum of (i) the Invested Amount on such
Distribution Date, (ii) accrued and unpaid interest on the unpaid balance of
the Series 1995-1 Investor Master Custodial Certificates (calculated on the
basis of the outstanding principal balance of the Series 1995-1 Investor
Master Custodial Certificates at their respective certificate rates as in
effect during the applicable Interest Periods) through the day preceding such
Distribution Date, (iii) the amount of Additional Interest Amount, if any,
for such Distribution Date and any Additional Interest Amount previously due
but not distributed to the Series 1995-1 Master Custodial Certificateholders
on a prior Distribution Date, (iv) any Carry-over Amount for such
Distribution Date and any Carry-over Amount previously due but not
distributed to the Series 1995-1 Master Custodial Certificateholders on a
prior Distribution Date, and (v) any Additional Carry-over Amount for such
Distribution Date and any Additional Carry-over Amount previously due but not
distributed to the Series 1995-1 Master Custodial Certificateholders on a
prior Distribution Date.
<PAGE>
12
"Required Initial Invested Amount" shall mean the quotient obtained
by dividing (i) the Required Series 1995-1 Participation Amount by (ii) the
sum of (a) the Required Participation Percentage and (b) the Subordinated
Percentage.
"Required Initial Invested Amount Increase Amount" shall mean for any
Distribution Date the excess (if any) of the Required Initial Invested Amount
as of such Distribution Date over the Required Initial Invested Amount as of
the preceding Distribution Date.
"Required Initial Invested Amount Reduction Amount" shall mean for
any Distribution Date the excess (if any) of the Required Initial Invested
Amount as of the preceding Distribution Date over the Required Initial
Invested Amount as of such Distribution Date.
"Required Participation Percentage" shall mean, with respect to
Series 1995-1, 104%; provided, however, that the Seller may, upon 10 days'
prior notice to the Custodian, each Rating Agency and any Enhancement
Provider, reduce the Required Participation Percentage to a percentage which
shall not be less than 100%; provided that neither the Seller nor the
Servicer has been notified that any such reduction will result in a reduction
or withdrawal of the rating of any outstanding Series or Class by any Rating
Agency with respect to which it is a Rating Agency.
"Required Series 1995-1 Participation Amount" shall mean, with
respect to any Distribution Date, the lesser of (i) the sum of (a) the
product of the Maximum Initial Invested Amount at such date and the Required
Participation Percentage with respect to Series 1995-1, and (b) the product
of the Subordinated Percentage with respect to Series 1995-1 and the Maximum
Initial Invested Amount, and (ii) the Pool Balance on the last day of the
related Collection Period, less (a) the sum of the Available Subordinated
Amounts of each Series (other than Series 1995-1) as at the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
following such Determination Date), less (b) the sum of the amounts for each
Series (other than Series 1995-1) equal to the product of the Required
Participation Percentage for each such Series and the Initial Invested Amount
for each such Series.
"Required Subordinated Amount" shall mean, as of any date of
determination, the sum of (a) the product of (i) the Subordinated Percentage
and (ii) the Invested Amount on such date and (b) the Incremental
Subordinated Amount on such date.
"Required Subordination Draw Amount" shall have the meaning specified
in Section 4.5.
"Reserve Fund" shall have the meaning specified in Section 4.4.
"Reserve Fund Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which (i) the Reserve Fund Required
Amount for such Distribution Date
<PAGE>
13
exceeds (ii) the amount of funds in the Reserve Fund after giving effect to
any deposits thereto and withdrawals therefrom otherwise to be made on such
Distribution Date.
"Reserve Fund Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the greater of (i) the product of (a)
0.35% and (b) the outstanding principal balance of the Series 1995-1 Investor
Master Custodial Certificates on such Distribution Date (after giving effect
to any changes therein on such Distribution Date) and (ii) the product of (a)
0.25% and (b) the Maximum Initial Invested Amount.
"Revolving Period" shall mean the period beginning at the close of
business on the Cut-Off Date and ending on the earlier of (a) the close of
business on the day immediately preceding the Controlled Amortization Period
Commencement Date and (b) the close of business on the day a Series 1995-1
Early Amortization Period commences; provided, however, that, if a Series
1995-1 Early Amortization Period ends as described in clause (c) of the
definition of Early Amortization Period, the Revolving Period will recommence
as of the close of business on the day such Series 1995-1 Early Amortization
Period ends.
"Seller's Collections" shall mean, with respect to any Collection
Period, the sum of (a) the Seller's Percentage of Allocable Non-Principal
Collections for the related Collection Period, plus (b) the Seller's
Percentage of Allocable Principal Collections for the related Collection
Period.
"Seller's Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used with respect to Non-Principal Receivables
and Defaulted Receivables and, during the Revolving Period, Principal
Receivables, and (b) the Principal Allocation Percentage, when used with
respect to Principal Receivables during the Controlled Amortization Period
and any Series 1995-1 Early Amortization Period.
"Series 1995-1" shall mean the Series of Master Custodial
Certificates, the terms of which are specified in this Series Supplement.
"Series 1995-1 Accounts" shall have the meaning specified in Section
4.4.
"Series 1995-1 Adjusted Invested Amount" shall mean the Series
Adjusted Invested Amount with respect to Series 1995-1.
"Series 1995-1 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 1995-1.
"Series 1995-1 Early Amortization Event" shall mean any Early
Amortization Event specified in Section 9.01 of the Agreement, together with
any additional event specified in Section 6.1 of this Series Supplement.
<PAGE>
14
"Series 1995-1 Early Amortization Period" shall mean an Early
Amortization Period with respect to Series 1995-1.
"Series 1995-1 Excess Principal Collections" shall mean that portion
of Excess Principal Collections allocated to Series 1995-1 pursuant to
Section 4.11.
"Series 1995-1 Master Custodial Certificateholders" shall mean the
Persons who are Holders of Series 1995-1 Investor Master Custodial
Certificates as indicated in the Certificate Register.
"Series 1995-1 Master Custodial Certificateholders' Interest" shall
mean that portion of the Master Custodial Certificateholders' Interest
evidenced by the Series 1995-1 Investor Master Custodial Certificates.
"Series 1995-1 Investor Master Custodial Certificates" shall mean the
Class A Certificate and the Class B Certificate.
"Series 1995-1 Monthly Servicing Fee" shall have the meaning
specified in Section 3.1.
"Series 1995-1 Principal Shortfall" shall have the meaning specified
in Section 4.11.
"Series 1995-1 Termination Proceeds" shall mean any Termination
Proceeds arising out of a sale of Receivables (or interests therein) pursuant
to Section 12.02(c) of the Agreement with respect to Series 1995-1.
"Servicing Fee Rate" shall mean, with respect to Series 1995-1 and
with respect to any Distribution Date in respect of which a Monthly Servicing
Fee is payable, the rate determined pursuant to Section 3.1 hereof, but not
in excess of 1%.
"Special Payment Date" shall mean each Distribution Date with respect
to a Series 1995-1 Early Amortization Period (other than a Series 1995-1
Early Amortization Period which has ended as described in clause (c) of the
definition of Early Amortization Period).
"Spread Shortfall Account" shall have the meaning set forth in
Section 4.4.
"Spread Shortfall Amount" shall have the meaning specified in Section
4.8(a).
"Spread Shortfall Guarantee Amount" shall mean, with respect to any
Distribution Date, (i) before the event described in (ii) below, the product
of (a) the Monthly Payment Rate, (b) 0.75% and (c) the Series 1995-1 Adjusted
Investment Amount or (ii) in the event that on or before such Distribution
Date the rating of the long-term unsecured debt of CFC is lowered below BBB-
by Standard & Poor's (or withdrawn by Standard & Poor's), zero.
<PAGE>
15
"Spread Shortfall Required Amount" shall mean the product of (a)
0.75% and (b) the Maximum Initial Invested Amount.
"Subordinated Percentage" shall mean the percentage equivalent of a
fraction, the numerator of which is the Subordination Factor and the
denominator of which will be the excess of 100% over the Subordination
Factor.
"Subordination Factor" means 8%; provided, however, that the
Subordination Factor will be 9.25% in the event that (i) the rating of the
long-term unsecured debt of the Seller is lowered, in case of CBRS Inc. to
below B++ (low) or in the case of Dominion Bond Rating Service Limited, to
below BBB (low), or withdrawn by either rating agency, unless, in either such
case, the Class A Certificateholder receives written confirmation from the
Rating Agency that the failure to so increase the Subordination Factor would
not result in the downgrade or withdrawal of the rating of the Class A
Certificate by such Rating Agency or (ii) the rating of the long-term
unsecured debt of CFC is lowered below BBB- by Standard & Poor's or withdrawn
by Standard & Poor's.
"Termination Date" shall mean the December 2004 Distribution Date.
"Utilized Program Fee" shall mean the rate quoted in the most recent
notice delivered by the Purchasers in the form attached as Exhibit D.
"Unutilized Program Fee" shall mean the rate quoted in the most
recent notice delivered by the Purchasers in the form attached as Exhibit D.
"Yield Supplement Account" shall have the meaning specified in
Section 4.4.
"Yield Supplement Account Deposit Amount" shall mean, with respect to
any Distribution Date, the amount, if any, by which the Yield Supplement
Account Required Amount exceeds the amount on deposit in the Yield Supplement
Account after giving effect to any deposits thereto and withdrawals therefrom
otherwise to be made on such Distribution Date.
"Yield Supplement Account Required Amount" shall mean, with respect
to any Distribution Date, an amount equal to the product of (a) 0.35% and (b)
the Maximum Initial Invested Amount.
(b) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the term "Rating Agency" shall mean, whenever
used in this Series Supplement or the Agreement with respect to Series
1995-1, Dominion Bond Rating Service Limited. As used in this Series
Supplement and in the Agreement with respect to Series 1995-1, "highest
investment category" shall mean AAA, or if the Rating Agency shall revise or
amend its rating categories, the highest rating category designated by the
Rating Agency. Notwithstanding
<PAGE>
16
anything to the contrary in this Series Supplement or the Agreement, the term
"Rating Agency Condition" shall mean, whenever used in this Series Supplement
or the Agreement with respect to Series 1995-1, that the Rating Agency shall
have notified the Seller, the Servicer and the Custodian in writing that such
action will not result in a reduction or withdrawal of the rating of the
Class A Certificate by the Rating Agency.
(c) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The definitions
in Section 2.1 are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders
of such terms.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provision of this Series
Supplement; references to any Article, Section or Exhibit are references to
Articles, Sections and Exhibits in or to this Series Supplement unless
otherwise specified; and the term "including" means "including without
limitation".
(e) The parties hereto acknowledge and agree that the Series 1995-1
Investor Master Custodial Certificates are created hereunder with the
intention that the Holders thereof will be treated as owners of direct,
undivided ownership interests as tenants in common in the Purchased Property
and in particular that no debtor/creditor relationship is herein created
between the Series 1995-1 Master Custodial Certificateholders and the Seller
or the Custodian. For the purpose of disclosure under the Interest Act
(Canada), if any amount described hereunder as interest is to be calculated
at a rate based on any period of time that is less than a calendar year, then
the yearly rate to which such rate is equivalent is such rate multiplied by
the actual number of days in the calendar year in which such amount is to be
calculated and divided by such period of time.
ARTICLE 3
Servicing Fee
-------------
SECTION 3.1 Servicing Compensation
----------------------
The monthly servicing fee, inclusive of applicable taxes, including
goods and services tax, if any (the "Monthly Servicing Fee"), shall be
payable by the Master Custodial Certificateholders to any Successor Servicer,
other than a Successor Servicer which is an Affiliate of CCCL, in arrears, on
each Distribution Date in respect of any Collection Period (or portion
thereof) occurring prior to the earlier of the Termination Date and the first
Distribution Date on which the Invested Amount is zero, in an amount to be
agreed upon by the Successor Servicer and by the Custodian, as agent for and
on behalf of the Master Custodial Certificateholders; provided, however, that
the Monthly Servicing
<PAGE>
17
Fee shall not exceed an amount equal to one-twelfth of the product of (a) 1%,
(b) the Pool Balance as of the last day of the Collection Period second
preceding such Distribution Date and (c) the Series 1995-1 Allocation
Percentage with respect to the immediately preceding Collection Period. No
Monthly Servicing Fee shall be payable while CCCL or any Affiliate of CCCL is
the Servicer. The share of the Monthly Servicing Fee allocable to the Series
1995-1 Master Custodial Certificateholders with respect to any Distribution
Date (the "Series 1995-1 Monthly Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the Invested
Amount as of the last day of the Collection Period second preceding such
Distribution Date. The remainder of the Monthly Servicing Fee shall be paid
by the Seller and in no event shall the Custodian or the Series 1995-1 Master
Custodial Certificateholders be liable for the share of the Monthly Servicing
Fee to be paid by the Seller; and the remainder of the Servicing Fee shall be
paid by the Seller and the Investor Master Custodial Certificateholders of
other Series and the Series 1995-1 Master Custodial Certificateholders shall
in no event be liable for the share of the Servicing Fee to be paid by the
Seller or the Investor Master Custodial Certificateholders of other Series.
The Series 1995-1 Monthly Servicing Fee shall be payable to the Successor
Servicer solely to the extent amounts are available for distribution in
accordance with the terms of this Series Supplement.
Any Successor Servicer will be permitted, in its sole discretion, to
waive the Monthly Servicing Fee, if any, for any Distribution Date by notice
to the Custodian on or before the related Determination Date; provided that
the Servicer believes that sufficient Collections of Non-Principal
Receivables will be available on any future Distribution Date to pay the
Series 1995-1 Monthly Servicing Fee relating to the waived Monthly Servicing
Fee. If the Servicer so waives the Monthly Servicing Fee for any Distribution
Date, the Monthly Servicing Fee and the Series 1995-1 Monthly Servicing Fee
for such Distribution Date shall be deemed to be zero for all purposes of
this Series Supplement and the Agreement; provided, however, that such Series
1995-1 Monthly Servicing Fee shall be paid on a future Distribution Date
solely to the extent amounts are available therefor pursuant to Section
4.10(b); provided, further that, to the extent any such waived Series 1995-1
Monthly Servicing Fee is so paid, the related portion of the Monthly
Servicing Fee to be paid by the Seller shall be paid by the Seller to the
Servicer.
Pursuant to Section 3.02 of the Agreement, CCCL, as Seller and
initial Servicer, shall pay the Additional Issue Expenses with respect to
Series 1995-1. For the purposes of this Series Supplement and the Agreement,
"Additional Issue Expenses" shall mean, with respect to Series 1995-1 those
specified in each notice in the form of Exhibit D delivered by the Purchasers
hereunder.
<PAGE>
18
ARTICLE 4
Rights of Series 1995-1 Master Custodial
----------------------------------------
Certificateholders and Allocation and Application of Collections
----------------------------------------------------------------
SECTION 4.1 Allocations; Payments to Seller
-------------------------------
(a) Collections of Non-Principal Receivables and Principal
Receivables, Miscellaneous Payments and Defaulted Amounts and unpaid
Adjustment Payments allocated to Series 1995-1 pursuant to Article IV of the
Agreement shall be allocated and distributed as set forth in this Article.
(b) The Servicer shall instruct the Custodian to withdraw from the
Collection Account and pay to the Seller on the dates set forth below the
following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's
Percentage of Allocable Non-Principal
Collections deposited in the Collection Account
on such Deposit Date; and
(B) an amount equal to the Excess Seller's Percentage
of Allocable Principal Collections deposited in
the Collection Account on such Deposit Date, if
the Seller's Invested Amount (determined after
giving effect to the transfer of any Principal
Receivables to the Custodian on such Deposit Date)
exceeds the Custodial Available Subordinated
Amount for the immediately preceding Determination
Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made
on the Distribution Date immediately following
such Determination Date); and
(ii) on each Deposit Date with respect to the Revolving
Period, an amount equal to the Available Seller's Principal
Collections for such Deposit Date, if the Seller's Invested
Amount (determined after giving effect to any Principal
Receivables transferred to the Custodian on such Deposit Date)
exceeds the Custodial Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such
Determination Date); provided, however, that Available
Seller's Principal Collections shall be paid to the Seller
with respect to any Collection Period only after an amount
equal to the sum of (A) the Deficiency Amount, if any,
relating to the immediately preceding
<PAGE>
19
Collection Period and (B) the excess, if any, of the Reserve
Fund Required Amount over the amount in the Reserve Fund on
the immediately preceding Distribution Date (after giving
effect to the allocations of, distributions from, and deposits
in, the Reserve Fund on such Distribution Date), has been
deposited in the Collection Account for the account of Series
1995-1 Certificateholders from such Available Seller's
Principal Collections.
The withdrawals to be made from the Collection Account pursuant to
this Section 4.1(b) do not apply to deposits into the Collection Account that
do not represent Collections, including Miscellaneous Payments, payment of
the purchase price for the Master Custodial Certificateholders' Interest
pursuant to Section 2.03 of the Agreement, and proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 12.02 of the
Agreement.
(c) The Servicer shall instruct the Custodian to withdraw from the
Collection Account and deposit into the Reserve Fund on each Deposit Date
during the Revolving Period Available Seller's Principal Collections for such
Deposit Date, up to the amount of the excess, if any, determined pursuant to
Section 4.1(b)(ii)(B).
SECTION 4.2 Monthly Interest
----------------
(a) The amount of monthly interest ("Class A Monthly Interest") with
respect to the Class A Certificate on any Distribution Date shall be an
amount equal to the product of (i) the Class A Certificate Rate for the
related Interest Period, (ii) the outstanding principal balance of the Class
A Certificate as of the close of business on the preceding Distribution Date
(after giving effect to all repayments of principal made to the Class A
Certificateholder on such preceding Distribution Date, if any) and (iii) a
fraction, the numerator of which is the actual number of days elapsed in such
Interest Period and the denominator of which is 365.
(b) The amount of monthly interest ("Class B Monthly Interest") with
respect to the Class B Certificate on any Distribution Date shall be an
amount equal to the product of (i) the Class B Certificate Rate for the
related Interest Period, (ii) the outstanding principal balance of the Class
B Certificate as of the close of business on the preceding Distribution Date
(after giving effect to all repayments of principal made to the Class B
Certificateholder on such preceding Distribution Date) and (iii) a fraction,
the numerator of which is the actual number of days elapsed in such Interest
Period and the denominator of which is 365.
(c) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest
Shortfall"), of (x) the aggregate Class A Monthly Interest for the Interest
Period applicable to such Distribution Date over (y) the amount which will be
available to be distributed to the Class A Certificateholder on
<PAGE>
20
such Distribution Date in respect thereof pursuant to this Series Supplement.
If the Class A Interest Shortfall with respect to any Distribution Date is
greater than zero, an additional amount ("Additional Class A Interest
Amount") equal to the product of (i) the Class A Certificate Rate for the
Interest Period commencing on the related Distribution Date (or, for
subsequent Interest Periods, the Class A Certificate Rate for such subsequent
Interest Periods), (ii) such Interest Shortfall (or the portion thereof which
has not been paid) and (iii) a fraction, the numerator of which is the actual
number of days elapsed in such Interest Period (or in a subsequent Interest
Period) and the denominator of which is 365, shall be payable as provided
herein with respect to the Class A Certificate on each Distribution Date
following such Distribution Date to and including the Distribution Date on
which such Class A Interest Shortfall is paid. Notwithstanding anything to
the contrary herein, the Additional Class A Interest Amount shall be payable
or distributed to the Class A Certificateholder only to the extent permitted
by applicable law.
(d) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Carry-over
Shortfall"), of (x) the Class A Carry-over Amount, if any, for such
Distribution Date over (y) the amount which will be available to be
distributed in respect thereof to the Class A Certificateholder on such
Distribution Date pursuant to this Series Supplement. If the Class A
Carry-over Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Additional Class A Carry-over Amount") equal to
the product of (i) the Class A Certificate Rate (calculated pursuant to
clause (a) of the definition thereof) for the Interest Period commencing on
the related Distribution Date (or, for subsequent Interest Periods, the Class
A Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for such subsequent Interest Periods), (ii) such Class A Carry-over
Shortfall (or the portion thereof which has not been paid) and (iii) a
fraction, the numerator of which is the actual number of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 365, shall be payable as provided herein with respect to the Class A
Certificate on each Distribution Date following such Distribution Date to the
Distribution Date on which such Class A Carry-over Shortfall is paid.
Notwithstanding anything to the contrary herein, any Additional Class A
Carry-over Amount shall be payable or distributed to the Class A
Certificateholder only to the extent permitted by applicable law.
(e) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest
Shortfall"), of (x) the aggregate Class B Monthly Interest for the Interest
Period applicable to such Distribution Date over (y) the amount which will be
available to be distributed to the Class B Certificateholder on such
Distribution Date in respect thereof pursuant to this Series Supplement. If
the Class B Interest Shortfall with respect to any Distribution Date is
greater than zero, an additional amount ("Additional Class B Interest
Amount") equal to the product of (i) the Class B Certificate Rate for the
Interest Period commencing on the related Distribution Date (or, for
subsequent Interest Periods, the Class B Certificate Rate for such subsequent
Interest Periods), (ii) such Class B Interest Shortfall (or the portion thereof
which has not been
<PAGE>
21
paid) and (iii) a fraction, the numerator of which is the actual number of
days elapsed in such Interest Period (or in a subsequent Interest Period) and
the denominator of which is 365, shall be payable as provided herein with
respect to the Class B Certificate on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class
B Interest Shortfall is paid. Notwithstanding anything to the contrary
herein, the Additional Class B Interest Amount shall be payable or
distributed to the Class B Certificateholder only to the extent permitted by
applicable law.
(f) On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Carry-over
Shortfall"), of (x) the Class B Carry-over Amount, if any, for such
Distribution Date over (y) the amount which will be available to be
distributed in respect thereof to the Class B Certificateholder on such
Distribution Date pursuant to this Series Supplement. If the Class B
Carry-over Shortfall on any Distribution Date is greater than zero, an
additional amount (the "Additional Class B Carry-over Amount") equal to the
product of (i) the Class B Certificate Rate (calculated pursuant to clause
(a) of the definition thereof) for the Interest Period commencing on the
related Distribution Date (or, for subsequent Interest Periods, the Class B
Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for such subsequent Interest Periods), (ii) such Class B Carry-over
Shortfall (or the portion thereof which has not been paid), and (iii) a
fraction, the numerator of which is the actual number of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 365, shall be payable as provided herein with respect to the Class B
Certificate on each Distribution Date following such Distribution Date to the
Distribution Date on which such Class B Carry-over Shortfall is paid.
Notwithstanding anything to the contrary herein, any Additional Class B
Carry-over Amount shall be payable or distributed to the Class B
Certificateholder only to the extent permitted by applicable law.
SECTION 4.3 Determination of Monthly Principal
----------------------------------
The amount of monthly principal ("Monthly Principal") distributable
with respect to the Series 1995-1 Investor Master Custodial Certificates on
each Distribution Date with respect to the Revolving Period, on each
Distribution Date with respect to any Series 1995- 1 Early Amortization
Period and on each Controlled Amortization Period Principal Distribution Date
with respect to the Controlled Amortization Period shall be equal to the
Available Investor Principal Collections with respect to such Distribution
Date; provided, however, that for each Distribution Date during the Revolving
Period, Monthly Principal shall not exceed the Required Initial Invested
Amount Reduction Amount, and provided, further, that for each Controlled
Amortization Period Principal Distribution Date, Monthly Principal shall not
exceed the Controlled Distribution Amount for such Distribution Date; and
provided further that Monthly Principal shall not exceed the outstanding
principal balance of the Series 1995-1 Investor Master Custodial
Certificates.
<PAGE>
22
SECTION 4.4 Establishment of Spread Shortfall Account,
Reserve Fund, Yield Supplement
Account and Principal Funding Account
-------------------------------------
(a) (i) The Custodian, as agent for and on behalf of the Series
1995-1 Master Custodial Certificateholders, shall cause to be established and
maintained at the Custodian an Eligible Deposit Account (the "Spread
Shortfall Account"), which shall be identified as the "Spread Shortfall
Account for the Master Custodial and Servicing Agreement, Series 1995-1" and
shall bear a designation clearly indicating that the funds deposited therein
belong to the Series 1995-1 Master Custodial Certificateholders and to CFC as
their interests may appear herein.
(ii) At the direction of the Servicer, funds on deposit in the
Spread Shortfall Account shall be invested by the Custodian in Eligible
Investments selected by the Servicer that will mature so that such funds will
be available on/or before the close of business on the Business Day preceding
the next following Distribution Date. All such Eligible Investments shall be
held by the Custodian as agent for and on behalf of the Series 1995-1 Master
Certificateholders and CFC as their interests appear herein. On each
Distribution Date all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Spread Shortfall Account
shall be applied as set forth in Section 4.6(a) and 4.10 of this Series
Supplement.
(b) (i) The Custodian, as agent for and on behalf of the Series
1995-1 Master Custodial Certificateholders, shall cause to be established and
maintained at the Custodian an Eligible Deposit Account (the "Reserve Fund")
which shall be identified as the "Reserve Fund for the Master Custodial and
Servicing Agreement, Series 1995-1" and shall bear a designation clearly
indicating that the funds deposited therein belong to the Series 1995-1
Master Custodial Certificateholders and to the Seller as their interests
appear herein. On the Closing Date, the Seller shall cause to be deposited in
the Reserve Fund the Initial Reserve Fund Deposit Amount. On each Invested
Amount Increase Date, the Seller shall cause to be deposited in the Reserve
Fund an amount sufficient to make the amount on deposit in the Reserve Fund
equal to the Reserve Fund Required Amount.
(ii) At the direction of the Servicer, funds on deposit in the
Reserve Fund shall be invested by the Custodian in Eligible Investments
selected by the Servicer that will mature so that such funds will be
available at the close of business on or before the Business Day next
preceding the following Distribution Date. All Eligible Investments shall be
held by the Custodian as agent for and on behalf of the Series 1995-1 Master
Custodial Certificateholders and the Seller as their interests appear herein.
On each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Fund
received prior to such Distribution Date shall be applied as set forth in
Section 4.6(a) of this Series Supplement. Funds deposited in
<PAGE>
23
in the Reserve Fund on a Business Day (which immediately precedes a
Distribution Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.
(c) (i) The Custodian, as agent for and on behalf of the Series
1995-1 Master Custodial Certificateholders, shall establish and maintain at
the Custodian an Eligible Deposit Account (the "Yield Supplement Account"),
which shall be identified as the "Yield Supplement Account for the Master
Custodial and Servicing Agreement, Series 1995-1" and shall bear a
designation clearly indicating that the funds deposited therein belong to the
Series 1995-1 Master Custodial Certificateholders and to the Seller as their
interests appear herein. On the Closing Date, the Seller shall cause to be
deposited into the Yield Supplement Account the Initial Yield Supplement
Account Deposit Amount. On each Invested Amount Increase Date, the Seller
shall cause to be deposited in the Yield Supplement Account an amount
sufficient to make the amount on deposit in the Yield Supplement Account
equal to the Yield Supplement Account Required Amount.
(ii) At the direction of the Servicer, funds on deposit in the
Yield Supplement Account shall be invested by the Custodian in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Custodian as agent for and on behalf of the Series 1995-1 Master
Custodial Certificateholders and the Seller as their interests appear herein.
On each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Yield Supplement
Account shall be applied as set forth in Section 4.6(a) of this Series
Supplement. Funds deposited in the Yield Supplement Account on any
Distribution Date shall be invested at the direction of the Servicer in
Eligible Investments that will mature so that such funds will be available on
or before the close of business on the Business Day preceding the next
following Distribution Date. Funds deposited in the Yield Supplement Account
on a Business Day (which immediately precedes a Distribution Date) upon the
maturity of any Eligible Investments are not required to be invested
overnight.
(d) (i) The Custodian, as agent for and on behalf of the Series
1995-1 Master Custodial Certificateholders, shall establish and maintain at
the Custodian an Eligible Deposit Account (the "Principal Funding Account")
which shall be identified as the "Principal Funding Account for the Master
Custodial and Servicing Agreement, Series 1995-1" and shall bear a
designation clearly indicating that the funds deposited therein belong to the
Series 1995-1 Master Custodial Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the
Principal Funding Account shall be invested by the Custodian in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Custodian as agent for and on behalf of the Series 1995-1 Master
Custodial Certificateholders. On each Distribution Date all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit therein shall be applied as set forth in Section 4.6(a) of this
Series Supplement. Funds on deposit in the Principal Funding Account shall be
invested at the direction of the
<PAGE>
23
Servicer in Eligible Investments that will mature so that such funds will be
available on or before the close of business on the Business Day next
preceding the following Distribution Date. Funds deposited in the Principal
Funding Account on a Business Day (which immediately precedes the applicable
Distribution Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.
(e) (i) The Series 1995-1 Master Custodial Certificateholders shall
possess all right, title and interest in and to all funds on deposit from
time to time in, and all Eligible Investments credited to, the Spread
Shortfall Account, the Reserve Fund, the Yield Supplement Account and the
Principal Funding Account (collectively, the "Series 1995-1 Accounts") and in
all proceeds thereof, except to the extent of the interest of the Seller
therein to the extent expressly set forth in this Series Supplement. The
Series 1995- 1 Master Custodial Certificateholders agree, by acceptance of
their Master Custodial Certificates and without further action, that all such
funds and Eligible Investments shall be maintained, invested and disbursed in
accordance with this Series Supplement and the Series 1995-1 Master Custodial
Certificateholders hereby authorize and empower the Custodian and the
Servicer to maintain, invest and disburse such funds and Eligible Investments
in accordance with this Series Supplement. If, at any time, any of the Series
1995-1 Accounts ceases to be an Eligible Deposit Account, the Custodian (or
the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Series 1995-1 Account meeting the conditions
specified in paragraph (a)(i), (b)(i) or (c)(i) or (d)(i) above, as
applicable, as an Eligible Deposit Account and shall transfer any cash and/or
any investments to such new Series 1995-1 Account. None of the Seller, the
Servicer, the Custodian nor any person or entity claiming by, through or
under the Seller, the Servicer, the Custodian or any such person or entity
shall have any right, title or interest in, or any right to withdraw any
amount from, any Series 1995-1 Account, except as expressly provided herein.
The account number of each Series 1995-1 Account, the account designation of
each such account and the name of the institution with which such account has
been established shall be as set forth in Exhibit E attached hereto. If a
substitute Series 1995-1 Account is established pursuant to this Section or
if any information set forth in Exhibit E should change, the Servicer prior
to making any deposits therein shall provide to the Custodian an amended
Exhibit E, setting forth the relevant information for such substitute Series
1995-1 Account.
(ii) Pursuant to the authority granted to the Servicer in
Section 3.01(a) of the Agreement, the Servicer shall have the power,
revocable by the Custodian, to make withdrawals and payments or to instruct
the Custodian to make withdrawals and payments from the Series 1995-1
Accounts for the purposes of carrying out the Servicer's or Custodian's
duties hereunder.
(f) Unless otherwise agreed to by the Rating Agencies, at no time may
Eligible Investments in a principal amount equal to more than 10% of the
outstanding principal
<PAGE>
25
balance of the Series 1995-1 Investor Master Custodial Certificates be
invested in Eligible Investments (other than obligations of the Canadian
government) of any single entity or its Affiliates.
SECTION 4.5 Deficiency Amount
-----------------
With respect to each Distribution Date, on the related Determination
Date, the Servicer shall determine the amount (the "Deficiency Amount"), if
any, by which (a) the sum of (i) Monthly Interest for such Distribution Date,
(ii) Monthly Interest previously due but not distributed to the Series 1995-1
Master Custodial Certificateholders on a prior Distribution Date, (iii)
Additional Interest Amount, if any, for such Distribution Date and any
Additional Interest Amount previously due but not distributed to the Series
1995-1 Master Custodial Certificateholders on a prior Distribution Date, (iv)
the Series 1995-1 Monthly Servicing Fee, if any, for such Distribution Date,
(v) the Investor Default Amount, if any, for such Distribution Date, (vi) the
Series 1995-1 Allocation Percentage of the amount of any Adjustment Payment
required to be deposited in the Collection Account pursuant to Section
3.09(a) of the Agreement with respect to the related Collection Period that
has not been so deposited as of such Determination Date, and (vii) if such
Distribution Date constitutes the earlier of the Final Payment Date and the
Termination Date, the sum of (A) the amount of any Carry-over Amount for such
Distribution Date, (B) the amount of any Carry-over Amount previously due but
not previously distributed to relevant Series 1995-1 Certificateholders on a
prior Distribution Date, (C) the amount of any Additional Carry-over Amount
for such Distribution Date and (D) the amount of any Additional Carry-over
Amount previously due but not previously paid to relevant Series 1995-1
Certificateholders on a prior Distribution Date, in each case that will not
be satisfied on such date by application, pursuant to Section 4.8(c), of
amounts on deposit in the Yield Supplement Account, exceeds (b) the sum of
(i) Investor Non-Principal Collections for such Distribution Date, Available
Seller's Non-Principal Collections for such Distribution Date and any
Investment Proceeds with respect to such Distribution Date and (ii) the
amount of funds in the Spread Shortfall Account which are available pursuant
to Section 4.8(a) to cover the Spread Shortfall Amount and (iii) the amount
of funds in the Reserve Fund which are available pursuant to Section 4.8(b)
to cover any portion of the Deficiency Amount. The lesser of the Deficiency
Amount and the Available Subordinated Amount shall be the "Required
Subordination Draw Amount".
SECTION 4.6 Application of Investor Non-Principal Collections, Available
Seller's Non-Principal Collections, Investment Proceeds,
Available Investor Principal Collections and Subordination of
Class B Certificate
-------------------------------------------------------------
The Servicer shall cause the Custodian to apply, on each Distribution
Date, Investor Non-Principal Collections, Available Seller's Non-Principal
Collections, Investment Proceeds and Available Investor Principal Collections
to make the following distributions:
<PAGE>
26
(a) On each Distribution Date, an amount equal to the sum of Investor
Non-Principal Collections, Available Seller's Non-Principal Collections and
any Investment Proceeds with respect to such Distribution Date will be
distributed in the following priority:
(i) first, an amount equal to Class A Monthly Interest for
such Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholder on a
prior Distribution Date, plus the amount of any Class A Additional Interest
Amount for such Distribution Date and any Class A Additional Interest Amount
previously due but not distributed to the Class A Certificateholder on a
prior Distribution Date, shall be distributed to the Class A
Certificateholder in accordance with Section 4.7(a);
(ii) second, an amount equal to the Series 1995-1 Monthly
Servicing Fee, if any, for such Distribution Date shall be distributed to the
Successor Servicer (unless such amount has been netted against deposits to
the Collection Account or waived);
(iii) third, an amount equal to the Investor Default Amount
for such Distribution Date shall be distributed in the same manner and
treated as a portion of Investor Principal Collections for such Distribution
Date;
(iv) fourth, an amount equal to the Reserve Fund Deposit
Amount, if any, for such Distribution Date shall be deposited in the Reserve
Fund;
(v) fifth, an amount equal to the Class A Carry-over Amount,
if any, for such Distribution Date, plus the amount of any Class A Carry-over
Amounts previously due but not distributed to the Class A Certificateholder
on a prior Distribution Date, plus the amount of any Additional Class A
Carry-over Amount for such Distribution Date and any Additional Class A
Carry-over Amounts previously due but not distributed to the Class A
Certificateholder on a prior Distribution Date shall be distributed to the
Class A Certificateholder in accordance with Section 4.7(a);
(vi) sixth, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be deposited in the
Yield Supplement Account. Thereafter, but only if on or before such
Distribution Date the rating of the long-term unsecured debt of CFC is
lowered below BBB- by Standard & Poor's (or withdrawn by Standard & Poor's),
an amount equal to the Spread Shortfall Required Amount shall be deposited in
the Spread Shortfall Account.
(vii) seventh, an amount equal to Class B Monthly Interest for
such Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not distributed to the Class B Certificateholder on a
prior Distribution Date, plus the amount of any Class B Additional Interest
Amount for such Distribution Date and any Class B
<PAGE>
27
Additional Interest Amount previously due but not distributed to the Class B
Certificateholder on a prior Distribution Date, shall be distributed to the
Class B Certificateholder in accordance with Section 4.7(a);
(viii) eighth, an amount equal to the Class B Carry-over
Amount, if any, for such Distribution Date, plus the amount of any Class B
Carry-over Amount previously due but not distributed to the Class B
Certificateholder on a prior Distribution Date, plus the amount of any
Additional Class B Carry-over Amount for such Distribution Date and any
Additional Class B Carry-over Amount, previously due but not distributed to
the Class B Certificateholder on a prior Distribution Date shall be
distributed to the Class B Certificateholder in accordance with Section
4.7(a);
(ix) ninth, the balance, if any, shall constitute Excess
Income and shall be allocated and distributed as set forth in Section 4.10.
(b) On each Distribution Date with respect to the Revolving Period,
an amount equal to the Available Investor Principal Collections will be
distributed in the following priority: (i) first, an amount equal to the
Required Initial Invested Amount Reduction Amount, together with all Required
Initial Invested Amount Reduction Amounts not previously distributed to the
Class A Certificateholder on a prior Distribution Date shall be distributed
to the Class A Certificateholder, and (ii) second, an amount equal to the
balance, if any, of such amount of Available Investor Principal Collections
not so distributed in (i) above shall be treated as Excess Principal
Collections and applied in accordance with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to a Series 1995-1 Early
Amortization Period or on each Controlled Amortization Period Principal
Distribution Date with respect to the Controlled Amortization Period, an
amount equal to Available Investor Principal Collections will be distributed
in the following priority:
(i) first, an amount equal to Monthly Principal for such
Distribution Date (or, in the case of an Controlled Amortization Period, such
Controlled Amortization Period Principal Distribution Date) shall be
deposited by the Servicer or the Custodian into the Principal Funding
Account; and
(ii) second, for each Controlled Amortization Period Principal
Distribution Date with respect to the Controlled Amortization Period unless a
Series 1995- 1 Early Amortization Event has occurred, after giving effect to
the transactions referred to in clause (i) above, an amount equal to the
balance, if any, of such Available Investor Principal Collections shall be
treated as Excess Principal Collections and applied in accordance with
Section 4.04 of the Agreement and Section 4.11 hereof.
<PAGE>
28
(d) Except as specifically provided in this Series Supplement, the
Class B Certificate is hereby made subordinate and junior in right of payment
to the Class A Certificate. Except as so provided, upon any payment from the
Collection Account or the Principal Funding Account, no amount shall be paid
by the Servicer or the Custodian, nor shall the Class B Certificateholder
take or receive any payment from the Servicer, the Seller or the Custodian in
respect of the principal or interest on such Class B Certificate unless and
until the principal of such Class A Certificate which shall be then due and
payable and all Class A Monthly Interest, Additional Class A Interest Amount,
Class A Carry-over Amount or Additional Class A Carry-over Amount thereon
which shall be then due and payable shall have been paid in full (or such
payment shall have been duly provided for).
(e) If, notwithstanding the provisions of Section 4.6(d), any payment
or distribution shall be received by the Class B Certificateholder before all
principal and interest owing on the Class A Certificate shall have been paid
in full in accordance with the terms thereof, such payment or distribution
shall be held by the Class B Certificateholder in trust for the benefit of,
and shall be paid over or delivered to, the Class A Certificateholder,
rateably according to the aggregate amount remaining unpaid on the Class A
Certificate held by each, to the extent necessary to pay or satisfy all
principal and interest owing thereon in full, in accordance with the terms
thereof.
SECTION 4.7 Distributions to Series 1995-1 Master Custodial
Certificateholders.
-----------------------------------------------
(a) The Servicer shall cause the Custodian to make the following
distributions at the following times from the Collection Account, the Spread
Shortfall Account, the Reserve Fund, the Yield Supplement Account and the
Principal Funding Account:
(i) on each Distribution Date, all amounts on deposit in the
Collection Account, the Spread Shortfall Account, the Reserve Fund or the
Yield Supplement Account as are payable to the Series 1995-1 Master Custodial
Certificateholders with respect to Monthly Interest, Additional Interest
Amount, any Carry-over Amount or Additional Carry-over Amount will be
distributed to the relevant Series 1995-1 Master Custodial
Certificateholders;
(ii) on each Special Payment Date, all amounts on deposit in
the Principal Funding Account, up to a maximum amount on any such day equal
to the excess of the outstanding principal balance of the Series 1995-1
Investor Master Custodial Certificates over the amount of unreimbursed
Investor Charge-Offs, will be distributed to the Series 1995-1 Master
Custodial Certificateholders, provided, however, that no amount shall be paid
under this Section 4.7(a)(ii) by the Servicer or the Custodian to the Class B
Certificateholder, nor shall the Class B Certificateholder take or receive
from the Custodian or the Servicer any amount under this Section 4.7(a)(ii)
until the outstanding principal balance of the Class A Certificate has been
reduced to zero; and
<PAGE>
29
(iii) on each Controlled Amortization Period Principal
Distribution Date, the Controlled Distribution Amount, and on each Invested
Amount Reduction Date, the Required Initial Invested Amount Reduction Amount,
will be distributed to the Series 1995-1 Master Custodial Certificateholders
from amounts on deposit in the Principal Funding Account to the extent
available therein, provided, however, that no amount shall be paid under this
Section 4.7(a)(iii) by the Servicer or the Custodian to the Class B
Certificateholder, nor shall the Class B Certificateholder take or receive
from the Custodian or the Servicer any amount under this Section 4.7(a)(iii)
until, in the case of a Controlled Amortization Period Principal Distribution
Date, the Class A Certificateholder shall have received that portion of the
Controlled Distribution Amount attributable to it and, in the case of an
Invested Amount Reduction Date, the Class A Certificateholder shall have
received that portion of the Required Initial Invested Amount Reduction
Amount attributable to it.
(b) The distributions to be made pursuant to Section 4.7(a) are
subject to the provisions of Sections 2.03, 10.01 and 12.02 of the Agreement
and Section 8.1 of this Series Supplement.
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, to the extent there are any amounts owing to the
Series 1995-1 Master Custodial Certificateholders hereunder subsequent to the
reduction of the outstanding principal balance of the Series 1995-1 Investor
Master Custodial Certificates to zero, such amounts shall be distributed to
the Series 1995-1 Master Custodial Certificateholders from Available Seller's
Collections.
SECTION 4.8 Application of Spread Shortfall Guarantee Amount, Reserve
Fund, Available Subordinated Amount, Yield Supplement
Account and Subordination of Class B Certificate
------------------------------------------------------
(a) If the portion of Investor Non-Principal Collections, Available
Seller's Non-Principal Collections and Investment Proceeds allocated to
Series 1995-1 Master Custodial Certificateholders on any Distribution Date is
not sufficient to make the entire distributions contemplated by Section
4.6(a), plus sufficient Excess Income to make the entire distributions, if
any, contemplated by Section 4.10, the Servicer shall, on the related
Determination Date, cause the Custodian to notify CFC of such fact and the
amount of such shortfall (the "Spread Shortfall Amount") and CFC shall on the
Distribution Date deposit to the Spread Shortfall Account the lesser of the
Spread Shortfall Amount and the Spread Shortfall Guarantee Amount. On such
Distribution Date, the Servicer shall cause the Custodian to withdraw funds
from the Spread Shortfall Account in the amount of the Spread Shortfall
Amount and apply such funds to complete the distributions pursuant to Section
4.6(a) in the order of priority set out therein and thereafter pursuant to
Section 4.10 in the order of priority set out therein. On the Termination
Date, any funds in the Spread Shortfall Account will be treated as Available
Investor Principal Collections.
<PAGE>
30
(b) If the portion of Investor Non-Principal Collections, Available
Seller's Non-Principal Collections and Investment Proceeds allocated to
Series 1995-1 Master Custodial Certificateholders on any Distribution Date
pursuant to Section 4.6(a) is not sufficient to make the entire distributions
required on such Distribution Date by Sections 4.6(a)(i), (ii) and (iii), the
Servicer shall cause the Custodian to withdraw funds from the Reserve Fund,
to the extent available therein, and apply such funds to complete the
distributions pursuant to Sections 4.6(a)(i), (ii) and (iii) in that order of
priority; provided, however, that during a Series 1995-1 Early Amortization
Period (other than a Series 1995-1 Early Amortization Period which has ended
as described in clause (c) of the definition of Early Amortization Period)
funds shall not be withdrawn from the Reserve Fund to make distributions
otherwise required by Section 4.6(a)(iii) to the extent that, after giving
effect to such withdrawal, the amount on deposit in the Reserve Fund shall be
less than the product of (x) 0.25% and (y) the outstanding balance of the
Series 1995-1 Investor Master Custodial Certificates.
(c) If there is a Required Subordination Draw Amount for such
Distribution Date, and such Distribution Date is not the earlier of the Final
Payment Date and the Termination Date, the Servicer shall apply or cause the
Custodian to apply the Available Seller's Principal Collections on deposit in
the Collection Account on such Distribution Date, but only up to the amount
of the Required Subordination Draw Amount, to make the distributions required
by Sections 4.6(a)(i), (ii) and (iii) that have not been made through the
application of funds from the Reserve Fund in accordance with the preceding
paragraph. If there is a Required Subordination Draw Amount for such
Distribution Date, and such Distribution Date is the Final Payment Date, the
Servicer shall apply or cause the Custodian to apply the Available Seller's
Collections on deposit in the Collection Account on such Distribution Date,
but only up to the amount of the Required Subordination Draw Amount, to make
the distributions required by Sections 4.6(a)(i), (ii), (iii) and (v) that
have not been made through the application of funds from the Reserve Fund in
accordance with Section 4.8(e). Any such Available Seller's Principal
Collections remaining after the application thereof pursuant to the first or
second preceding sentence, as applicable, and any Available Seller's
Non-Principal Collections remaining after the application thereof pursuant to
Section 4.8(b) shall be treated as a portion of Investor Principal
Collections for such Distribution Date, but only up to the amount of unpaid
Adjustment Payments allocated to Series 1995-1 as described in Section
4.5(a)(vi). The amount of the Available Seller's Principal Collections
applied in accordance with the first two sentences of this section shall
reduce the Available Subordinated Amount as described in clause (I) of the
definition thereof. If the Required Subordination Draw Amount exceeds
Available Seller's Collections for such Distribution Date, the Available
Subordinated Amount shall be further reduced by the amount of such excess,
but not by more than the sum of (x) the Investor Default Amount and (y) an
amount of unpaid Adjustment Payments allocated to Series 1995-1 as described
in Section 4.5(a)(vi).
<PAGE>
31
(d) If, on any Distribution Date there is a Carry-over Amount
remaining after the application of Section 4.6(a), the Servicer shall cause
the Custodian to apply the amounts on deposit, to the extent available, in
the Yield Supplement Account up to the amount of such remaining Carry-over
Amount to satisfy such Carry-over Amount. If, after the application of
amounts on deposit in the Yield Supplement Account, there remains a Class A
Carry-over Amount which is not satisfied, the Servicer shall cause the
Custodian to apply amounts otherwise payable to the Class B Certificateholder
pursuant to Section 4.6(a) to satisfy such Class A Carry-over Amount.
(e) If, after giving effect to the allocations of, distributions
from, and deposits in, the Reserve Fund made pursuant to Sections 4.1(c),
4.4, 4.6(a) and 4.8(b), the amount in the Reserve Fund is greater than the
Reserve Fund Required Amount (or, for any Distribution Date with respect to a
Series 1995-1 Early Amortization Period, the Excess Reserve Fund Required
Amount) for such Distribution Date, the Servicer shall cause the Custodian to
distribute such excess amount to the Seller, subject to the proviso contained
in Section 4.8(i). On the Termination Date, any funds in the Reserve Fund
will be treated as Available Investor Principal Collections. Upon payment in
full of the outstanding principal balance of the Series 1995-1 Investor
Master Custodial Certificates, any funds remaining on deposit in the Reserve
Fund shall be paid to the Seller.
(f) If, for any Distribution Date with respect to a Series 1995-1
Early Amortization Period, after giving effect to the allocations of,
distributions from, and deposits in, the Reserve Fund made pursuant to
Sections 4.1(c), 4.4, 4.6(a) and 4.8(b), the amount in the Reserve Fund is
less than the Excess Reserve Fund Required Amount for such Distribution Date,
the Custodian shall deposit any remaining Available Seller's Collections on
deposit in the Collection Account for such Distribution Date into the Reserve
Fund until the amount in the Reserve Fund is equal to such Excess Reserve
Fund Required Amount.
(g) If, after giving effect to the allocations of, distributions
from, and deposits in, the Yield Supplement Account made pursuant to Sections
4.6(a) and 4.8(d) the amount in the Yield Supplement Account is greater than
the Yield Supplement Account Required Amount for such Distribution Date,
other than during a Series 1995-1 Early Amortization Period (other than a
Series 1995-1 Early Amortization Period which has ended as described in
clause (c) of the definition of Early Amortization Period), the Servicer
shall cause the Custodian to distribute such excess amount to the Seller,
subject to the proviso contained in Section 4.8(i). On the Termination Date,
any funds in the Yield Supplement Account will be treated as Available
Investor Principal Collections. Upon payment in full of the outstanding
principal balance of the Series 1995-1 Investor Master Custodial
Certificates, any funds remaining on deposit in the Yield Supplement Account
shall be paid to the Seller.
<PAGE>
32
(h) If, on the Final Payment Date, after giving effect to (g) above,
there is a Carry-over Amount or Additional Carry-over Amount after giving
effect to withdrawals from the Yield Supplement Account on such date, the
Servicer shall cause the Custodian to withdraw funds in the amount of such
Carry-over Amount or Additional Carry-over Amount from the Spread Shortfall
Account and the Reserve Fund (to the extent available therein), and
distribute such funds to the Series 1995-1 Master Custodial
Certificateholders, first to pay any Class A Carry-over Amount or Additional
Class A Carry-over Amount and second to pay any Class B Carry-over Amount or
Additional Class B Carry-over Amount. Any funds remaining on deposit in the
Reserve Fund after the earlier of (i) payment in full of the outstanding
principal balance of the Series 1995-1 Investor Master Custodial Certificates
and (ii) the Termination Date shall be paid to the Seller. Any funds
remaining on deposit in the Spread Shortfall Account after the earlier of (i)
payment in full of the outstanding principal balance of the Series 1995-1
Master Custodial Certificates and (ii) the Termination Date shall,
notwithstanding Section 12.03 of the Agreement, be paid to CFC and the Seller
to the extent of their respective interests therein as determined by CFC and
the Seller.
(i) The balance of Available Seller's Collections on any Distribution
Date, after giving effect to any distributions thereof pursuant to Section
4.6 and this Section 4.8(a), (b), (d), (e), (f), (g) and (h) shall be
distributed to the Seller on such Distribution Date; provided that, in the
case of any remaining Available Seller's Collections (or funds on deposit in
the Reserve Fund or the Yield Supplement Account), if the Custodial Available
Subordinated Amount for the immediately preceding Determination Date exceeds
the Seller's Invested Amount on such date (determined after giving effect to
any Principal Receivables transferred to the Custodian on such Distribution
Date), such remaining Available Seller's Collections (or funds) shall be paid
to the Seller only at the time the Seller's Invested Amount exceeds the
Custodial Available Subordinated Amount for the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the following Distribution Date).
SECTION 4.9 Investor Charge-Offs
--------------------
If, on any Distribution Date on which the Available Subordinated
Amount on the preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date) is zero and the Deficiency Amount for such Distribution
Date is greater than zero, the Invested Amount shall be reduced by the amount
("Investor Charge-Offs") of the excess of such Deficiency Amount over any
remaining Available Subordinated Amount on such Determination Date, but not
by more than the Investor Default Amount. Investor Charge-Offs shall
thereafter be reimbursed and the Invested Amount increased (but not by an
amount in excess of the aggregate unreimbursed Investor Charge-Offs on any
Distribution Date) by the sum of (a) Allocable Miscellaneous Payments with
respect to such Distribution Date and (b) the
<PAGE>
33
amount of Excess Income allocated and available for that purpose pursuant to
Section 4.10(a).
SECTION 4.10 Excess Income
-------------
The Servicer shall cause the Custodian to apply, on each Distribution
Date, Excess Income with respect to the Collection Period immediately
preceding such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the aggregate amount of Investor Charge-Offs
which have not been previously reimbursed as provided in Section 4.9 (after
giving effect to the allocation on such Distribution Date of any amount for
that purpose pursuant to Section 4.9) shall be treated as a portion of
Investor Principal Collections with respect to such Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of the
Series 1995-1 Monthly Servicing Fee, if any, which have been previously
waived pursuant to Section 3.1 shall be distributed to the Servicer; and
(c) the balance, if any, shall be distributed to the Seller.
SECTION 4.11 Excess Principal Collections
----------------------------
(a) That portion of Excess Principal Collections for any Distribution
Date equal to the amount of Series 1995-1 Excess Principal Collections for
such Distribution Date will be allocated to Series 1995-1 and will be
distributed as set forth in this Series Supplement.
(b) Series 1995-1 Excess Principal Collections, with respect to any
Distribution Date, shall mean an amount equal to the Series 1995-1 Principal
Shortfall for such Distribution Date; provided, however, that, if the
aggregate amount of Excess Principal Collections for all Series for such
Distribution Date is less than the aggregate amount of Principal Shortfalls
for all Series for such Distribution Date, then Series 1995-1 Excess
Principal Collections for such Distribution Date shall equal the product of
(x) Excess Principal Collections for all Series for such Distribution Date
and (y) a fraction, the numerator of which is the Series 1995-1 Principal
Shortfall for such Distribution Date and the denominator of which is the
aggregate amount of Principal Shortfalls for all Series for such Distribution
Date. The Series 1995-1 Principal Shortfall, with respect to any Distribution
Date, shall equal the excess of (i) (x) for any Controlled Amortization
Period Principal Distribution Date, the Controlled Distribution Amount or (y)
for any Distribution Date with respect to a Series 1995-1 Early Amortization
Period, the Invested Amount, or (z) for any Invested Amount Reduction Date,
the Required Initial Invested Amount Reduction Amount over (ii) Available
Investor Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Excess Principal Collections).
<PAGE>
34
SECTION 4.12 Increases or Decreases in Invested Amount
-----------------------------------------
(a) If at the close of business on the last day of any Collection
Period during the Revolving Period or Controlled Amortization Period the Pool
Balance as of such day is less than the Required Participation Amount as of
the following Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date
but prior to giving effect to any change therein as a result of the
provisions of this Section 4.12 and the corresponding provisions of any other
Supplement), then on the first Determination Date following the end of such
Collection Period, the Servicer shall, subject to the provisions set forth
below in Section 4.12(b), instruct the Custodian (and notify the Purchasers
thereof) to withdraw from the Collection Account and deposit in the Principal
Funding Account from the amounts to be paid to the Seller pursuant to Section
4.04(b) of the Agreement (or from Unallocated Principal Collections), on the
immediately succeeding Distribution Date (an "Invested Amount Reduction
Date"), an amount equal to the Required Initial Invested Amount Reduction
Amount. In connection with the foregoing, the Seller shall endeavour (taking
into account any seasonality experienced in the Accounts) to minimize the
frequency and amounts of Required Initial Invested Amount Reduction Amounts.
(b) If at the close of business on the last day of any Collection
Period during the Revolving Period, the Pool Balance as of such day is
greater than the Required Participation Amount as of the following
Distribution Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date but prior to
giving effect to any change therein as a result of the provisions of this
Section 4.12 and the corresponding provisions of any other Supplement), then
on the first Determination Date following the end of such Collection Period,
the Servicer shall notify the Purchasers, the Custodian and the Seller of the
Required Initial Invested Amount Increase Amount, and on the immediately
succeeding Distribution Date (an "Invested Amount Increase Date") the Class A
Certificateholder shall deposit to the Principal Funding Account and the
Servicer shall instruct the Custodian to withdraw from the Principal Funding
Account an amount equal to the Required Initial Invested Amount Increase
Amount. Such Principal Funding Account withdrawal shall be in payment or
partial payment for additional Principal Receivables transferred to the
Custodian or allocated to Series 1995-1 and shall be treated as Excess
Principal Collections.
(c) Any Required Initial Invested Amount Reduction Amount and any
Required Initial Invested Amount Increase Amount (other than a Required
Initial Invested Amount Increase arising pursuant to a request to increase
the Maximum Initial Invested Amount under Exhibit D) shall be borne by the
Class A Certificateholder.
<PAGE>
35
ARTICLE 5
Distributions and Reports
to Series 1995-1 Master Custodial Certificateholders
----------------------------------------------------
SECTION 5.1 Distributions
-------------
(a) On each Distribution Date, the Servicer shall cause the Custodian
to distribute to each Series 1995-1 Master Custodial Certificateholder of
record on the preceding Record Date (other than as provided in Section 12.02
of the Agreement respecting a final distribution) such Series 1995-1 Master
Custodial Certificateholder's pro rata share (based on the undivided
ownership interest in the Purchased Property as evidenced by the Series
1995-1 Investor Master Custodial Certificates held by such Series 1995-1
Master Custodial Certificateholder) of the amounts on deposit in the Series
1995-1 Accounts as is payable to the Series 1995-1 Master Custodial
Certificateholders on such Distribution Date pursuant to Section 4.7.
(b) Except as provided in Section 12.02 of the Agreement with respect
to a final distribution, distributions to Series 1995-1 Master Custodial
Certificateholders hereunder shall at the option of the Servicer be made by
wire transfer or by cheque mailed or delivered to each Series 1995-1 Master
Custodial Certificateholder at such Series 1995-1 Master Custodial
Certificateholder's address appearing in the Master Custodial Certificate
Register without presentation or surrender of any Series 1995-1 Master
Custodial Certificate or the making of any notation thereon; provided,
however, that with respect to Series 1995-1 Investor Master Custodial
Certificates registered in the name of the Purchasers subject to the receipt
of the Distribution Date Statement pursuant to Section 5.2 (a) hereof, the
Custodian shall give wire transfer instructions with respect to such
distributions by 10:00 a.m. Toronto time, for wire transfer of such
distributions to the account number for each Purchaser set forth in Exhibit
E, or such other account in Canada as a Purchaser shall specify to the
Servicer and Custodian in writing from time to time in immediately available
funds. Subject to receipt of the Distribution Date Statement pursuant to
Section 5.2(a) hereof, not later than 12:00 p.m., Toronto time, on the
Business Day preceding the applicable Distribution Date with respect to such
distributions, the Custodian shall provide confirmation to each of the
Purchasers of its intention to effect such wire transfer on such Distribution
Date.
SECTION 5.2 Reports and Statements to Series 1995-1 Master Custodial
--------------------------------------------------------
Certificateholders
------------------
(a) At least two Business Days prior to each Distribution Date, the
Servicer will provide to the Custodian, to the Purchasers, and on each
Distribution Date, the Custodian shall forward to each Series 1995-1 Master
Custodial Certificateholder, a statement substantially in the form of Exhibit
C prepared by the Servicer setting forth certain
<PAGE>
36
information relating to the Purchased Property and the Series 1995-1 Investor
Master Custodial Certificates.
(b) As soon as practicable after the first day of each calendar year,
beginning with calendar year 1996, the Custodian shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year
was a Series 1995-1 Master Custodial Certificateholder, a statement prepared
by the Servicer containing the information which is required to be contained
in the statement to Series 1995-1 Master Custodial Certificateholders as set
forth in paragraph (a) above, aggregated for such preceding calendar year or
the applicable portion thereof during which such Person was a Series 1995-1
Master Custodial Certificateholder, together with other information as is
necessary to enable the Series 1995-1 Master Custodial Certificateholders to
prepare their Canadian federal and provincial income and capital tax returns.
Such obligation of the Custodian shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Custodian.
(c) Each of the Custodian, the Servicer and the Seller shall, upon
reasonable notice and during normal business hours, in connection with any
assessment, reassessment or audit of any Series 1995-1 Master Custodial
Certificateholder under or pursuant to any relevant Canadian federal or
provincial taxing legislation, or any objection to or appeal from such
assessment, reassessment or audit, make available to the affected Series
1995-1 Master Custodial Certificateholder, its advisors and relevant taxing
authorities, all information, records, and documents in its possession
pertaining to the Purchased Assets or the Master Custodial
Certificateholder's ownership interest therein which is relevant to such
assessment, reassessment or audit. The obligations of the Custodian, Seller
and Servicer under this clause shall survive and continue notwithstanding any
termination of or final distribution with respect to this Series Supplement
or any termination of custodial arrangements created under the Agreement.
ARTICLE 6
Amortization Events and Controlled Amortization Notice
------------------------------------------------------
SECTION 6.1 Additional Amortization Events
------------------------------
(a) The occurrence of any of the following events shall, immediately
upon the occurrence thereof without notice or other action on the part of the
Custodian or the Series 1995-1 Master Custodial Certificateholders, be deemed
to be a Series 1995-1 Early Amortization Event solely with respect to Series
1995-1:
<PAGE>
37
(i) on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods
is less than 20%;
(ii) on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be less than
the Required Subordinated Amount on such Determination
Date, after giving effect to the distributions to be
made on the next Distribution Date;
(iii) any Service Default with respect to Series 1995-1 occurs;
(iv) on any Determination Date, as of the last day of the
preceding collection Period, the aggregate amount of
Principal Receivables relating to Used Vehicles exceeds
20% of the Pool Balance on such last day;
(v) any Carry-over Amount or Additional Carry-over Amount
arises on six consecutive Distribution Dates;
(vi) the outstanding principal balance of the Series 1995-1
Investor Master Custodial Certificates is not repaid by
the final Controlled Amortization Period Distribution
Date;
(vii) either of the Rating Agencies shall have withdrawn its
rating of the Class A Certificate or reduced such rating
to a rating category other than its highest investment
category and such rating is not restored or increased to
such highest investment category within 45 days of such
withdrawal or reduction; or
(viii) CFC fails to perform any covenant contained in Section
10.1.
(b) The Servicer shall as soon as possible and in any event within five
Business Days after the Servicer becomes aware or ought to have become aware
of the occurrence of each Series 1995-1 Early Amortization Event and each
event which, with the giving of notice or lapse of time or both would
constitute a Series 1995-1 Early Amortization Event, provide a statement of
an officer of the Servicer setting forth details as to such Series 1995-1
Early Amortization Event or event and the action which the Servicer has taken
or is proposing to take with respect thereto.
SECTION 6.2 Controlled Amortization Notice
------------------------------
For so long as the Class A Certificateholder is Prime Trust,
upon the occurrence of an Event of Default, as defined in the Trust Indenture
between Prime Trust and CIBC
<PAGE>
38
Mellon Trust Company, as Trustee, dated as of the 3rd day of
December, 1997, as the same may be amended, modified or supplemented from
time to time, which is continuing, either the Seller or the Class A
Certificateholder may at its option deliver to the other, within five days of
becoming aware of such event, a Controlled Amortization Notice.
ARTICLE 7
Purchase of Series 1995-1 Investor Master Custodial Certificates
----------------------------------------------------------------
SECTION 7.1 Appointment
-----------
(a) Effective on the Closing Date, each of the Purchasers hereby
irrevocably appoints, empowers and instructs the Custodian, as its agent to
purchase the undivided interest referred to hereinafter in the Account Assets
forming part of the Purchased Property as agent for and on behalf of each of
the Purchasers and to hold the undivided ownership interest referred to
hereinafter in the Purchased Property as agent for and on behalf of each of
the Purchasers and all other Master Custodial Certificateholders as tenants
in common and authorizes, empowers and instructs the Custodian to take in
each Purchaser's name or in its name all actions and exercise on behalf of
each of the Purchasers all rights specifically contemplated in the Agreement
or any Supplement thereto, including this Series Supplement, including the
issuance from time to time of Master Custodial Certificates to the Seller and
other Persons who agree to purchase undivided ownership interests as tenants
in common in the Purchased Property evidenced by the Master Custodial
Certificates, the right to receive and hold for the account of the Master
Custodial Certificateholders all Collections and other amounts relating to
the Account Assets or other Purchased Property and to handle and disburse
such Collections and other amounts in accordance with the Agreement and the
Supplements thereto, including this Series Supplement, the right to appoint
the Servicer and any Successor Servicer, the right to service and administer
the Purchased Property in accordance with the Agreement and the Supplements
thereto, including this Series Supplement, the right to release the Purchased
Property in accordance with the Agreement and the Supplements thereto,
including this Series Supplement (including to permit the Seller or any other
Person to retain possession of some or all of the Purchased Property) and the
right to enforce the Account Assets and the obligations of the Seller and the
Servicer under the Agreement and the Supplements thereto, including this
Series Supplement. Each of the Purchasers acknowledges that, except as
expressly set forth in the Agreement and the Supplements thereto, including
this Series Supplement, the authority of the Custodian to take such actions
and exercise such rights thereunder shall be conclusive and neither of the
Purchasers shall, as a Master Custodial Certificateholder, have the right to
possess the Purchased Property or the proceeds thereof or to enforce or
service the Purchased Property on its own behalf. Each of the Purchasers
hereby irrevocably authorizes, empowers and
<PAGE>
39
instructs the Custodian to execute and deliver on its behalf, as
attorney-in-fact or otherwise, all such documents and instruments as may be
necessary or desirable to accomplish the foregoing.
(b) Subject to the terms of the Agreement and the Supplements thereto,
including this Series Supplement, the Custodian agrees to act as the agent
for each of the Purchasers to perform the function and services and exercise
the authority conferred on it by each of the Purchasers pursuant to the
Custodial Agreement and the Supplements thereto, including this Series
Supplement.
SECTION 7.2 Series 1995-1 Investor Master Custodial Certificates
----------------------------------------------------
Each of the Purchasers acknowledges that its undivided ownership
interest in the Purchased Property is to be evidenced by a Series 1995-1
Investor Master Custodial Certificate issued and authenticated by the
Custodian in accordance with the Agreement and this Series Supplement. Each
of the Purchasers hereby acknowledges and agrees that the rights and
obligations of the Series 1995-1 Master Custodial Certificateholders will be
governed by the Custodial Arrangement established pursuant to the terms and
provisions of the Agreement and the Supplements thereto, including this
Series Supplement. Each of the Purchasers also hereby acknowledges and agrees
that, by acquiring a Series 1995-1 Investor Master Custodial Certificate and
executing this Series Supplement, it shall be bound by the terms and
conditions of the Agreement and that the rights accruing to it as the Holder
of an undivided ownership interest in the Purchased Property, which is held
from time to time by the Custodian as agent for and on behalf of the Master
Custodial Certificateholders pursuant to the terms and conditions of the
Agreement, are governed by, and may only be exercised in accordance with, the
Agreement. Prime Trust hereby designates TD Securities Inc. as its agent for
the purposes of the Agreement.
SECTION 7.3 Payment and Delivery of Investor Master Custodial Certificates
--------------------------------------------------------------
On the Closing Date, each of the Purchasers shall deliver a certified
cheque, bank draft or wire transfer in the amount set forth in the notice in
the form of Exhibit D payable to or to the order of the Seller in respect of
its purchase of its undivided ownership interest in the Purchased Property.
The Custodian acknowledges and agrees by its acceptance and execution of this
Series Supplement, to issue and deliver to the Purchasers on the Closing
Date, duly executed and authenticated Series 1995-1 Investor Master Custodial
Certificates, against payment therefor by certified cheque, bank draft or
wire transfer, having an initial principal amount equal to such consideration
which payment each of the Purchasers is hereby authorized and directed by the
Custodian to make payable to or to the order of the Seller.
<PAGE>
40
SECTION 7.4 Rights of Seller on Sale of Class A Certificate
-----------------------------------------------
In the event that Prime Trust wishes to sell the Class A Certificate to
a Person or Persons, Prime Trust shall first procure a bona fide arm's length
offer (the "Offer") for the Class A Certificate which it intends to accept,
and shall give notice of the proposed sale to the Seller (a "Sale Notice"),
including the terms and conditions of the Offer. The Seller may elect, within
10 days of the receipt of a Sale Notice to purchase the Class A Certificate
on the same terms and conditions as are contained in the Offer. Such purchase
and sale shall take place at a time and place mutually convenient to Prime
Trust and the Seller, but in any event not later than 30 days following
receipt of the relevant Sale Notice by the Seller. In the event the Seller
does not elect to purchase the Class A Certificate in accordance herewith,
Prime Trust may sell the Class A Certificate pursuant to the Offer. By its
entering into of this Series Supplement, as amended and restated, the Seller
waives its rights hereunder to receive a Sale Notice and to exercise its
right to purchase the Class A Certificate in respect of the sale of the Class
A Certificate by TD Trust Company, in its capacity as trustee for CoRe Trust
to Prime Trust.
ARTICLE 8
Final Distributions
-------------------
SECTION 8.1 Sale of Series 1995-1 Master Custodial Certificateholders'
Interest Pursuant to Section 2.03 of the Agreement;
Distributions Pursuant to Section 7.1 of this Series
Supplement or Section 2.03 or 12.02(c) of the Agreement
-------------------------------------------------------
(a) The amount to be paid by the Seller to the Collection Account with
respect to Series 1995-1 in connection with a purchase of the Series 1995-1
Master Custodial Certificateholders' Interest pursuant to Section 2.03 of the
Agreement shall equal the Reassignment Amount for the Distribution Date on
which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 8.1 of this Series Supplement or
Section 2.03 of the Agreement or any Series 1995-1 Termination Proceeds
deposited into the Collection Account pursuant to Section 12.02(c) of the
Agreement, the Custodian shall, upon receipt of written instructions from the
Servicer, not later than 12:00 noon, Toronto time, on the Distribution Date
on which such amounts are deposited (or, if such date is not a Distribution
Date, on the immediately following Distribution Date) in the priority set
forth below: (i) first,(x) deposit the Invested Amount on such date into the
Principal Funding Account and (y) deposit the amount of accrued and unpaid
interest on the unpaid balance of the Series 1995-1 Investor
<PAGE>
41
Master Custodial Certificates, plus the amount of any Additional Interest
Amount, any Carry-over Amount or Additional Carry-over Amount for such
Distribution Date or previously due but not paid to Series 1995-1 Master
Custodial Certificateholders on any prior Distribution Date, up to the
Reassignment Amount for Series 1995-1, and (ii) second, pay the remainder of
any Termination Proceeds to the Seller and any funds on deposit in the Spread
Shortfall Account to CFC and the Seller to the extent of their respective
interests therein as determined by CFC and the Seller.
(c) Notwithstanding anything to the contrary in this Series Supplement
or the Agreement, the entire amount deposited in the Principal Funding
Account pursuant to Section 8.1 and all other amounts on deposit therein
shall be distributed in full to the Series 1995-1 Master Custodial
Certificateholders on such date and any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Agreement with respect to Series 1995-1.
ARTICLE 9
Change in Circumstance
----------------------
SECTION 9.1 Change in Circumstance
----------------------
If either:
(a) the introduction of or any change (including, without limitation,
any change by way of imposition of a capital or other tax), in or any change
in the interpretation of, any law or regulation by any court or governmental
authority charged with the administration thereof, after the date hereof; or
(b) the compliance by a Purchaser with any guideline or request from
any governmental authority (whether or not having the force of law) adopted,
imposed or made after the date hereof has the effect of
(i) increasing the cost to such Purchaser of purchasing,
funding or maintaining an undivided interest in the
Purchased Property hereunder or agreeing to make such
Purchase hereunder, or reducing the rate of return to
such Purchaser in connection therewith; or
(ii) reducing the amount receivable by such Purchaser with
regard to any Principal Receivable;
<PAGE>
42
the Seller shall, from time to time, upon demand by such Purchaser pay to
such Purchaser that portion of such increased costs incurred, amounts not
received or receivable, or compensation for such reduction in rate of return
which is attributable to purchasing, funding or maintaining an undivided
interest in the Purchased Property hereunder. Such Purchaser shall provide
the Seller with a certificate setting forth its computation of such increased
costs, amounts not received or receivable or reduction in rate of return,
which computation may utilize such averaging and attribution methods such
Purchaser believes to be reasonable. Such certificate shall be prima facie
evidence, absent manifest error, of the amount payable to such Purchaser
pursuant to this Section 9.1. Such Purchaser shall, upon becoming aware of an
event or circumstance that is likely to, with the passage of time or
otherwise, entitle it to demand payment pursuant to this Section 9.1,
promptly notify the Seller.
ARTICLE 10
Chrysler Financial Corporation
------------------------------
SECTION 10.1 Covenants of CFC
----------------
From the date hereof until the Final Payment Date, CFC covenants with
the Class A Certificateholder that it shall, unless the Class A
Certificateholder otherwise consents in writing:
(a) not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and CFC shall not
permit any Person to consolidate with or merge into CFC or
convey, transfer or lease its properties and assets
substantially as an entirety to CFC unless:
(i) in case CFC shall consolidate with or merge into another
corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any Person,
the corporation formed by such consolidation or into
which CFC is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties
and assets of CFC substantially as an entirety shall be
a corporation organized and existing under the laws of
the United States of America, any political subdivision
thereof or any State thereof and shall expressly assume
in writing the obligations of CFC under this Section
10.1; and
(ii) CFC and the successor Person have delivered to the Class
A Certificateholder a certificate of a Responsible
Officer and an Opinion of
<PAGE>
43
Counsel each stating that such consolidation, merger,
conveyance, transfer or lease comply with this Section
10.1(a) and that all conditions precedent herein
provided for relating to such transaction have been
complied with.
Upon any consolidation with or merger into any other
corporation, or any conveyance, transfer or lease of the
properties and assets of CFC substantially as an entirety in
accordance with this Section 10.1(a), the successor corporation
formed by such consolidation or into which CFC is merged or the
successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise
every right and power of CFC under the Agreement and this Series
Supplement with the same effect as if such successor had been
named as CFC herein, and thereafter the predecessor corporation
shall be relieved of all obligations and covenants under this
Section 10.1;
(b) at any time following the failure of the Seller to perform its
obligations under this Series Supplement and the Agreement,
(including those arising in its capacity as Servicer, if the
Seller is at such time the Servicer) which failure 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
Series Supplement and the 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 and thereunder;
(c) where required under this Series Supplement, deposit amounts
required to be so deposited to the Spread Shortfall Account; and
(d) 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 Class A Certificateholder, in addition to any
payment to which the Class A Certificateholder is otherwise
entitled under this Series Supplement or the Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by the Class A Certificateholder will equal
the full
<PAGE>
44
amount the Class A Certificateholder would have received had no
such deduction or withholding been required.
ARTICLE 11
Miscellaneous Provisions
------------------------
SECTION 11.1 Ratification of Agreement
-------------------------
As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken and construed as one and the same
instrument.
SECTION 11.2 Counterparts
------------
This Series Supplement may be executed in two or more counterparts (and
by different parties on separate counterparts) each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
SECTION 11.3 Governing Law
-------------
THIS SERIES SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE
THEREIN, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
45
IN WITNESS WHEREOF, the Seller, the Servicer, the Purchasers and the
Custodian have caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.
CHRYSLER CREDIT CANADA LTD.,
Seller and Servicer,
By: "Dennis M. Cantwell"
--------------------
THE ROYAL TRUST COMPANY,
Custodian,
By: "Randy Byrne"
--------------------
By: "Patricia T. Benjamin"
----------------------
PRIME TRUST, Purchaser, by
its Administrator, TD
Securities Inc.
By: "Michael F. Buzanis"
--------------------
By: "William J. Furlong"
--------------------
AUTO RECEIVABLES CORPORATION,
Purchaser
By: "Dennis M. Cantwell"
--------------------
CHRYSLER FINANCIAL
CORPORATION, Limited Guarantor
<PAGE>
By: "Dennis M. Cantwell"
--------------------
<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
(FORM OF FACE OF CLASS A MASTER CUSTODIAL CERTIFICATE, Series 1995-
1)
THIS MASTER CUSTODIAL CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS MASTER
CUSTODIAL CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
IN ADDITION, NEITHER THIS MASTER CUSTODIAL CERTIFICATE NOR ANY PORTION
THEREOF HAS BEEN NOR WILL BE QUALIFIED FOR SALE UNDER THE SECURITIES LAW OF
CANADA OR ANY PROVINCE OR TERRITORY THEREOF AND NEITHER THIS MASTER CUSTODIAL
CERTIFICATE NOR ANY PORTION THEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN CANADA OR TO, OR FOR THE ACCOUNT OF, ANY RESIDENT OF CANADA,
EXCEPT PURSUANT TO A VALID EXEMPTION FROM SUCH SECURITIES LAWS.
THIS MASTER CUSTODIAL CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE MASTER CUSTODIAL AND SERVICING AGREEMENT REFERRED TO
HEREIN.
<PAGE>
No.
MASTER CUSTODIAL CERTIFICATE, Series 1995-1, CLASS A
THIS CERTIFICATE EVIDENCES AN UNDIVIDED OWNERSHIP
INTEREST IN CERTAIN ASSETS HELD BY THE CUSTODIAN
AS AGENT FOR AND ON BEHALF OF THE HOLDER HEREOF
AND ALL OTHER HOLDERS OF MASTER
CUSTODIAL CERTIFICATES AS TENANTS IN COMMON
AS PROVIDED IN THE AMENDED AND RESTATED MASTER CUSTODIAL
AND SERVICING AGREEMENT REFERRED TO ON THE REVERSE HEREOF.
The assets so held consist primarily of wholesale (i.e., dealer
floorplan) receivables (the "Receivables") generated from time to time in the
ordinary course of business in a portfolio of revolving financing
arrangements (the "Accounts") of Chrysler Credit Canada Ltd. (the "Seller")
meeting certain eligibility criteria. The principal amount of this
certificate (the "Series 1995-1 Class A Certificate") on the date hereof is
$o and the balance at any time thereafter equals that portion of the Initial
Invested Amount (as defined in the Series 1995-1 Supplement referred to on
the reverse hereof) which is attributable from time to time to the Holder of
this Series 1995-1 Class A Certificate less, without duplication,
distributions of principal thereon pursuant to the terms of the Amended and
Restated Master Custodial and Servicing Agreement referred to on the reverse
hereof. This Series 1995-1 Class A Certificate does not represent an interest
in or obligation of the Seller or any affiliate thereof or the Custodian
except as specifically provided for in the Amended and Restated Master
Custodial and Servicing Agreement referred to on the reverse hereof.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Custodian by manual signature, this Series 1995-1 Class A
Certificate shall not entitle the Holder to any benefit under the Amended and
Restated Master Custodial and Servicing Agreement referred to on the reverse
hereof, or be valid for any purpose.
<PAGE>
2
THIS Series 1995-1 CLASS A CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF ONTARIO AND THE
LAWS OF CANADA APPLICABLE THEREIN WITHOUT REFERENCE TO THEIR
CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the Custodian has caused this Series 1995-1 Class A
Certificate to be duly executed.
Dated: !
THE ROYAL TRUST COMPANY,
as Custodian
By-------------------------------
Name:
Title:
By-------------------------------
Name:
Title:
<PAGE>
CUSTODIAN'S CERTIFICATE OF AUTHENTICATION
This is the Series 1995-1 Class A Certificate described in the Series
1995-1 Amended and Restated Supplement dated as of December 16, 1997 to the
within-mentioned Amended and Restated Master Custodial and Servicing
Agreement.
THE ROYAL TRUST COMPANY,
as Custodian
By:------------------------
Authorized Officer
<PAGE>
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
- -----------------------------------------------------------------------------
(please print or Typewrite name and address)
the undivided ownership interest in the Purchased Property (including for
greater certainty all rights and entitlements under the Agreement referred to
on the reverse hereof to the extent such rights and entitlements relate to
the interest so sold, assigned and transferred) evidenced by the within
Series 1995-1 Class A Certificate or $-------------------- * of the principal
balance thereof and hereby irrevocably constitutes and appoints--------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
attorney to transfer the said undivided ownership interest in the Purchased
Property evidenced by the within Series 1995-1 Class A Certificate on the
register of the Series 1995-1 Class A Certificates with full power of
substitution in the premises.
* If less than the full outstanding principal balance of the undivided
ownership interest in the Purchased Property evidenced by the within
Series 1995-1 Class A Certificate is to be transferred, indicate in the
space provided the principal amount (which must be in minimum
denominations of $1,000 and integral multiples of $1,000 thereof) to be
transferred.
The Transferee hereby confirms the appointment of the Custodian as the agent
of the Transferee for the purposes set out in the Agreement and the Custodian
hereby accepts the appointment as agent of the Transferee for these purposes.
The Transferee acknowledges and agrees that the sale of the undivided
ownership interest in the Purchased Property evidenced by the Master
Custodial Certificate to be acquired by the Transferee has not been qualified
by a prospectus, and represents and warrants that the sale by the Transferor
of the undivided ownership interest in the Purchased Property evidenced by
the Master Custodial Certificate and the purchase by the Transferee of the
undivided ownership interest in the Purchased Property evidenced by the said
Certificate, has complied with all applicable securities laws, regulations
and policies of applicable securities regulatory authorities.
DATED DATED DATED
--------------------- ---------------------- ------------------
Custodian
by
---------------------- ------------------------- -----------------------
Signature of Transferee Signature of Transferor
<PAGE>
2
(Form of Registration Panel)
(No writing hereon except by the Custodian)
Date of In Whose Name
Registration Registered Custodian
------------ ------------ ---------
<PAGE>
FORM OF REVERSE OF Series 1995-1 CLASS A CERTIFICATE
This Series 1995-1 Class A Certificate is issued under and is subject
to the terms, provisions and conditions of the Amended and Restated Master
Custodial and Servicing Agreement dated as of December 16, 1997 (as amended
and supplemented, the "Agreement"), by and among Chrysler Credit Canada Ltd.,
as Seller and Servicer, and The Royal Trust Company, as Custodian (the
"Custodian"), as supplemented by the Series 1995-1 Amended and Restated
Supplement dated as of December 16, 1997 (as amended and supplemented the
"Supplement") among Chrysler Credit Canada Ltd., the Custodian, Prime Trust,
Chrysler Financial Corporation and Auto Receivables Corporation. The assets
held by the Custodian as agent for and on behalf of the Certificateholders
pursuant to the Agreement (the "Purchased Property") will include (a) all of
the Seller's right, title and interest in, to and under the Receivables in
each Account and all Collateral Security with respect thereto owned by the
Seller at the close of business on the Cut-Off Date, in the case of the
Initial Accounts, and on the applicable Additional Cut-Off Dates, in the case
of Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds (including Recoveries)
thereof, (b) all of the Seller's right, title and interest in, to and under
the Receivables in each Account (other than any newly created Receivables in
any Designated Account) and all Collateral Security with respect thereto
owned by the Seller at the close of business of each Transfer Date and not
theretofore conveyed to the Custodian, all monies due or to become due and
all amounts received with respect thereto and all proceeds (including
Recoveries) thereof, (c) all monies on deposit in, and Eligible Investments
credited to the Collection Account or any Series Account, (d) any
Enhancements and (e) the contractual rights and remedies of the Custodian
under the Agreement. In addition to the Investor Master Custodial
Certificates, the Seller's Certificate issued pursuant to the Agreement
evidences the Seller's Interest in the Purchased Property. Although a summary
of certain provisions of the Agreement is set forth herein, this Series
1995-1 Class A Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Custodian. A copy of the
Agreement may be requested from the Custodian by writing to the Custodian at
The Royal Trust Company, c/o CIBC Mellon Trust Company, 393 University
Avenue, 5th Floor, Toronto, Ontario, M5G 2M7, Attention: Advisory Services.
To the extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Agreement and the Supplement.
The Seller, the Holder of this Series 1995-1 Class A Certificate and
each Holder of a Master Custodial Certificate for any Series, by acceptance
of its Certificate, agrees to be bound by the terms of the Agreement and to
treat, and to take no action inconsistent with the treatment of, this Series
1995-1 Class A Certificate for all purposes, including the purposes of
federal or provincial income taxes and capital taxes and any other taxes
imposed on or measured by income or capital, as evidencing an undivided
ownership interest in the Purchased Property.
<PAGE>
2
This Series 1995-1 Class A Certificate is not permitted to be
transferred, assigned, exchanged or otherwise pledged or conveyed except in
accordance with the Agreement, including Section 6.04 of the Agreement.
The undivided ownership interest of the Holder of this Series 1995-1
Class A Certificate in the Purchased Property shall be extinguished upon the
final distribution being made out of the Purchased Property to the Holder of
this Series 1995-1 Class A Certificate upon presentation and surrender of
this Series 1995-1 Class A Certificate to the Custodian on or after the
Distribution Date fixed for such final distribution pursuant to Section 12.02
of the Agreement.
<PAGE>
EXHIBIT B
FORM OF CLASS B CERTIFICATE
(FORM OF FACE OF CLASS B MASTER CUSTODIAL CERTIFICATE, Series 1995-
1)
THIS MASTER CUSTODIAL CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS MASTER
CUSTODIAL CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
IN ADDITION, NEITHER THIS MASTER CUSTODIAL CERTIFICATE NOR ANY PORTION
THEREOF HAS BEEN NOR WILL BE QUALIFIED FOR SALE UNDER THE SECURITIES LAW OF
CANADA OR ANY PROVINCE OR TERRITORY THEREOF AND NEITHER THIS MASTER CUSTODIAL
CERTIFICATE NOR ANY PORTION THEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN CANADA OR TO, OR FOR THE ACCOUNT OF, ANY RESIDENT OF CANADA,
EXCEPT PURSUANT TO A VALID EXEMPTION FROM SUCH SECURITIES LAWS.
THIS CLASS B CERTIFICATE IS SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT
IN ALL RESPECTS TO THE CLASS A CERTIFICATE. NO AMOUNT SHALL BE PAID BY THE
SERVICER OR THE CUSTODIAN NOR SHALL THE HOLDER OF THE CLASS B CERTIFICATE
TAKE OR RECEIVE FROM THE SERVICER, THE SELLER OR THE CUSTODIAN ANY PAYMENT IN
RESPECT OF THE PRINCIPAL OR INTEREST ALLOCATED TO THE CLASS B CERTIFICATE,
UNLESS AND UNTIL THE PRINCIPAL ALLOCATED TO THE CLASS A CERTIFICATE WHICH
SHALL BE THEN DUE AND PAYABLE AND ALL INTEREST ALLOCABLE THERETO WHICH SHALL
BE THEN DUE AND PAYABLE IN RESPECT OF THE CLASS A CERTIFICATE, INCLUDING ANY
ADDITIONAL CLASS A INTEREST AMOUNT, CLASS A CARRY-OVER AMOUNT OR ADDITIONAL
CLASS A CARRY-OVER AMOUNT, SHALL HAVE BEEN PAID IN FULL (OR SUCH PAYMENT
SHALL HAVE BEEN PROVIDED FOR) TO THE EXTENT AND IN THE MANNER PROVIDED FOR IN
THE AMENDED AND RESTATED MASTER CUSTODIAL AND SERVICING AGREEMENT AND THE
SERIES 1995-1 AMENDED AND RESTATED SUPPLEMENT REFERRED TO HEREIN.
THIS MASTER CUSTODIAL CERTIFICATE IS NOT PERMITTED TO BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR
<PAGE>
2
CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE MASTER CUSTODIAL AND
SERVICING AGREEMENT REFERRED TO HEREIN.
<PAGE>
No.
CLASS B MASTER CUSTODIAL CERTIFICATE, Series 1995-1
THIS CERTIFICATE EVIDENCES AN UNDIVIDED OWNERSHIP
INTEREST IN CERTAIN ASSETS HELD BY THE CUSTODIAN
AS AGENT FOR AND ON BEHALF OF THE HOLDER HEREOF
AND ALL OTHER HOLDERS OF MASTER
CUSTODIAL CERTIFICATES AS TENANTS IN COMMON
AS PROVIDED IN THE AMENDED AND RESTATED MASTER CUSTODIAL
AND SERVICING AGREEMENT REFERRED TO ON THE REVERSE HEREOF.
The assets so held consist primarily of wholesale (i.e., dealer
floorplan) receivables (the "Receivables") generated from time to time in the
ordinary course of business in a portfolio of revolving financing
arrangements (the "Accounts") of Chrysler Credit Canada Ltd. (the "Seller")
meeting certain eligibility criteria. The principal amount of this
certificate (the "Series 1995-1 Class B Certificate") on the date hereof is
$o and the balance at any time thereafter equals that portion of the Initial
Invested Amount (as defined in the Series 1995-1 Amended and Restated
Supplement referred to on the reverse hereof) which is attributable from time
to time to the Holder of this Series 1995-1 Class B Certificate. This Series
1995-1 Class B Certificate does not represent an interest in or obligation of
the Seller or any affiliate thereof or the Custodian except as specifically
provided for in the Amended and Restated Master Custodial and Servicing
Agreement referred to on the reverse hereof.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Custodian by manual signature, this Series 1995-1 Class B
Certificate shall not entitle the Holder to any benefit under the Amended and
Restated Master Custodial and Servicing Agreement referred to on the reverse
hereof, or be valid for any purpose.
<PAGE>
2
THIS Series 1995-1 CLASS B CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF ONTARIO AND THE
LAWS OF CANADA APPLICABLE THEREIN WITHOUT REFERENCE TO THEIR
CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the Custodian has caused this Series 1995-1 Class B
Certificate to be duly executed.
Dated: !
THE ROYAL TRUST COMPANY,
as Custodian
by
----------------------------
Name:
Title:
by
----------------------------
Name:
Title:
<PAGE>
CUSTODIAN'S CERTIFICATE OF AUTHENTICATION
This is the Series 1995-1 Class B Certificate described in the Series
1995-1 Amended and Restated Supplement dated as of December 16, 1997 to the
within-mentioned Amended and Restated Master Custodial and Servicing
Agreement.
THE ROYAL TRUST COMPANY,
as Custodian
By:
-----------------------------
Authorized Officer
<PAGE>
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
- -----------------------------------------------------------------------------
(please print or Typewrite name and address)
the undivided ownership interest in the Purchased Property (including for
greater certainty all rights and entitlements under the Agreement referred to
on the reverse hereof to the extent such rights and entitlements relate to
the interest so sold, assigned and transferred) evidenced by the within
Series 1995-1 Class B Certificate or $--------------------------------- * of
the principal balance thereof and hereby irrevocably constitutes and appoints
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
attorney to transfer the said undivided ownership interest in the Purchased
Property evidenced by the within Series 1995-1 Class B Certificate on the
register of the Series 1995-1 Class B Certificates with full power of
substitution in the premises.
* If less than the full outstanding principal balance of the undivided
ownership interest in the Purchased Property evidenced by the within
Series 1995-1 Class B Certificate is to be transferred, indicate in the
space provided the principal amount (which must be in minimum
denominations of $1,000 and integral multiples of $1,000 thereof) to be
transferred.
The Transferee hereby confirms the appointment of the Custodian
as the agent of the Transferee for the purposes set out in the Agreement and
the Custodian hereby accepts the appointment as agent of the Transferee for
these purposes. The Transferee acknowledges and agrees that the sale of the
undivided ownership interest in the Purchased Property evidenced by the
Master Custodial Certificate to be acquired by the Transferee has not been
qualified by a prospectus, and represents and warrants that the sale by the
Transferor of the undivided ownership interest in the Purchased Property
evidenced by the Master Custodial Certificate and the purchase by the
Transferee of the undivided ownership interest in the Purchased Property
evidenced by the said Certificate, has complied with all applicable
securities laws, regulations and policies of applicable securities regulatory
authorities.
DATED DATED DATED
--------------------------- ----------------------- --------------
Custodian
by
- ---------------------- ------------------------ ------------------------
Signature of Transferee Signature of Transferor
<PAGE>
2
(Form of Registration Panel)
(No writing hereon except by the Custodian)
Date of In Whose Name
Registration Registered Custodian
------------ ---------- ---------
<PAGE>
FORM OF REVERSE OF Series 1995-1 CLASS B CERTIFICATE
This Series 1995-1 Class B Certificate is issued under and is subject
to the terms, provisions and conditions of the Amended and Restated Master
Custodial and Servicing Agreement dated as of December 16, 1997 (as amended
and supplemented, the "Agreement"), by and among Chrysler Credit Canada Ltd.,
as Seller and Servicer, and The Royal Trust Company, as Custodian (the
"Custodian"), as supplemented by the Series 1995-1 Amended and Restated
Supplement dated as of December 16, 1997 (as amended and supplemented the
"Supplement") among Chrysler Credit Canada Ltd., the Custodian, Prime Trust,
Chrysler Financial Corporation and Auto Receivables Corporation. The assets
held by the Custodian as agent for and on behalf of the Certificateholders
pursuant to the Agreement (the "Purchased Property") will include (a) all of
the Seller's right, title and interest in, to and under the Receivables in
each Account and all Collateral Security with respect thereto owned by the
Seller at the close of business on the Cut-Off Date, in the case of the
Initial Accounts, and on the applicable Additional Cut-Off Dates, in the case
of Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds (including Recoveries)
thereof, (b) all of the Seller's right, title and interest in, to and under
the Receivables in each Account (other than any newly created Receivables in
any Designated Account) and all Collateral Security with respect thereto
owned by the Seller at the close of business of each Transfer Date and not
theretofore conveyed to the Custodian, all monies due or to become due and
all amounts received with respect thereto and all proceeds (including
Recoveries) thereof, (c) all monies on deposit in, and Eligible Investments
credited to the Collection Account or any Series Account, (d) any
Enhancements and (e) the contractual rights and remedies of the Custodian
under the Agreement. In addition to the Investor Master Custodial
Certificates, the Seller's Certificate issued pursuant to the Agreement
evidences the Seller's Interest in the Purchased Property. Although a summary
of certain provisions of the Agreement is set forth herein, this Series
1995-1 Class B Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Custodian. A copy of the
Agreement may be requested from the Custodian by writing to the Custodian at
The Royal Trust Company, c/o CIBC Mellon Trust Company, 393 University
Avenue, 5th Floor, Toronto, Ontario, M5G 2M7, Attention: Advisory Services.
To the extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Agreement and the Supplement.
This Class B Certificate is subordinate and junior in right of payment
in all respects to the Class A Certificate. No amount shall be paid by the
Servicer or the Custodian nor shall the Holders of the Class B Certificate
take or receive from the Servicer, the Seller or the Custodian any payment in
respect of the principal or interest allocated to the Class B Certificate,
unless and until the principal allocated to the Class A Certificate which
shall be then due and payable and all interest allocable thereto which shall
be then due and payable in respect of the Class A Certificate, including any
Additional Class A Interest Amount, Class A Carry-over Amount or
<PAGE>
2
Additional Class A Carry-over Amount, shall have been paid in full (or such
payment shall have been provided for) to the extent and in the manner
provided for in the Agreement.
The Seller, the Holder of this Series 1995-1 Class B Certificate and
each Holder of a Master Custodial Certificate for any Series, by acceptance
of its Certificate, agrees to be bound by the terms of the Agreement and to
treat, and to take no action inconsistent with the treatment of, this Series
1995-1 Class B Certificate for all purposes, including the purposes of
federal or provincial income taxes and capital taxes and any other taxes
imposed on or measured by income or capital, as evidencing an undivided
ownership interest in the Purchased Property.
This Series 1995-1 Class B Certificate is not permitted to be
transferred, assigned, exchanged or otherwise pledged or conveyed except in
accordance with the Agreement, including Section 6.04 of the Agreement.
The undivided ownership interest of the Holder of this Series 1995-1
Class B Certificate in the Purchased Property shall be extinguished upon the
final distribution being made out of the Purchased Property to the Holder of
this Series 1995-1 Class B Certificate upon presentation and surrender of
this Series 1995-1 Class B Certificate to the Custodian on or after the
Distribution Date fixed for such final distribution pursuant to Section 12.02
of the Agreement.
<PAGE>
EXHIBIT C
FORM OF DISTRIBUTION DATE STATEMENT
See Attached
<PAGE>
EXHIBIT D
REQUEST FOR PURCHASE OF INCREASE IN
MAXIMUM INITIAL INVESTED AMOUNT
TO: Holders of Master Custodial Certificates, Series 1995-1
The undersigned hereby requests that each of you agree to purchase an
increase in your undivided ownership interest in the Purchased Property, at a
purchase price and on the terms and conditions as set forth below:
1. Purchase Price:
Class A: !
Class B: !
Total Maximum Initial Invested Amount: !
2. Additional Issue Expenses for the
[Maximum Initial Invested Amount/Increase in the Maximum Initial
Invested Amount]
Advisory Fee: !
Legal Fees: !
Rating Agency Fees: !
Other Fees: !
3. Utilized Program Fee:
4. Unutilized Program Fee:
5. Conditions Precedent to Purch[Insert appropriate conditions precedent
to increases]
Terms used herein which are not defined herein shall have the meanings
ascribed thereto in the Amended and Restated Master Custodial and Servicing
Agreement dated as of December
<PAGE>
2
16, 1997 (as amended and supplemented), by and among Chrysler Credit Canada
Ltd., as Seller and Servicer, and The Royal Trust Company, as Custodian.
Dated this day of , .
CHRYSLER CREDIT CANADA LTD.,
Seller
By:
-------------------------
<PAGE>
NOTICE OF ACCEPTANCE OF INCREASE IN
MAXIMUM INITIAL INVESTED AMOUNT
TO: Chrysler Credit Canada Ltd., as Seller and Servicer
TO: The Royal Trust Company, as Custodian
Pursuant to the request (the "Request") of Chrysler Credit Canada Ltd.,
as Seller dated o, the undersigned Purchasers of the Class A Certificate and
Class B Certificate hereby notify you that each of the undersigned agrees on
the terms and conditions specified in the Request to purchase an increase in
its undivided ownership interest in the Purchased Property, which purchases
shall be, as between the Class A Certificateholder and Class B
Certificateholder, in amounts based on our respective outstanding principal
balances of Series 1995-1 Investor Master Custodial Certificates, so that the
Maximum Initial Invested Amount following such purchases shall be $!.
Terms used herein which are not defined herein shall have the meanings
ascribed thereto in the Amended and Restated Master Custodial and Servicing
Agreement dated as of December 16, 1997 (as amended and supplemented) by and
among Chrysler Credit Canada Ltd., as Seller and Servicer, and The Royal
Trust Company, as Custodian.
Dated this day of , .
PRIME TRUST, Purchaser by its
Administrator, TD Securities Inc.
By:
---------------------------
By:
---------------------------
AUTO RECEIVABLES CORPORATION
By:
---------------------------
<PAGE>
EXHIBIT E
SERIES 1995-1 ACCOUNTS
MAIN COLLECTION ACCOUNT 088029002
1995-1 RESERVE FUND ACCOUNT 098898001
1995-1 YIELD SUPPLEMENT ACCOUNT 098899001
098900001
1995-1 SPREAD SHORTFALL ACCOUNT 088029009
1995-1 PRINCIPAL FUNDING ACCOUNT
<PAGE>
EXHIBIT F
FORM OF OPINION
See Attached
Exhibit 10-GGGG
Conformed Copy
AMENDED AND RESTATED 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 ................................... 11
ARTICLE III: FEES AND EXPENSES ................................... 12
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE .................... 14
ARTICLE V: SETTLEMENT PROCEDURES ............................... 16
ARTICLE VI: SERVICING OF RECEIVABLES ............................ 17
ARTICLE VII: REPRESENTATIONS AND WARRANTIES ...................... 20
ARTICLE VIII: COVENANTS ........................................... 22
ARTICLE IX: ADMINISTRATIVE AGENT ................................ 24
ARTICLE X: COVENANTS OF CFC .................................... 25
ARTICLE XI: MISCELLANEOUS ....................................... 26
EXHIBIT A Form of Servicer Report
EXHIBIT B Form of Purchase Request
EXHIBIT C Form of Assignment
<PAGE>
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT dated as of
December 18, 1996, as amended and restated as of November 10, 1997, 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 a Precomputed Advance 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
Exhibits hereto and the Schedule of Contracts, as amended and restated as of
November 10, 1997 and as it may be further 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.
"Assignment" means an assignment of Purchased Assets in the form of
Exhibit C hereto.
"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.
<PAGE>
"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.
"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 for a Purchase, the period beginning on the Cut-Off
Date and ending on the last calendar day of the calendar month in which the
Cut-Off Date occurs.
<PAGE>
- 3 -
"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.
"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 in respect of the initial
Purchase and means the date specified in the Purchase Request in respect of
each subsequent Purchase.
"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 this
Agreement was in effect during such 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, to the extent this Agreement was in effect during such
preceding months.
"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.
<PAGE>
- 4 -
"Eligible Receivable" means, as of the applicable 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,
(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,
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(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,
(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 any interest rate cap agreement made between CFC and the Purchaser with
respect to this Agreement.
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"Insolvency Event" means, with respect to a specified Person, the
occurrence of an initial bankruptcy event or the commencement by or against
such Person of any other 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.
"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 amounts of cash paid by the
Purchaser to the Seller for each Purchase, 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 Principal Balances 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 this Agreement was in effect during such months, 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
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the month and the first day of the five immediately preceding months, to the
extent this Agreement was in effect during such months.
"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.
"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 of Canada including, in Quebec,
the Civil Code of Quebec, and in 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.
"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
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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.
"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, in respect of the initial Purchase, December
18, 1996, and in respect of any subsequent Purchase, the date set out on the
related Purchase Request, in each case being 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.
"Purchase Investment" means, in respect of a Purchase, the aggregate
amount of cash paid by the Purchaser to the Seller for such Purchase.
"Purchase Principal Balance" means, in respect of a Purchase, the
aggregate Principal Balance of all Receivables subject to the related
Purchase Request.
"Purchase Request" means the request in the form of Exhibit B hereto
to be provided by the Seller in accordance with Section 2.1.
"Purchased Assets" means all Purchased Receivables purchased by the
Purchaser under this Agreement 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.
"Purchased Receivable" means an Eligible Receivable being sold to
Purchaser under this Agreement arising under a Contract listed on a Schedule
of Contracts delivered to the Administrative Agent prior to a Purchase Date.
"Purchaser" means Canadian Master Trust, a trust established
pursuant to the laws of the Province of Ontario and its successors and
assigns.
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"Purchaser's Anticipated Recovery" means the sum of the Investment
on a 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
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
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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 an
aggregate Principal Balance equal to 5.0% of the Investment as of the initial
Purchase Date and thereafter means the amount specified in a Purchase
Request.
"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 a list of Contracts delivered to the
Administrative Agent in connection with a Purchase, 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.
"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 for a Purchase, such period shall
commence on the Cut-Off Date and end on the last calendar day of the calendar
month in which the Cut-Off Date occurs.
"Significant Event" has the meaning assigned to that term in
Section 8.2.(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.
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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.
"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, from time to time the Seller may, by delivering
a Purchase Request to the Purchaser prior to the date of a requested
purchase, effective as of the Purchase Date, request the Purchaser to
purchase all of the Seller's right, title and interest to and in the
Purchased Receivables specified in the Schedule of Contracts accompanying the
Purchase Request, 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. If the Purchaser in its sole discretion agrees to
such purchase, then subject to the consent of the Rating Agency, the Seller
shall sell, transfer and assign, and the Purchaser shall purchase and accept,
the transfer and assignment pursuant to an Assignment of all of the Seller's
right, title and interest to and in the Purchased Receivables relating to
such Purchase Request, 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 a "Purchase").
SECTION 2.2. Purchase Price. The aggregate purchase price payable by
the Purchaser for all Purchases shall be the sum of the Purchase Investment
for each Purchase plus the amount, if any, by which aggregate Collections
exceed the Purchaser's Anticipated Recovery. On each Purchase Date, the
Purchaser shall pay to the Seller cash in an amount equal to the Purchase
Principal Balance as of the Cut-Off Date minus the Reserve. The balance of
the purchase price in respect of each Purchase shall be paid after the
Investment has been reduced to zero as Collections are received by the
Purchaser provided that such balance 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 sum of (i) the Aggregate Principal Balance on the
Settlement Date immediately prior to the most recent Purchase Date and (ii)
the Purchase Principal Balance on the last 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
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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
Purchased Receivable affected by such breach for the Purchase Amount thereof.
The Seller shall pay and account for the amount so payable as a Collection
with respect to such 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.
(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
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(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, 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
in respect of the initial Purchase and following each Purchase the amount per
annum specified in the Purchase Request effective as of the date set out in
the Purchase Request, in each case 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.
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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 in respect of each 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 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 a 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
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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 or opinions 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 satisfactory to the Administrative Agent
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 each 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 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 in respect of
the initial Purchase and in respect of a subsequent Purchase the amount, if
any, specified in the Purchase Request, in each case 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
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respect to such Purchases and (ii) an interest rate cap fee to the Purchaser
in the amount of $616,000 in respect of the initial Purchase and in respect
of a subsequent Purchase the amount specified in the Purchase Request, in
each case 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. 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.
<PAGE>
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SECTION 5.3. Advances.
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.
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
<PAGE>
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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 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; This
document, in part and in whole, is confidential
and proprietary. Any duplication, dissemination,
or use of any portion of this document without the
express written consent of Chrysler Credit Canada
Ltd. is strictly prohibited.
<PAGE>
- 19 -
(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 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
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
<PAGE>
- 20 -
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 each 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 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 initial Cut-Off
Date and shall continue in full force and effect until terminated pursuant to
this Section 6.5. If the Seller shall cease to be the 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 as
of each Purchase Date:
<PAGE>
- 21 -
(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.
(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
related Purchase Date and the Receivables and Collections
are free and clear of any Adverse Claim, except as created
by this Agreement; upon consummation of a 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
<PAGE>
- 22 -
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:
(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;
<PAGE>
- 23 -
(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
(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
<PAGE>
- 24 -
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.
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 of each Purchase, mark its
master data processing records relating to the Purchased Receivables relating
to such Purchase 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.
<PAGE>
- 25 -
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;
(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 24, 1997
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
<PAGE>
- 26 -
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 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.
<PAGE>
- 27 -
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 any 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.
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: 2700 Matheson Boulevard East
East Tower, Suite 400
Mississauga, Ontario
L4W 4V9
Attention: Assistant Secretary
Facsimile: 905-629-7961
With a copy to:
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 248-948-3138
<PAGE>
- 28 -
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: 248-948-3138
<PAGE>
- 29 -
CANADIAN MASTER TRUST
by its Administrative Agent,
NESBITT BURNS INC.
as Purchaser
By: "P. Smeeton"
-----------------------------
Title: Securitization and Structured Finance
By: "Christopher Romano"
-----------------------------
Title: Securitization and Structured Finance
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
<PAGE>
- 30 -
NESBITT BURNS INC.,
as Administrative Agent
By: "P. Smeeton"
--------------------------------
Title: Securitization and Structured Finance
By: "Christopher Romano"
--------------------------------
Title: Securitization and Structured Finance
Address: 3rd Floor Podium
1 First Canadian Place
Toronto, Ontario
M5X 1H3
Attention: Managing Director,
Securitization and Structured Finance
Facsimile: 416-359-1910
<PAGE>
EXHIBIT B
Form of Purchase Request
Purchase Request
To: Canadian Master Trust
c/o Nesbitt Burns Inc.
3rd Floor Podium
1 First Canadian Place
Toronto, Ontario
M5X 1H3
(416) 359-1910
This Purchase Request is delivered to you pursuant to Section 2.1 of a
receivables sale agreement dated as of December 18, 1996, as amended and
restated as of November 10, 1997 (the "Receivables Sale Agreement") between
Chrysler Credit Canada Ltd., as Seller, and Canadian Master Trust, as
Purchaser. All capitalized terms used herein, but not otherwise defined
herein, shall have the meaning ascribed to them in the Receivables Sale
Agreement.
The Seller hereby requests the Purchaser to purchase on the date indicated
below the Eligible Receivables, particulars of which are indicated on the
attached schedule, in accordance with and subject to the terms and conditions
of the Receivables Sale Agreement.
Purchase Date:
Cut-Off-Date:
Purchase Principal Balance:
Reserve:
Cash component of purchase price:
Program Fee:
Structuring Fee:
Interest rate cap fee:
<PAGE>
Dated the day of
CHRYSLER CREDIT CANADA LTD.
By:______________________________
(Authorized Officer)
<PAGE>
EXHIBIT C
Form of Assignment
ASSIGNMENT OF PURCHASED ASSETS
Reference is made to the Amended and Restated Receivables Sale
Agreement dated as of November 10, 1997 (the "Receivables Sale Agreement")
between Chrysler Credit Canada Ltd. , as seller and servicer (the "Seller"),
Chrysler Financial Corporation, Canadian Master Trust, as purchaser by its
administrative agent, Nesbitt Burns Inc. (the "Purchaser") and Nesbitt Burns
Inc.
Words and terms with initial capital letters shall have the meaning
given to them in the Receivables Sale Agreement unless otherwise defined
herein.
FOR VALUE RECEIVED, the Seller does hereby sell, transfer and assign
unto the Purchaser, all of the Seller's right, title and interest to and in
the Purchased Assets details of which are contained in Schedule "A" hereto.
This assignment is made without recourse but pursuant to and upon all
of the representations, warranties, covenants and agreements on the part of
the undersigned contained in the Receivables Sale Agreement and is subject
to, governed by, and construed in accordance with, the Receivables Sale
Agreement and the laws of Ontario. In the event of any inconsistency or
conflict between the Receivables Sale Agreement and this assignment, the
provisions of the Receivables Sale Agreement shall govern.
IN WITNESS WHEREOF this assignment has been executed on the day of
November, 1997.
CHRYSLER CREDIT CANADA LTD.
Per:______________________________
Name:
Title:
CANADIAN MASTER TRUST
by its Administrative Agent,
NESBITT BURNS INC.
<PAGE>
Per:______________________________
Name:
Title:
Exhibit 10-ZZZZ
Conformed Copy
RECEIVABLES SALE AGREEMENT
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
PREFERRED RECEIVABLES FUNDING CORPORATION
as a Purchaser,
FALCON ASSET SECURITIZATION CORPORATION,
as a Purchaser
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
Dated as of November 6, 1997
<PAGE>
i
TABLE OF CONTENTS
Page
ARTICLE I: DEFINITIONS 1
ARTICLE II: SALE AND PURCHASE 10
Section 2.1. Sale and Purchase 10
Section 2.2. Purchase Price 10
Section 2.3. Seller's Optional Termination 10
ARTICLE III: FEES AND EXPENSES 11
Section 3.1. Determination of Carrying Costs 11
Section 3.2. Purchase Discount 11
Section 3.3. Carrying Cost True-Up Amount 11
Section 3.4. Program Fee 12
Section 3.5. Servicer Fee 12
Section 3.6. Interest on Unpaid Amounts 12
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE 12
Section 4.1. Conditions Precedent to Purchase 12
Section 4.2. Absence of Liens 13
Section 4.3. Financing Statements 13
Section 4.4. Schedule of Contracts 13
Section 4.5. Seller Resolutions 13
Section 4.6. Servicer Resolutions 13
Section 4.7. Legal Opinion of Counsel to the Seller and
the Servicer 13
Section 4.8. Good Standing Certificates 14
Section 4.9. Representations and Covenants 14
Section 4.10. Other Documents 14
Section 4.11. Up-Front Fee 14
Section 4.12. Hedging 14
Section 4.13. Insolvency 14
ARTICLE V: SETTLEMENT PROCEDURES 14
<PAGE>
ii
Section 5.1. Collections 14
Section 5.2. Application of Collections 14
Section 5.3. Application of Collections on Settlement Dates 15
Section 5.4. Servicer Report 15
ARTICLE VI: SERVICING OF RECEIVABLES 15
Section 6.1. Appointment and Duties of the Servicer 15
Section 6.2. Replacement of the Servicer 16
Section 6.3. Custody of Receivable Files 17
Section 6.4. Duties of the Servicer as Custodian 17
Section 6.5. Effective Period and Termination 18
ARTICLE VII: REPRESENTATIONS AND WARRANTIES 18
Section 7.1. Representations and Warranties of the Seller
and the Servicer 18
ARTICLE VIII: COVENANTS 20
Section 8.1. Affirmative Covenants of the Seller and the Servicer 20
Section 8.2. Reporting Requirements of the Servicer 20
Section 8.3. Negative Covenants of the Seller and the Servicer 21
Section 8.4. Protection of the Purchaser's Interest 21
ARTICLE IX INDEMNIFICATION 22
Section 9.1 Indemnification 22
ARTICLE X: ADMINISTRATIVE AGENT 22
Section 10.1. Appointment of the Administrative Agent 22
Section 10.2. Replacement of the Administrative Agent 23
ARTICLE XI: MISCELLANEOUS 23
Section 11.1. Amendments 23
Section 11.2. Notices 23
Section 11.3. No Waiver; Remedies 23
Section 11.4. Binding Effect; Assignability 23
Section 11.5. Governing Law 24
Section 11.6. Construction of the Agreement 24
<PAGE>
iii
Section 11.7. No Proceedings 24
Section 11.8. Confidentiality 24
Section 11.9. Execution in Counterparts 24
EXHIBITS
EXHIBIT A - Form of Servicer Report
EXHIBIT B - Form of Opinion of Counsel
<PAGE>
page 1
RECEIVABLES SALE AGREEMENT dated as of November __, 1997 among
PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as the
"Seller," CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer," Preferred Receivables Funding Corporation, as a
"Purchaser," FALCON Asset Securitization Corporation, as a "Purchaser," and
The First National Bank of Chicago, as the "Administrative Agent" for the
Purchasers.
ARTICLE I: DEFINITIONS
"Administrative Agent" means The First National Bank of Chicago, or
any replacement thereof under Section 10.2.
"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).
"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 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.
<PAGE>
Page 2
"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 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.
"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 DP x APB
---
360
where PD = Purchase Discount
PF = Program Fee
DSP = the number of days in such Settlement Period
AI = the average daily Investment for such
Settlement Period
SF = Servicer Fee
DP = 30 days, except for the initial Settlement
Period when it shall be the number of days from
the Cut-Off Date to November 30, 1997.
APB = the Aggregate Principal Balance on the first day
of such Settlement Period.
<PAGE>
Page 3
"Carrying Costs True-Up Amount" has the meaning assigned to that term
in Section 3.3.
"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 Liquidation Proceeds.
"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, so long as
the revision or modification is not expected to have a material adverse
effect on Collections, and so long as such revised or modified policies and
practices are not different from those collections policies and practices
used by the Servicer in servicing similar portfolios of retail automotive
receivables, whether owned by the Servicer, the Seller or any third party.
"Credit Facilities" means each of the committed loan facilities,
lines of credit, letters of credit and other forms of credit enhancement
available to a Purchaser which are not Liquidity Facilities.
"Cut-Off Date" means November 4, 1997.
"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
Settlement Period, 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 Settlement Period
and the last calendar day of each of the two immediately preceding Settlement
Periods, to the extent such preceding Settlement Periods exist, and the
denominator of which is the sum of the Aggregate Principal Balance on such
last calendar day of such Settlement Period and on the last calendar day of
each of the two immediately preceding Settlement Periods, to the extent such
preceding Settlement Periods exist.
<PAGE>
Page 4
"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 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, 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 all of its
<PAGE>
Page 5
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 Administrative Agent for the benefit of the
Purchasers, 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 the proceeds
of the Required Insurance has been assigned to the Seller and such
proceeds are fully assignable to the Administrative Agent, for the
benefit of the Purchasers,
(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 balance thereof, (a) the
related Contract requires that payment in full of such outstanding
balance is scheduled to be made not later than 72 months after the date
any interest therein is purportedly transferred to the Purchasers
hereunder and (b) such Outstanding Balance is scheduled to be paid in
equal consecutive monthly installments, unless such Receivable is a
Balloon Payment Receivable, 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 the letter agreement of even date herewith between
the Seller and the Administrative Agent, for itself and for the benefit of
the Purchasers.
"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).
<PAGE>
Page 6
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
applicable Contract.
"Hedging Proceeds" means any amount payable by CFC to the
Administrative Agent under a 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 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.
"Investment" means the aggregate amount of cash paid by the
Purchasers 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 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,
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.
<PAGE>
Page 7
"Liquidity Facilities" means each of the committed loan facilities,
lines of credit, standby asset purchase agreements and other financial
accommodations available to a Purchaser to support the liquidity of such
Purchaser's commercial paper notes and medium term notes.
"Net Loss" for a Settlement Period means the sum of the Aggregate
Principal Balance of all Purchased Receivables which are deemed to be
uncollectible for such Settlement Period, minus any Liquidation Proceeds
received during such Settlement Period, plus any losses resulting from
disposition expenses paid during such Settlement Period.
"Net Loss Ratio" means, as of the last day of any Settlement Period,
a fraction, expressed as a percentage, the numerator of which is the product
of (i) the sum of the Net Loss for such Settlement Period and the two
immediately preceding Settlement Periods, to the extent such Settlement
Periods exist, and (ii) a factor of 12 divided by the number of Settlement
Periods 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
Settlement Period and the first day of the two immediately preceding
Settlement Periods, to the extent such Settlement Periods exist.
"Obligor" means any Person which is obligated to make payment on a
Receivable.
"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 Balloon
Payment Receivable, the Principal Balance shall not include the Balloon
Payment.
"Program Fee" has the meaning assigned to that term in Section 3.4.
"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
under the terms thereof including interest to the end of the month of
purchase.
"Purchase Date" means November 6, 1997, 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
3.2.
<PAGE>
Page 8
"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 being sold to the Purchasers under this
Agreement.
"Purchaser" means either Preferred Funding Receivables Corporation
and its successors and assigns ("Prefco"), or FALCON Asset Securitization
Corporation and its successors and assigns ("FALCON"), and "Purchasers" means
Prefco and FALCON, collectively.
"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 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
<PAGE>
page 9
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 the amount designated as such in the Fee Letter.
"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 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.
"Servicer Fee" has the meaning assigned to the term in Section 3.5.
"Servicer Report" means the report in the form of Exhibit A hereto to
be provided by the Servicer in accordance with Section 5.4 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 10th day of each month following each
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 Purchase Date and end on November 30, 1997.
"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.
"Up-front Fee" has the meaning assigned to that term in Section 4.11.
<PAGE>
Page 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 Purchasers 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) each of the Purchasers
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) each 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 such 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 aggregate purchase price payable by
Purchasers the 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 Purchasers 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 Purchasers hereunder, all
Collections or other cash received by either Purchaser on account of
Receivables and the interest of such Purchaser therein and all Receivables
held by or on behalf of such Purchaser will be transmitted in the form
received by such Purchaser to the Seller. The transmission of such amount by
such 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 that is less than ten percent (10%) of the Aggregate
Principal Balance on the Purchase Date, to repurchase from the Purchasers
on any subsequent Settlement Date 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 Purchasers 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 Purchasers or the Administrative Agent.
<PAGE>
Page 11
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. The following items as
outlined in Section 3.2 through Section 3.6 shall be utilized in calculating
the amount of Carrying Costs to be distributed each Settlement Period out of
Collections of Purchased Receivables.
SECTION 3.2. Purchase Discount. A Purchase Discount equal to the
weighted average of the following:
(a) 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 Purchasers to (x) purchase receivables, or extend
financing secured thereby, at a fixed interest rate or (y) conduct any
arbitrage activities of the Purchasers), converted to an annual
yield-equivalent rate on the basis of a 360-day year;
(b) 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
(c) the weighted average of the annual interest rates applicable to
any Liquidity Facilities under which the Purchasers have borrowed loans
during the related Settlement Period (which loans shall be borrowed only
after a determination by the Purchasers 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 funding 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 and
or any Credit Facility shall not exceed the reserve adjusted "LIBO Rate"
quoted by the Administrative Agent plus 0.50 % (50 basis points) per
annum.
SECTION 3.3. Carrying Cost True-Up Amount. 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
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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 5.3(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 5.3(i) shall be decreased by an amount equal to the
Carrying Costs True-Up Amount.
Section 3.4. Program Fee. A Program Fee equal to the amount
designated as such in the Fee Letter, which amount 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.
Section 3.5. 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 Principal Balance of Purchased Receivables on the first day of such
Settlement Period, shall be remitted by the Purchasers 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 5.3.
Section 3.6. Interest on Unpaid Amounts. To the extent that the Seller
or Servicer fails to pay when due to the Purchasers 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 2.00% (200 basis points) 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 as outlined in Section 4.2 through Section 4.11 must be
satisfied before the Purchasers will make the Purchase:
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Section 4.2. 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 4.3. 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 Purchasers' interest in the Purchased Receivables, the
Related Security and the Collections.
Section 4.4. Schedule of Contracts. The Administrative Agent will have
received and approved the Schedule of Contracts.
Section 4.5. Seller Resolutions. The Administrative 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;
(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 4.6. 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 restated
articles of incorporation and by-laws of the Servicer.
Section 4.7. 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
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Exhibit B, together with such other matters as the Administrative Agent or a
Purchaser may reasonably request.
Section 4.8. 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 4.9. 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 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 4.10. Other Documents. The Administrative Agent and each
Purchaser will have received all other documents that either of them had
reasonably requested from the Seller or the Servicer.
SECTION 4.11. Up-Front Fee. The Seller shall have paid a fee to the
Administrative Agent at Closing in the amount designated in the Fee Letter as
the "Up-Front Fee," which amount shall include all up-front 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 4.12. Hedging. The Agent shall have received one or more duly
executed, valid and enforceable interest rate protection agreement in form
and substance satisfactory to the Administrative Agent.
SECTION 4.13 Insolvency: No Insolvency Event has occurred and is
continuing with respect to the Seller or the Servicer.
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall remit 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. All Collections for the
Settlement Period shall be applied by the Servicer as follows:
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(a) with respect to each payment by or on behalf of the Obligor shall
be applied to interest and principal in accordance with the Simple
Interest Method with excess payments applied to principal; and
(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. 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
Purchasers or their respective assigns (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
3.3) and (ii) second, all remaining Collections as a reduction to the
Investment.
Section 5.4. Servicer Report. The Servicer will provide the
Purchasers, either in writing or electronically, with a Servicer Report
with respect to each Settlement Period no later than three Business Days
before the Settlement Date.
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of the Servicer. The Purchasers
and the Seller each hereby appoint CFC as the Servicer and CFC accepts such
appointment. The Servicer, for the benefit of the Purchasers (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 Purchasers 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 Purchasers. The Purchasers shall
upon the written request of the Servicer furnish the Servicer with any powers
of attorney and other documents reasonably
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necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties hereunder.
SECTION 6.2. Replacement of the 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, 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 a 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 a 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, either
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 Purchasers, 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 Purchasers all records,
correspondence and documents requested by the Purchasers 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
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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 Purchasers and
the Administrative Agent may (a) notify Obligors of the ownership
interest of the Purchasers hereunder in the Purchased Receivables and the
Related Security, (b) notify each issuer of an Insurance Policy of the
ownership interest of the Purchasers 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
Purchasers hereunder on each Certificate of Title relating to each
Financed Vehicle and (ii) the Purchasers 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
Purchasers and the Seller hereby irrevocably appoint the Servicer, and the
Servicer hereby accepts such appointment, to act for the benefit of the
Purchasers 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 (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 the Servicer as Custodian. The Servicer shall
hold the Receivable Files as custodian for the benefit of the Seller and the
Purchasers 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
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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 Purchasers. The Purchasers 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 and the
Servicer. Each of the Seller and the Servicer makes, with respect to itself,
the following representations and warranties to the Purchasers and their
respective assigns:
(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 or other powers, have been duly authorized by all necessary
corporate or other 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
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the exercise by the Purchasers of their respective rights and remedies
under the Sale Documents, except for the filing of the financing
statements referred to in Section 4.3;
(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 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 Purchasers in the Purchased Receivables;
(f) immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to 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 Purchasers will acquire good and marketable title to
the Purchased Receivables and to the Related Security and the Collections
with respect thereto, free and clear of any Adverse Claim, except as
created by this Agreement, and such transfer has been perfected under the
Uniform Commercial Code enacted in the State of Michigan;
(g) the information provided by the Seller to the Servicer for use in
each Servicer Report prepared under Section 5.4 and all information
(including, but not limited to, the Schedule of Contracts) 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
Purchasers as a sale for purposes of generally accepted accounting
principles;
(i) no selection procedures believed by the Seller to be adverse to
the Purchasers and of which the Purchasers had no actual knowledge were or
will be used in selecting the Receivables for purchase hereunder,
(j) each of the Contracts on the Schedule of Contracts gives rise to
an Eligible Receivable, and
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(k) there has been no material change in any Credit and Collection
Policy that would have a material adverse effect on the performance of the
Receivables.
ARTICLE VIII: COVENANTS
SECTION 8.1. Affrimative Covenants of the Seller and the Servicer.
Until the Investment is reduced to zero and all other amounts due to the
Purchasers hereunder have been paid in full, each of the Seller and the
Servicer (with respect to itself) will, unless the Purchasers have 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 and with all applicable laws with regard to each Purchased
Receivable and any Contract related to such Receivable; and
(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 Purchasers hereunder
have been paid in full, the Servicer will, unless the Purchasers shall
otherwise consent in writing, furnish to the Purchasers:
(a) the Servicer Report as required under Section 5.4;
(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 Person(s) affected thereby of: (i) the
occurrence of any Servicer Default or event which with
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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 Purchasers 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 Purchasers
hereunder have been paid in full, neither the Seller nor the Servicer will,
unless the Purchasers have 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, 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 Purchasers' Interest. Until the Investment
is reduced to zero and all other amounts due to the Purchasers 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 reasonably request in order to perfect,
evidence and protect the validity, enforceability, perfection and priority
of the Administrative Agent's and the Purchasers' interests in the
Purchased Receivables, the Related Security and the Collections and to
enable the Administrative Agent and/or the Purchasers 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 Administrative Agent's and the Purchasers' 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,
provided, however, that the Seller is not required to deliver the
Contracts to anyone other than the Servicer. 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
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the Seller's signature. A reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement.
ARTICLE IX: INDEMNIFICATION
SECTION 9.1. Indemnification. Without limiting any other rights which
the Agent or any Purchaser may have hereunder or under applicable law, the
Seller and the Servicer each agree to indemnify the Agent, the Purchasers and
any assign of any Purchaser, and each of their respective officers,
directors, agents and employees (each of the foregoing, an "Indemnified
Party") from and against any and all damages, losses, claims, taxes,
liabilities, costs, expenses and for all other amounts, payable, including
reasonable attorneys' fees (which attorneys may be employees of the Agent or
such Purchaser or assign) and all disbursements awarded against or incurred
by any of them (any or all of the foregoing, an "Indemnity Claim") out of, or
as a result of:
(a) any breach of any representation, warranty or covenant by the
Seller or Servicer;
(b) any untrue statements of material fact or untrue or materially
inaccurate information provided by the Seller or Servicer regarding the
Receivables or in any Servicer Report, the Schedule of Contracts, the
Credit and Collection Policy or any other information provided to the
Administrative Agent or either Purchaser with respect to this
transaction;
(c) enforcement of this Agreement and any other documents delivered
hereunder; and
(d) any lawsuits, disputes or claims brought against the Agent,
either Purchaser or any of either Purchaser's assigns by any third party
arising out of or as a result of the existence of this Agreement;
provided, however, that neither the Seller nor the Servicer shall be liable
to any Indemnified Party to the extent that the final judgment of a court of
competent jurisdiction holds that such Indemnity Claim resulted from the
gross negligence or willful misconduct of such Indemnified Party.
ARTICLE X: ADMINISTRATIVE AGENT
SECTION 10.1. Appointment of the Administrative Agent. The Purchasers
have appointed The First National Bank of Chicago 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 Purchasers have granted the
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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 Purchasers under this
Agreement.
SECTION 10.2. Replacement of the Administrative Agent. The Purchasers
may, at any time in its discretion, remove the 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. 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. 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 either
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 inure to the benefit of the Seller, the Servicer, the
Purchasers, 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 Purchasers. Each of
the Purchasers 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, other than an assignment by
such Purchaser to the Administrative Agent or to a liquidity provider with
respect to a Liquidity Facility, the consent of the Seller (which consent
shall not be unreasonably withheld) shall be required. 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 Purchasers
<PAGE>
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hereunder have been paid in full; provided, however, that the rights and
remedies of the Purchasers under Article IX shall survive any termination of
this Agreement.
SECTION 11.5. 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 11.6. Construction of the Agreement. The parties hereto intend
that the conveyance of the interest in the Purchased Receivables by the
Seller to the Purchasers 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 Purchasers to the Seller under applicable law. For such
purpose, the Seller hereby grants to the Purchasers a continuing security
interest in the Receivables listed on the Schedule of Contracts and the
Related Security and Collections related thereto to secure the obligations of
the Seller to the Purchasers hereunder.
SECTION 11.7. No Proceedings. The Seller, the Administrative Agent
and the Servicer each hereby agrees that it will not institute against either
Purchaser any bankruptcy, reorganization, insolvency or similar proceeding
until the date which is one year and one day since the last day on which any
commercial paper notes or medium term notes issued by such Purchaser shall
have matured.
SECTION 11.8. Confidentiality. Each 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 such Purchaser may, with advance 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 11.9. 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.
<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: D. H. Olsen
-------------------------
Title: Assistant Treasurer
----------------------
of Premier Auto Receivables Company,
a Member of the Seller
Address: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Assistant Secretary
Facsimile: 248-948-3138
CHRYSLER FINANCIAL CORPORATION
as Servicer
By: D. H. Olsen
-------------------------
Title: Assistant Treasurer
----------------------
Address: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Assistant Secretary
Facsimile: 248-948-3138
<PAGE>
Preferred Receivables Funding Corporation,
as a Purchaser
By:/s/ John J. Loy
---------------------
Authorized Signer
Address:
c/o The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670-0079
Attn: John J. Loy
Facsimile: 312-732-1844
FALCON Asset Securitization Corporation,
as a Purchaser
By:/s/ John J. Loy
--------------------
Authorized Signer
Address:
c/o The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670-0079
Attn: John J. Loy
Facsimile: 312-732-1844
<PAGE>
The First National Bank of Chicago,
as Administrative Agent
By:/s/ Georgy Ann Peluchiwski
--------------------------
Authorized Signer
Address:
One First National Plaza
Chicago, IL 60670-0597
Attn: John J. Loy
Facsimile: 312-732-3205
Exhibit 10-AAAAA
CONFORMED COPY
RECEIVABLES SALE AGREEMENT
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
RECEIVABLES CAPITAL CORPORATION
as Purchaser
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
Dated as of November 20, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS................................................... 4
ARTICLE II: SALE AND PURCHASE............................................ 11
SECTION 2.1. Sale and Purchase.................................. 11
SECTION 2.2. Purchase Price..................................... 11
SECTION 2.3. Seller's Optional Termination...................... 11
ARTICLE III: FEES AND EXPENSES........................................... 12
SECTION 3.1. Determination of Carrying Costs.................... 12
SECTION 3.2. Purchase Discount.................................. 12
SECTION 3.3. Carrying Cost True-Up Amount....................... 13
SECTION 3.4. Program Fee........................................ 13
SECTION 3.5. Servicer Fee....................................... 13
SECTION 3.6. Interest on Unpaid Amounts......................... 14
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE ............................ 14
SECTION 4.1. Conditions Precedent to Purchase................... 14
SECTION 4.2. Absence of Liens................................... 14
SECTION 4.3. Financing Statements............................... 14
SECTION 4.4. Schedule of Contracts.............................. 14
SECTION 4.5. Seller Resolutions................................. 14
SECTION 4.6. Servicer Resolutions............................... 15
SECTION 4.7. Legal Opinion of Counsel to the Seller and
the Servicer..................................... 15
SECTION 4.8. Good Standing Certificates......................... 15
SECTION 4.9. Representations and Covenants...................... 15
SECTION 4.10. Other Documents.................................... 15
SECTION 4.11. Up-Front Fee....................................... 15
ARTICLE V: SETTLEMENT PROCEDURES......................................... 16
SECTION 5.1. Collections........................................ 16
SECTION 5.2. Application of Collections......................... 16
SECTION 5.3. Application of Collections on Settlement Dates..... 16
SECTION 5.4. Servicer Report.................................... 16
ARTICLE VI: SERVICING OF RECEIVABLES..................................... 17
SECTION 6.1. Appointment and Duties of the Servicer............. 17
SECTION 6.2. Replacement of the Servicer........................ 17
SECTION 6.3. Custody of Receivable Files........................ 18
SECTION 6.4. Duties of the Servicer as Custodian................ 19
SECTION 6.5. Effective Period and Termination................... 19
ARTICLE VII: REPRESENTATIONS AND WARRANTIES.............................. 20
<PAGE>
SECTION 7.1 Representations and Warranties of the
Seller and the Servicer.......................... 20
ARTICLE VIII: COVENANTS.................................................. 22
SECTION 8.1. Affirmative Covenants of the Seller and
the Servicer..................................... 22
SECTION 8.2. Reporting Requirements of the Servicer............. 22
SECTION 8.3. Negative Covenants of the Seller and the Servicer.. 23
SECTION 8.4. Protection of the Purchaser's Interest............. 23
ARTICLE IX: ADMINISTRATIVE AGENT ........................................ 24
SECTION 9.1. Appointment of the Administrative Agent............ 24
SECTION 9.2. Replacement of the Administrative Agent............ 24
ARTICLE X: MISCELLANEOUS................................................. 24
SECTION 10.1. Amendments........................................ 24
SECTION 10.2. Notices........................................... 24
SECTION 10.3. No Waiver; Remedies............................... 25
SECTION 10.4. Binding Effect; Assignability..................... 25
SECTION 10.5. Governing Law..................................... 25
SECTION 10.6. Construction of the Agreement..................... 25
SECTION 10.7. No Proceedings.................................... 25
SECTION 10.8. Confidentiality................................... 26
SECTION 10.9. Execution in Counterparts......................... 26
<PAGE>
RECEIVABLES SALE AGREEMENT dated as of November 20, 1997
among PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as
the "Seller", CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer", RECEIVABLES CAPITAL CORPORATION, as the "Purchaser" and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as the
"Administrative Agent" for the Purchaser.
ARTICLE I: DEFINITIONS
"Administrative Agent" means Bank of America National Trust
and Savings Association or any replacement thereof under Section 9.2.
"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).
"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 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.
<PAGE>
"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 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.
"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 DP x APB
---
360
where PD = Purchase Discount
PF = Program Fee
DSP = the number of days in such
Settlement Period
AI = the average daily Investment for such
Settlement Period
SF = Servicer Fee
2
<PAGE>
DP = 30 days, except for the initial
Settlement Period when it shall be the
number of days from the Cut-Off
Date to November 30, 1997
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 3.3.
"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 Liquidation Proceeds.
"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 November 14, 1997.
"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.
3
<PAGE>
"Delinquency Ratio" means, as of the last calendar day of any
Settlement Period, 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 Settlement Period
and the last calendar day of each of the two immediately preceding Settlement
Periods, to the extent such preceding Settlement Periods exist, and the
denominator of which is the sum of the Aggregate Principal Balance on such
last calendar day of such Settlement Period and on the last calendar day of
each of the two immediately preceding Settlement Periods, to the extent such
preceding Settlement Periods 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 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, counterclaim or other defense, and (b) with respect to
which (1) no default, breach, violation, or event permitting
acceleration under the
4
<PAGE>
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 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 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, 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
the proceeds of the Required Insurance has been assigned to the Seller
and such proceeds are fully assignable to the Administrative Agent, for
the benefit of the Purchaser,
(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,
5
<PAGE>
(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 not later than 72 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 is a
Balloon Payment Receivable, 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 between the Seller and the Administrative Agent, on its own behalf
and that of the Purchaser.
"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.
"Hedging Proceeds" means any amount payable by CFC to the
Administrative Agent under a 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
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
6
<PAGE>
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.
"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 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,
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,
asset purchase 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.
"Net Loss" for a Settlement Period means the sum of the Aggregate
Principal Balance of all Purchased Receivables which are deemed to be
uncollectible for such Settlement Period, minus any Liquidation Proceeds
received during such Settlement Period, plus any losses resulting from
disposition expenses paid during such Settlement Period.
"Net Loss Ratio" means, as of the last day of any Settlement Period,
a fraction, expressed as a percentage, the numerator of which is the product
of (i) the sum of the Net Loss for such Settlement Period and the two
immediately preceding Settlement Periods, to the extent such Settlement
Periods exist, and (ii) a factor of 12 divided by the number of Settlement
Periods 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
Settlement Period
7
<PAGE>
and the first day of the two immediately preceding Settlement Periods, to the
extent such Settlement Periods exist.
"Obligor" means any Person which is obligated to make payment on a
Receivable.
"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 Balloon
Payment Receivable, the Principal Balance shall not include the Balloon
Payment.
"Program Fee" has the meaning assigned to that term in Section 3.4.
"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
under the terms thereof including interest to the end of the month of
purchase.
"Purchase Date" means November 20, 1997.
"Purchase Discount" has the meaning assigned to that term in
Section 3.2.
"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 being sold to Purchaser under this
Agreement.
"Purchaser" means Receivables Capital 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.
8
<PAGE>
"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 market value of the applicable Financed Vehicle,
and (iv) that has the Servicer noted as the loss payee thereon.
"Reserve" means the amount designated as such in the Fee Letter.
"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 or CFC in connection with
the transactions contemplated in this Agreement.
9
<PAGE>
"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.
"Servicer Fee" has the meaning assigned to the term in Section 3.5.
"Servicer Report" means the report in the form of Exhibit A hereto
to be provided by the Servicer in accordance with Section 5.4 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 10th day of each month following each
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 Purchase Date and end on November 30, 1997.
"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.
"Up-front Fee" has the meaning assigned to that term in Section 4.11.
10
<PAGE>
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 Administrative Agent for
the account of 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) each of the Administrative Agent and 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) each of the Administrative Agent and 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 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
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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.
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. The following items as
outlined in Section 3.2 through Section 3.6 shall be utilized in calculating
the amount of Carrying Costs to be distributed each Settlement Period out of
Collections of Purchased Receivables.
SECTION 3.2. Purchase Discount. A Purchase Discount equal to the
weighted average of the following:
(a) 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;
(b) 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 (a) above), on the basis of a 360-day
year; and
(c) 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 Agent in its sole and absolute discretion
that financing the Purchaser's 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
assignment of an interest 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 assignment,
(including any discount rates in a transaction structured as a sale)
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provided, further, that, for purposes of the foregoing, the interest rates
applicable under any Liquidity Facility and or any Credit Facility shall not
exceed the greater of (i) the reserve adjusted "LIBO Rate" quoted by the
Administrative Agent plus 0.50% per annum or (ii) the sum of (x) the interest
rate then payable under the Long Term Revolving Credit Agreement, dated as of
April 24, 1997 (as amended from time to time) among CFC, Chrysler Credit
Canada Ltd., the Banks listed therein and The Chase Manhattan Bank as agent,
plus (y) 0.25% per annum.
SECTION 3.3. Carrying Cost True-Up Amount. 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 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 5.3(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 5.3(i) shall be decreased by an amount equal to the
Carrying Costs True-Up Amount.
SECTION 3.4. Program Fee. A Program Fee equal to the amount
designated as such in the Fee Letter, which Program 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.
SECTION 3.5. 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 Principal Balance of 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
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to the Servicer) out of amounts required to be remitted by the Servicer in
accordance with Section 5.3.
SECTION 3.6. 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% 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 as outlined in Section 4.2 through Section 4.11 must be satisfied
before the Purchaser will make the Purchase:
SECTION 4.2. 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 4.3. 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 4.4. Schedule of Contracts. The Administrative Agent will
have received the Schedule of Contracts.
SECTION 4.5. Seller Resolutions. The Administrative 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;
(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
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(c) the completeness and correctness of the attached articles of
organization and operating agreement of the Seller.
SECTION 4.6. 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 restated
articles of incorporation and by-laws of the Servicer.
SECTION 4.7. 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 4.8. 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 4.9. 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 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 4.10. 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.
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SECTION 4.11. Up-Front Fee. The Seller shall have paid a fee to the
Administrative Agent at Closing in the amount specified in the Fee Letter as
the Up-Front Fee, which Up-Front Fee shall include all up-front expenses,
including but not limited tolegal fees, filing and administrative fees,
rating agency fees, liquidity and credit enhancement fees incurred with
respect to the Purchase.
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall remit 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. All Collections for the
Settlement Period shall be applied by the Servicer as follows:
(a) with respect to each payment by or on behalf of the Obligor
shall be applied to interest and principal in accordance with the Simple
Interest Method with excess payments applied to principal; and
(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. 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 3.3) and (ii) second, all remaining Collections as a
reduction to the Investment.
SECTION 5.4. 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 3 Business Days before the
immediately following Settlement Date.
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ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of the 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 (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 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 will, at its option, 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 the 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, 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
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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 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.
(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 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.
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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 constructivelydelivered to the
Administrative 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 the 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 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 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
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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 (including in its capacity as
the originator of the Receivables) makes, with respect to itself and with
respect to the Receivables as described in clauses (f), (i) and (j) below),
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, and the Seller's use of the proceeds of
the Purchases, are within the Seller's and the Servicer's respective
corporate or other powers, have been duly authorized by all necessary
corporate or other 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;
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(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 Purchaser in the Purchased Receivables;
(f) immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to the
Receivables, the Related Security and Collections, free and clear of any
Adverse Claim (including any Adverse Claim arising by or through CFC),
except as created by this Agreement; upon consummation of the Purchase,
the Purchaser will acquire good and marketable title to the Purchased
Receivables and to the Related Security and the Collections with respect
thereto, free and clear of any Adverse Claim, except as created by this
Agreement, and such transfer has been perfected under the Uniform
Commercial Code enacted in the State of Michigan;
(g) the information provided by CFC or the Seller to the Servicer
for use in each Servicer Report prepared under Section 5.4 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;
(i) all such Receivables are Eligible Receivables at the time of
sale and each of the Seller and CFC shall be deemed to have received
collections in full of any such Receivable with respect to which this
representation proves incorrect; and
(j) neither CFC nor the Seller has used or will use any selection
procedures believed by them to be adverse to the Purchaser in selecting
the Receivables to be sold by CFC to the Seller in connection herewith
and by the Seller to the Purchaser
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hereunder except for such procedures to which the Purchaser has consented in
writing.
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 Purchaser 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);
(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 (the Seller and Servicer may only amend and modify
the Credit and Collections Policy if such modification will not have a
material adverse effect on the collectibility of any Receivable); and
(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
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Servicer will, unless the Purchaser shall otherwise consent in writing,
furnish to the Purchaser:
(a) the Servicer Report as required under Section 5.4;
(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 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, 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. 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 reasonably 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
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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 gene rality 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 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 oramendments thereto or assignments thereof as may be requested by
the Administrative Agent, provided, however, that the Seller is not required
to deliver the Contracts to anyone other than the Servicer. 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. A reproduction of this
Agreement or any financing statement shall be sufficient as a financing
statement.
ARTICLE IX: ADMINISTRATIVE AGENT
SECTION 9.1. Appointment of the Administrative Agent. The Purchaser
has appointed Bank of America National Trust and Savings Association 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 9.2. Replacement of the Administrative Agent. The Purchaser
may, at any time in its discretion, remove the 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. 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.
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SECTION 10.2. Notices. 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
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. 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 (other than an assignment to
the Administrative Agent or an Affiliate thereof pursuant to a Liquidity
Facility), the consent of the Seller (which consent shall not be unreasonably
withheld) shall be required. 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 of the
Purchaser under Article IX 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.
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
25
<PAGE>
to the Purchaser a continuing security interest in the Purchased Receivables
and the Related Security and Collections related thereto to secure the
obligations 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 against the
Purchaser any bankruptcy, reorganization, insolvency or similar proceeding
until the date which is one hundred twenty-three (123) days since the last
day on which any commercial paper notes or medium term notes issued by the
Purchaser shall have matured.
SECTION 10.8. 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 advance 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 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.
26
<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/ D.H. Olsen
--------------------------------------
Title: Assistant Treasurer of Premier Auto
Receivables Company, a Member of
the Seller
Address: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Assistant Secretary
Facsimile: 248-948-3138
CHRYSLER FINANCIAL CORPORATION,
as Servicer
By: /s/ D.H. Olsen
--------------------------------------
Title: Assistant Treasurer
Address: 27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Assistant Secretary
Facsimile: 248-948-3138
RECEIVABLES CAPITAL CORPORATION
as Purchaser
By: /s/ K. Carter Harris
--------------------------------------
Address: c/o MERRILL LYNCH MONEY
MARKETS, INC.
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281-1311
Attention: Shane Rosenberg
Facsimile: 212-449-8939
27
<PAGE>
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Administrative Agent
By: /s/ Marianne Mihalik
--------------------------------------
Title: Attorney-in-Fact
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Attention: Asset Securitization
Group
Facsimile: 312-828-7855
28
Exhibit 10-BBBBB
Conformed Copy
RECEIVABLES SALE AGREEMENT
Dated as of December 3, 1997
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>
TABLE OF CONTENTS
Page
ARTICLE I: DEFINITIONS.................................................. 1
ARTICLE II: THE SALE AND PURCHASE....................................... 13
SECTION 2.1. Sale and Purchase.................................... 13
SECTION 2.2. Purchase Price....................................... 14
SECTION 2.3. Seller's Optional Termination........................ 14
ARTICLE III: FEES AND EXPENSES.......................................... 15
SECTION 3.1. Determination of Carrying Costs..................... 15
(a) Purchase Discount.................................. 15
(b) Servicer Fee....................................... 17
SECTION 3.2. Interest on Unpaid Amounts.......................... 17
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE............................ 17
SECTION 4.1. Conditions Precedent to Purchase..................... 17
(a) Absence of Liens................................... 17
(b) Financing Statements............................... 17
(c) Schedule of Contracts.............................. 18
(d) Seller Resolutions................................. 18
(e) Servicer Resolutions............................... 18
(f) Legal Opinion of Counsel to the Seller
and the Servicer................................. 19
(g) Good Standing Certificates......................... 19
(h) Representations and Covenants...................... 19
(i) Other Documents.................................... 19
(j) Upfront Fee........................................ 19
ARTICLE V: SETTLEMENT PROCEDURES........................................ 19
SECTION 5.1. Collections.......................................... 20
SECTION 5.2. Application of Collections........................... 20
SECTION 5.4. Application of Collections on Settlement Dates....... 20
SECTION 5.5. Servicer Report...................................... 21
SECTION 5.6. Repurchase Obligations............................... 21
ARTICLE VI: SERVICING OF RECEIVABLES.................................. 21
SECTION 6.1. Appointment and Duties of Servicer................... 21
SECTION 6.2. Replacement of Servicer.............................. 22
SECTION 6.3. Custody of Receivable Files.......................... 24
SECTION 6.4. Duties of Servicer as Custodian...................... 25
SECTION 6.5. Effective Period and Termination..................... 25
ARTICLE VII: REPRESENTATIONS AND WARRANTIES............................. 25
SECTION 7.1. Representations and Warranties of the
Seller and the Servicer......................... 25
i
<PAGE>
ARTICLE VIII: COVENANTS................................................ 27
SECTION 8.1. Affirmative Covenants of the Seller and
the Servicer....................................... 27
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: AGENT...................................................... 30
SECTION 9.1. Appointment of Agent................................. 30
ARTICLE X: MISCELLANEOUS............................................... 30
SECTION 10.1. Amendments, Etc..................................... 30
SECTION 10.2. Notices, Etc........................................ 31
SECTION 10.3. No Waiver; Remedies................................. 31
SECTION 10.4. Binding Effect; Assignability....................... 31
SECTION 10.5. Governing Law....................................... 32
SECTION 10.6. Construction of the Agreement....................... 32
SECTION 10.7. No Proceedings...................................... 32
SECTION 10.8. Confidentiality..................................... 33
SECTION 10.9. Execution in Counterparts........................... 33
SECTION 10.10. Indemnification by Seller of Investors, etc........ 33
EXHIBITS
EXHIBIT A - Form of Servicer Report
EXHIBIT B - Form of Opinion of Counsel
ii
<PAGE>
RECEIVABLES SALE AGREEMENT, dated as of December 3, 1997, 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
"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
.
1
<PAGE>
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>
"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 DP x APB
---
360
where PD = Purchase Discount
PF = Program Fee
SF = Servicer Fee
DSP = the number of days in such Settlement
Period
DP = thirty days, except for the initial
Settlement Period when it shall be the number
of days from the Cut-Off Date to December 31,
1997
AI = the average daily Investment for 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(a).
"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.
.
3
<PAGE>
"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 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, 1997.
"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 November 25, 1997.
"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>
"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, counterclaim or other defense, and (b) with respect
to which (x) no default,
5
<PAGE>
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 is in full force and effect, and the proceeds of the
Required Insurance has
6
<PAGE>
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 three months
after, and (2) not later than 72 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, as the same may be amended from time to time.
"Finance Charges" means, with respect to any Receivable and its
related Contract, any finance, interest or similar charges paid by an Obligor
pursuant to such Contract, including, without limitation, any charge paid 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.
7
<PAGE>
"Hedging Proceeds" means any amount payable by CFC to the Agent
under an interest rate cap confirmation, dated as of December 3, 1997, 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.
"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
8
<PAGE>
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.
"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.
"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.
"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.
"Obligor" means any Person which is obligated to make
payment on a Receivable.
"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.
9
<PAGE>
"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 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(a).
"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. Each
Purchased Receivable is a Simple Interest Receivable.
"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.
.
10
<PAGE>
"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 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
.
11
<PAGE>
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 5.5% of the Investment as of
the Purchase Date, which will be delivered in the form of Receivables.
"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(b).
"Servicer Report" means the report in the form of Exhibit A
hereto to be provided by the Servicer in accordance with Section 5.4 of this
Agreement, which report shall include a calculation of the Delinquency Ratio
and the Net Loss Ratio for the applicable month.
.
12
<PAGE>
"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).
"Settlement Period" means a calendar month, provided, that, for
purposes of the initial Settlement Period, such period shall commence as of
the Purchase Date and end on December 31, 1997.
"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
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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. Optional Termination. Chrysler Financial Corporation
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 purchase 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 purchase 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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ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. In calculating the
amount of Carrying Costs to be distributed each Settlement Period out of
Collections of Purchased Receivables:
(a) Purchase Discount.
(i) "Purchase Discount" shall mean an amount equal to the
weighted average of the following:
(1) 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;
(2) 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 (1) above), on the basis of a 360-day year; and
(3) 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
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borrowing or sale, provided, further, that, for purposes of the
foregoing, the interest rates applicable under any 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.
(ii) Two Business Days prior to the end of each Settlement
Period, the Agent shall determine the Purchase Discount pursuant to
(i) 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.
(b) Servicer Fee. "Servicer Fee" shall mean 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; the Servicer Fee shall be remitted by the
Purchaser to the Servicer from Collections received pursuant to Article V
hereof. If CFC is acting
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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 5.3(a).
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:
(a) 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.
(b) 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.
(c) Schedule of Contracts. The Agent will have received the
Schedule of Contracts.
(d) Seller Resolutions. The Agent will have received a
certificate of the Seller attesting to:
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(i) 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;
(ii) 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
(iii) the completeness and correctness of the attached
articles of organization and operating agreement of the Seller.
(e) Servicer Resolutions. The Agent will have received a
certificate of the Servicer's Secretary or Assistant Secretary attesting to:
(i) 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;
(ii) the names and signatures of the officers of the Servicer
authorized to execute the Sale Documents to be executed by the
Servicer; and
(iii) the completeness and correctness of the attached
restated articles of incorporation and by-laws of the Servicer.
(f) 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.
(g) 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.
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(h) 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 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.
(i) Other Documents. The Agent will have received all other
documents that the Agent had reasonably requested from the Seller or the
Servicer.
(j) 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 and
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.
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SECTION 5.2. Application of Collections. All collections for the
Collection Period shall be applied by the Servicer as follows:
(a) With respect to each Receivable (other than a Balloon Payment
Receivable), payments by or on behalf of the Obligor 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.
(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. 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 (a) 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(a)(ii)) and (b) second, all remaining
Collections as a reduction to Investment.
SECTION 5.4. 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 5.5. 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
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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 5.5 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 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;
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(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,
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
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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.
(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
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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 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) 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
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
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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 and 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 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) any law or 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(b).
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(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 Receivables 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 5.4 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.
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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 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).
(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:
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(a) the Servicer Report as required under Section 5.4;
(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 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
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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.
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,
29
<PAGE>
on behalf of the Investors, and in the case of any amendment, by the Seller
and the Servicer 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.
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
30
<PAGE>
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 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
31
<PAGE>
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
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
32
<PAGE>
(c) the commingling of Collections of Purchased Receivables at
any time with other funds.
33
<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.
SELLER PREMIER RECEIVABLES L.L.C.
By: /s/ D. M. Cantwell
---------------------------------------
Name: Dennis M. Cantwell
Title: Vice President and Treasurer of
Premier Auto Receivables Company,
a Member of the Seller
Address: 27777 Franklin Road
Southfield, MI 48034
Attention: Assistant Treasurer
Tel. No.: 248-948-3067
Facsimile: 248-948-3138
SERVICER CHRYSLER FINANCIAL
CORPORATION
By: /s/ D. M. Cantwell
---------------------------------------
Name: Dennis M. Cantwell
Title: Vice President and
Treasurer
Address: 27777 Franklin Road
Southfield, MI 48034
Attention: Assistant Secretary
Tel. No.: 248-948-3067
Facsimile: 248-948-3138
34
<PAGE>
PURCHASER OLD LINE FUNDING CORP.
By: ROYAL BANK OF CANADA,
as attorney in fact
By: /s/ S. J. Grossnickle
-----------------------------------
Name: Stephan J. Grossnickle
Title: Managing Director
By: /s/ D. O. Turton
-----------------------------------
Name: Denham O. Turton
Title: Senior Manager
Address: c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, NY 10005
Attention: Vice President
Tel. No.: (212) 346-9000
Facsimile: (212) 346-9012
35
<PAGE>
AGENT ROYAL BANK OF CANADA
By: /s/ S. J. Grossnickle
---------------------------------------
Name: Stephan J. Grossnickle
Title: Managing Director
By: /s/ D. O. Turton
---------------------------------------
Name: Denham O. Turton
Title: Senior Manager
Address: Financial Square
(corner of Front Street and
Old Slip), 23rd Floor
New York, NY 10005-3531
Attention: Managing Director,
North American
Securitization Group
Tel. No.: (212) 428-6474
Facsimile: (212) 428-2304
36
CONFORMED
COPY
===============================================================================
EXHIBIT 10-CCCCC
RECEIVABLES SALE AGREEMENT
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
WINDMILL FUNDING CORPORATION
as Purchaser
and
ABN AMRO BANK N.V.
as Administrative Agent
Dated as of December 22, 1997
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
ARTICLE I DEFINITIONS..........................................1
ARTICLE II THE SALE AND PURCHASE...............................10
Section 2.1. Sale and Purchase...............................10
Section 2.2. Purchase Price..................................10
Section 2.3. CFC's Optional Termination......................10
ARTICLE III FEES AND EXPENSES...................................11
Section 3.1. Determination of Carrying Costs.................11
Section 3.1.1. Purchase Discount...............................11
Section 3.1.2. Servicer Fee....................................13
Section 3.2. Interest on Unpaid Amounts......................13
ARTICLE IV CONDITIONS PRECEDENT TO PURCHASE....................13
Section 4.1. Conditions Precedent to Purchase................13
Section 4.1.1. Absence of Liens................................13
Section 4.1.2. Financing Statements............................13
Section 4.1.3. Schedule of Contracts...........................13
Section 4.1.4. Seller Resolutions..............................13
Section 4.1.5. Servicer Resolutions............................14
Section 4.1.6. Legal Opinion of Counsel to the Seller
and the Servicer...............................14
Section 4.1.7. Good Standing Certificates......................14
Section 4.1.8. Representations and Covenants...................14
Section 4.1.9. Other Documents.................................14
Section 4.1.10. Upfront Fee.....................................15
ARTICLE V SETTLEMENT PROCEDURES...............................15
Section 5.1. Collections.....................................15
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<PAGE>
Section 5.2. Application of Collections......................15
Section 5.3. Application of Collections on
Settlement Dates...............................15
Section 5.4. Servicer Report.................................15
Section 5.5. Purchase by Servicer Upon Breach................15
ARTICLE VI SERVICING OF RECEIVABLES............................16
Section 6.1. Appointment and Duties of Servicer..............16
Section 6.2. Replacement of Servicer.........................16
Section 6.3. Custody of Receivable Files.....................18
Section 6.4. Duties of Servicer as Custodian.................18
Section 6.5. Effective Period and Termination................18
ARTICLE VII REPRESENTATIONS AND WARRANTIES......................19
Section 7.1. Representations and Warranties
of the Seller and the Servicer.................19
ARTICLE VIII COVENANTS...........................................20
Section 8.1. Affirmative Covenants of the Seller
and the Servicer...............................20
Section 8.2 Reporting Requirements of the Servicer..........21
Section 8.3. Negative Covenants of the Seller
and the Servicer...............................21
Section 8.4. Protection of the Purchaser's Interest..........22
Section 8.5. Servicer Indemnities............................22
ARTICLE IX ADMINISTRATIVE AGENT................................23
Section 9.1. Appointment of Administrative Agent.............23
Section 9.1.1. Replacement of Administrative Agent.............23
ARTICLE X MISCELLANEOUS.......................................23
Section 10.1. Amendments, Etc.................................23
Section 10.2. Notices, Etc....................................23
Section 10.3. No Waiver; Remedies.............................23
Section 10.4. Binding Effect; Assignability...................23
Section 10.5. Governing Law...................................24
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<PAGE>
Section 10.6. Construction of the Agreement...................24
Section 10.7. Agreement Not To Petition.......................24
Section 10.8. Excess Funds....................................24
Section 10.9. Confidentiality.................................25
Section 10.10. Execution in Counterparts.......................25
EXHIBITS
EXHIBIT A......-- Form of Servicer Report
EXHIBIT B......-- Form of Opinion of Counsel
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<PAGE>
RECEIVABLES SALE AGREEMENT dated as of December 22, 1997 among
PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as the
"Seller", CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer", WINDMILL FUNDING Corporation, as the "Purchaser" and ABN
AMRO BANK N.V., as the "Administrative Agent" for the Purchaser.
ARTICLE I
DEFINITIONS
"Administrative Agent" means ABN AMRO BANK N.V. and any replacement
thereof under Section 9.1.1.
"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).
"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 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.
<PAGE>
"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 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 (i) Saturday, Sunday, (ii) a
day on which banks are authorized or required to be closed in New York City
or Chicago, Illinois, or (iii) a day which is a holiday on the Federal
Reserve calendar.
"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 DP x APB
--
360
where PD = Purchase Discount
PF = Program Fee
SF = Servicer Fee
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<PAGE>
DSP = the number of days in such Settlement
Period
AI = the average daily Investment for such
Settlement Period
DP = 30 days, except for the initial Settlement
Period it shall be the number of days
from the Cut-off Date to December 31,
1997.
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.
"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 Liquidation Proceeds.
"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.
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<PAGE>
"Credit Facility Spread" means the per annum spread rate specified as
such in the Fee Letter.
"Cut-Off Date" means December 18, 1997.
"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 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,
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<PAGE>
(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 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
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<PAGE>
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 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, 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 the proceeds of the Required Insurance has
been assigned to the Seller and such proceeds are fully assignable to
the Administrative Agent, for the benefit of the Purchaser,
(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 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 is a Balloon Payment
Receivable, 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 letter agreement dated the date hereof
among the Administrative Agent, the Purchase and the Seller concerning fees
and certain other amounts to be 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
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<PAGE>
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
Administrative Agent under a 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 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.
"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.
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<PAGE>
"Late Payment Penalty Rate" means the rate per annum penalty rate
specified as such in the Fee Letter.
"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 and medium
term notes.
"Liquidity Facility Spread" means the per annum spread rate specified
as such in the Fee Letter.
"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.
"Obligor" means any Person which is obligated to make payment on a
Receivable.
"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.
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<PAGE>
"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, and liquidity and credit
enhancement fees.
"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
under the terms thereof including interest to the end of the month of
purchase.
"Purchase Date" means December 22, 1997, 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 as an Eligible Receivable on the Schedule of Contracts delivered to
the Administrative Agent prior to the Purchase Date being sold to the
Purchaser under this Agreement.
"Purchaser" means Windmill Funding Corporation and its successors and
assigns, including without limitation ABN AMRO Bank N.V., as provider of the
Credit and Liquidity Facilities.
"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.
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"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 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 the product of (a) the Reserve
Percentage and (b) the Investment as of the Purchase Date.
"Reserve Percentage" means the percentage rate specified as such in
the Fee Letter.
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"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.
"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.
"Servicer Fee" has the meaning assigned to the term in Section 3.1.2.
"Servicer Report" means the report in the form of Exhibit A hereto to
be provided by the Servicer in accordance with Section 5.4 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).
"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, 1997.
"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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"Upfront Fee" has the meaning assigned to that term in Section 4.1.10.
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 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, and the Purchaser shall have no other obligation to pay such
deferred payment component.
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Section 2.3. CFC's Optional Termination. CFC 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 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, including Purchase Discount
and Program Fees, 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.
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,
inclusive of dealer fees, 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,
inclusive of dealer fees, outstanding during the related
Settlement Period (other than the commercial paper notes
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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 and Credit Facilities
under which the Purchaser has borrowed loans or transferred
interests in Investment during the related Settlement Period
(which loans shall be borrowed or transfers shall be made only
after a determination by the Purchaser that financing its
Investment during such period by issuing commercial paper
notes would not be practicable or cost-efficient, based on
market conditions, effects on the credit rating of the
Purchaser's commercial paper or otherwise, and, if the
Purchaser determines such circumstances no longer exist, so
the it is advisable for the Purchaser to reacquire Investment,
it shall do so as permitted pursuant to the Credit and
Liquidity Facilities);
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 transfer
of interest in Investment under a Liquidity Facility or a Credit Facility,
the Purchase Discount shall equal the rate or weighted average of the rates,
inclusive of dealer fees for commercial paper notes, applicable to such
issuance, borrowing or transfer, provided, further, that, for purposes of the
foregoing, the interest rate applicable to the Liquidity and Credit
Facilities shall be a rate per annum equal each day to the sum of (a) the
overnight reserve adjusted "Interbank Offered Rate" quoted by the
Administrative Agent on such day (or, if such day is not a Business Day, on
the immediately preceding Business Day) for U.S. Dollar deposits with a term
of 1 day (or, if the following day is not a Business Day, for a term
extending to the first succeeding Business Day), as determined by the
Administrative Agent from time to time whenever any Investment is held under
the Credit and Liquidity Facilities, and (b) (i) the Liquidity Facility
Spread, in the case of the Liquidity Facility, or (ii) the Credit Facility
Spread, in the case of the Credit Facility. At any time that any Investment
is held under the Liquidity and Credit Facilities, 96% of such Investment
shall be held under the Liquidity Facility and 4% under the Credit Facility.
(b) Two Business 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
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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 clause (i) of Section 5.3 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 clause (i) of
Section 5.3 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
Settlement Period, equal to the per annum Service Fee Rate (assuming a 30/360
day basis) of the Principal Balance of 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 5.3.
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 a rate of interest equal to the
sum of (a) 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 (b) the Late Payment Penalty Rate. Changes
in the rate payable hereunder shall be effective on each date on which a
change in the "Prime Rate" is so published.
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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 and that all Purchased Receivables are Eligible
Receivables.
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 (through the Administrative Agent) 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.
Section 4.1.4. Seller Resolutions. The Administrative 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;
(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:
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(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 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 C, 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
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.
Section 4.1.10. Upfront Fee. The Seller shall have paid to the
Administrative Agent at Closing or at the time agreed upon in the Fee Letter
the upfront fee specified in the Fee
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Agreement, which shall include all upfront expenses, including but not
limited to legal fees, filing and administrative fees, rating agency fees,
and liquidity and credit enhancement fees incurred with respect to the
Purchase.
ARTICLE V
SETTLEMENT PROCEDURES
Section 5.1. Collections. The Servicer shall remit Collections as
provided below 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. All Collections for the
Settlement Period shall be applied by the Servicer as follows:
(a) With respect to each Purchased Receivable, payments by or
on behalf of the Obligor shall be applied to interest and principal
in accordance with the Simple Interest Method with excess payments
applied to principal.
(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. 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)) and (ii) second, all remaining Collections as a
reduction to Investment.
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Section 5.4. 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).
Section 5.5. Purchase by Servicer Upon Breach. The Seller, the
Servicer or the Administrative Agent, as the case may be, shall inform the
other parties to this Agreement promptly upon the discovery of any breach of
any representation or warranty made pursuant to Section 4.1.1 or Article VII
or of any agreement made in Article VIII. 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 Receivable
materially and adversely affected by such breach as of such last day. If the
Servicer violates Section 8.3 or otherwise takes any action during any
Settlement Period pursuant to Section 6.1 that impairs the rights of the
Administrative Agent or the Purchaser in any Receivable, the Servicer shall
purchase such Receivable as of the last day of such Settlement Period. In
consideration of the purchase of any Receivable pursuant to either of the two
preceding sentences, the Servicer shall remit the Purchase Amount, and such
repurchased Receivable shall be transferred to the Servicer without recourse,
representation or warranty of any kind. Subject to the provisions of Section
8.5, the sole remedy of the Administrative Agent and the Purchaser with
respect to a breach of representations and warranties pursuant to Section
4.1.1 or Article VII or breach of an agreement contained in Article VIII
shall be to require the Servicer to purchase Receivables pursuant to this
Section.
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 (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 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
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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.
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, 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
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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 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 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.
(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 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 (the "Receivable Files"):
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(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
Purchaser and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the
Seller and 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 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 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.
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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, and the Seller's use of the
proceeds of the Purchases, are within the Seller's and the Servicer's
respective corporate or other powers, have been duly authorized by
all necessary corporate or other 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 4.1.2.
(d) Each Sale Document constitutes the legal, valid and
binding obligation of the Seller and the Servicer, respectively,
enforceable in accordance with its terms.
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(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
Purchaser in the Purchased Receivables.
(f) Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to 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 good and
marketable title to the Purchased Receivables and to the Related
Security and the Collections with respect thereto, free and clear of
any Adverse Claim, except as created by this Agreement, and such
transfer has been perfected under the Uniform Commercial Code enacted
in the State of Michigan.
(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.
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
-24-
<PAGE>
paid in full, each of the Seller and the Servicer (with respect to itself)
will, unless the Purchaser 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).
(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 5.4;
(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 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
-25-
<PAGE>
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, 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 reasonably 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 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, provided,
-26-
<PAGE>
however, that, subject to Section 6.5, 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.
Section 8.5. Servicer Indemnities. CFC shall indemnify, defend and
hold harmless the Administrative Agent and the Purchaser, and each of their
respective officers, directors, employees and agents from and against any
loss, liability or expense arising from the use, ownership or operation by
CFC or any of its Affiliates of a Financed Vehicle or CFC's willful
misfeasance or negligence in the performance of its duties under this
Agreement (as Servicer or otherwise).
ARTICLE IX
ADMINISTRATIVE AGENT
Section 9.1. Appointment of Administrative Agent. The Purchaser has
appointed ABN AMRO Bank N.V. as its Administrative Agent. The Administrative
Agent is responsible for administering and enforcing this Agreement
(including holding all Investment) for the benefit of the Purchaser 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, remove a Administrative Agent and appoint a
new Administrative Agent, which shall have the duties described in Section
9.1.
-27-
<PAGE>
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 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
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 Purchaser. The
Purchaser may assign any of its rights or obligations hereunder to any
Person; provided that in the case of any such assignment other than pursuant
to a Liquidity Facility or Credit Facility 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
-28-
<PAGE>
paid in full; provided, however, that the rights and remedies of the
Purchaser under Section 8.5 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.
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 (through the Administrative Agent) 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
Administrative Agent, for the benefit of the Purchaser, a continuing security
interest in the Purchased Receivables and the Related Security and
Collections related thereto to secure the obligations of the Seller to the
Purchaser hereunder.
Section 10.7. Agreement Not To Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness
for borrowed money of the Purchaser, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause
the Purchaser to invoke, any process for the purpose of (a) commencing or
sustaining a case against the Purchaser under any federal or state
bankruptcy, insolvency or similar law (including the Federal Bankruptcy
Code), (b) appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official for the Purchaser, or any substantial
part of its property, or (c) ordering the winding up or liquidation of the
affairs of the Purchaser.
Section 10.8. Excess Funds. The Purchaser shall be required to make
payment of the amounts required to be paid pursuant to this Agreement only if
the Purchaser has Excess Funds (as defined below). In the event that the
Purchaser does not have Excess Funds, the excess of the amount due hereunder
over the amount paid shall not constitute a "claim" (as defined in Section
101(5) of the Federal Bankruptcy Code) against the Purchaser until such time
as the Purchaser has Excess Funds. If the Purchaser does not have sufficient
Excess Funds to make any payment due hereunder, then the Purchaser may pay a
lesser amount and make additional payments which in the aggregate equal the
amount of deficiency as soon as possible thereafter. The term "Excess
-29-
<PAGE>
Funds" shall mean the excess of (a) the aggregate projected value of the
Purchaser's assets and other property (including cash and cash equivalents),
over (b) the sum of (i) the sum of all scheduled payments of principal,
interest and any other scheduled amounts payable on publicly or privately
placed indebtedness of Windmill for borrowed money, plus (ii) the sum of all
other liabilities, indebtedness and other obligations of the Purchaser for
borrowed money or owed to any credit or liquidity provider, together with all
unpaid interest then accrued thereon, plus (iii) all taxes payable by the
Purchaser to the Internal Revenue Service, plus (iv) all other indebtedness,
liabilities and obligations of the Purchaser then due and payable; provided,
however, that the amount of any liability, indebtedness or obligation of the
Purchaser shall not exceed the projected value of the assets to which
recourse for such liability, indebtedness or obligation is limited; provided
further, however, that the Excess Funds determination will be made once each
Business Day.
Section 10.9. 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 advance 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 10.10. 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.
-30-
<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: 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: 248-948-3138
CHRYSLER FINANCIAL CORPORATION
as Servicer
By: David H. Olsen
Title: Assistant Treasurer
Address: 27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
Facsimile: 248-948-3138
WINDMILL FUNDING CORPORATION,
as Purchaser
By: Richard L. Taiano
Address: c/o Lord Securities
Corporation
Two Wall Street
New York, New York 10005
Attention: President
-31-
<PAGE>
Telephone: (212) 346-9000
Facsimile: (212) 346-9012
ABN AMRO BANK N.V.,
as Administrative Agent
By: Robert J. Graff
Title: Group Vice President and
Director
By: Jon R. Bottorff
Title: Group Vice President
Address: Structured Finance,
Asset Securitization
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention: Windmill
Telephone: (312) 904-6263
Facsimile: (312) 904-6376
-32-
<PAGE>
EXHIBIT A
FORM OF SERVICER REPORT
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL
</TABLE>
Exhibit 12-A
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
(dollars in millions)
Year Ended December 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net earnings before cumulative
effect of changes in
accounting principles $ 419 $ 376 $ 339 $ 195 $ 159
Add back:
Taxes on income 218 210 183 120 108
Fixed charges 832 813 927 772 810
------ ------ ------ ------ ------
Earnings available for fixed
charges $1,469 $1,399 $1,449 $1,087 $1,077
====== ====== ====== ====== ======
Fixed charges:
Interest expense $ 816 $ 797 $ 910 $ 754 $ 791
Rent 16 16 17 18 19
------ ------ ------ ------ ------
Total fixed charges $ 832 $ 813 $ 927 $ 772 $ 810
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 1.77 1.72 1.56 1.41 1.33
====== ====== ====== ====== ======
</TABLE>
The ratio of earnings to fixed charges is computed by dividing earnings
available for fixed charges by total 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).
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
Exhibit 12-B
<TABLE>
<CAPTION>
Chrysler Corporation and Consolidated Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
(dollars in millions)
Year Ended December 31,
--------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net earnings before extraordinary
item $2,805 $3,720 $2,121 $3,713 $2,415
Add back:
Taxes on income 1,752 2,372 1,328 2,117 1,423
Fixed charges 1,379 1,339 1,359 1,267 1,433
Amortization of previously capitalized
interest 114 111 103 87 94
Deduct:
Capitalized interest 194 156 204 177 176
Undistributed earnings from less
than fifty percent owned affiliates -- 14 18 15 2
------ ------ ----- ------ ------
Earnings available for fixed
charges $5,856 $7,372 $4,689 $6,992 $5,187
====== ====== ====== ====== ======
Fixed charges:
Interest expense $1,006 $1,007 $ 995 $ 937 $1,104
Capitalized interest 194 156 204 177 176
Credit line commitment fees 8 15 10 10 10
Interest portion of rent expense 171 161 150 143 143
------ ------ ------ ------ ------
Total fixed charges $1,379 $1,339 $1,359 $1,267 $1,433
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 4.25 5.51 3.45 5.52 3.62
====== ====== ====== ====== ======
Preferred stock dividend
requirements 1 5 33 125 127
====== ====== ====== ====== ======
Ratio of earnings to fixed charges
and preferred stock dividend
requirements 4.24 5.49 3.37 5.02 3.33
====== ====== ====== ====== ======
</TABLE>
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.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
[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, 33-55789 and 333-31093 of Chrysler Financial Corporation
(a subsidiary of Chrysler Corporation) on Form S-3 of our report dated
January 22, 1998 appearing in this Annual Report on Form 10-K of Chrysler
Financial Corporation for the year ended December 31, 1997.
s/ Deloitte & Touche L.L.P.
January 22, 1998
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
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, 1997, 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 22nd day of January, 1998.
/s/ T. P. Capo /s/ D. L. Davis
- --------------------------- -----------------------------
T. P. Capo D. L. Davis
/s/ R. L. Franson /s/ W. J. O'Brien III
- --------------------------- -----------------------------
R. L. Franson W. J. O'Brien, III
/s/ G. C. Valade
---------------------------
G. C. Valade
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM CHRYSLER FINANCIAL CORPORATION AND
SUBSIDIARIES FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> $ 380
<SECURITIES> 408
<RECEIVABLES> 14,037
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,321
<CURRENT-LIABILITIES> 0
<BONDS> 12,718
0
0
<COMMON> 25
<OTHER-SE> 3,279
<TOTAL-LIABILITY-AND-EQUITY> 19,321
<SALES> 0
<TOTAL-REVENUES> 2,654
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 758
<LOSS-PROVISION> 443
<INTEREST-EXPENSE> 816
<INCOME-PRETAX> 637
<INCOME-TAX> 218
<INCOME-CONTINUING> 419
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 419
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
